RIYADH, 29 March 2005 — Wage freeze, coupled with the rise in oil prices and concerns over Saudization, has created a situation in which non-resident Indians have emerged as the biggest losers among expatriates living in the Kingdom.
A cross-section of expatriates contacted by Arab News revealed that while the inflationary pressure has shaved off around ten percent of their annual income, the impact has been minimal in the case of other Asian expatriates.
The Philippine peso may have strengthened a little against the dollar, but this is hardly felt by the Filipino consumer. This is probably due to the lack of government action or efforts to monitor the prices of basic goods,” Joselito Dumalo, a Filipino expatriate told Arab News.
Sirajul Islam, a Bangladeshi national, said the taka had depreciated against the Saudi riyal during the last six months. “This has benefited the Bangladeshi expatriates. Till recently the exchange rate was 15.38 taka per riyal. Within six months the taka has depreciated against the Saudi riyal to stand at the current rate of 15.87.”
Similar view was expressed by Sheikh Abdul Haque, technical support engineer, who said the value of the Pakistani rupee has remained more or less stable at 15.50-15.60 to riyal.
According to Mohammed Farhan, a Sri Lankan expatriate, the Sri Lankan rupee appreciated against Saudi riyal only for two months during the tsunami disaster, when there was a heavy inflow of dollar remittances into the island republic. Since then, it has stabilized at Rs. 26.30 against Saudi riyal.
Providing an overview of the situation facing NRIs, Raju George, an executive with a major Saudi bank, said Indians have lost 9.22 percent on average during the last two years due to the appreciation of the rupee against the dollar. “In effect, this works out to a loss of more than a month’s salary annually,” he observed.
Speaking on behalf of Indian Airlines, Mohammed Quaiser, sales and marketing manager, told Arab News that the situation has been further compounded by the escalating oil prices of over $54 a barrel resulting in the imposition of fuel surcharge at the rate of SR21 for tickets issued from the Kingdom for both domestic and international sectors.
Together with concerns over the ongoing campaign for Saudization of jobs in different sectors, including the travel industry, expatriate families have greatly reduced their travel frequency. “Instead of going once every two years, they are now flying home once in three to five years. The situation is really bad, since those who used to take their vacation in Western countries have also dropped their travel plans due to the visa hassle,” Quaiser said.
Another inhibiting factor is the hike in child fare, which is now priced at 75 percent of the adult fare as against 67 percent in the past. “Since an average Indian family consists of four children or more, they have to pay a lot more than before. And if you add the fuel surcharge and insurance surcharge, it makes a big hole into their pocket given the fact that only employees are entitled to air ticket from their organizations.”
He pointed out that the arrival of the budget airlines has further hit mainstream air carriers from the subcontinent and the Gulf states. Ironically, budget air fares for Western destinations are lower than those for the Gulf sector, except Saudi Arabia. “There is a notion among the operators of budget airlines that NRIs in the Kingdom are well off and, therefore, don’t require cheap travel facility unlike their counterparts in other Gulf states.”
As for the impact of Saudization on the airlines and travel agencies, travel agents refer to the circular issued by the Supreme Commission for Tourism mandating a training program for Saudis. To this end, the airlines and travel agencies will contribute 50 percent of the employee’s stipend, with the rest coming from the Human Resources Development Fund. “If we can manage to survive in such an environment, we would feel grateful,” the representative of a travel agency said.