Concerns of terror backlash cloud over remittance economy

Concerns of terror backlash cloud over remittance economy
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First Published: Fri, Jul 13 2007. 02 07 AM IST
Updated: Fri, Jul 13 2007. 02 07 AM IST
New Delhi: The foiled terrorist attacks in Britain last month have prompted anxiety and soul searching in India, a country whose economy relies heavily on its citizens’ ability to work overseas.
Some of those arrested in connection with the thwarted bombings in London and Glasgow are Muslims from India. This is the first time since 1985, when a bomb downed Air India Flight 182 near the coast of Ireland, that Indian citizens have been implicated in a major international terrorist incident.
The revelations have prompted fears that Indian professionals, Muslim or otherwise, will face increasing difficulty finding employment overseas. Concerns that relatives already working abroad will face a backlash have also been heightened.
Some Indians remember that the first hate crime victim in the US after the 11 September 2001, terrorist attacks was Balbir Singh Sodhi, a Sikh gas station owner in Arizona shot to death by a man who apparently saw Sodhi’s turban as a symbol of terrorism and anti-American hatred.
A pledge by Prime Minister Gordon Brown of Britain to review policies for screening foreign doctors was met with a plea from Prime Minister Manmohan Singh of India not to single out citizens of any country for scrutiny. “A terrorist is a terrorist and has no religion or community,” Singh said he told Brown.
India relies perhaps more heavily than any other emerging economic power on remittances from its expatriate workers abroad. The perception of excellence enjoyed by its expatriate professionals is a source of pride at home.
Kafeel Ahmed, an Indian engineer who the police say drove a flaming Jeep Cherokee into the Glasgow airport terminal, is a main suspect in the British car bomb plot. His brother Sabeel, a doctor, has also been arrested in Britain. Their cousin Mohammed Haneef, a doctor from India, is being held in Australia, and five other Indian doctors have been questioned and released in Australia as part of the investigation.
Any curtailment on Indian nationals travelling abroad for work could have a significant effect at home, economists say. Indian expatriates send home more money than do expatriates from other countries, the World Bank said. The remittances were estimated at $25 billion (Rs1.01 trillion) in 2006, accounting for about 3% of India’s gross domestic product. There are about 25 to 30 million Indian citizens and people of Indian origin living abroad, according to Indian expatriate groups.
Money sent back from overseas “provides a huge amount of support to the currency and to the deficit,” Abheek Barua, chief economist of HDFC Bank, said. “In the absence of remittances, the dynamic of the exchange rate would be very different.”
Indian professionals have helped to plump up the stock and real estate markets in India by sending cash home to relatives and investing themselves. The Reserve Bank of India estimated last year that money from remittances accounted for about 12% of the growth in the booming Indian real estate market.
There is no suggestion from politicians or policymakers in the US that the foiled attacks in Britain would affect the ability of Indians to travel there. But Indian professionals working in the US under professional H-1B visas are already facing long delays converting these visas to residential green cards.
Some economists and analysts say that any concern about the ability of Indians to work overseas is overblown. The reliance of many industries across the world on Indian professionals would make wholesale discrimination against them difficult to achieve.
Up to 40% of doctors in the British National Health Service are of foreign origin, a majority of whom have originated from India or Pakistan.
R. Vaidyanathan, a professor of finance at the Indian Institute of Management in Bangalore, who has studied the Indian reliance on remittances, said Britain “requires these doctors more than these doctors require” Britain.
Hari Kumar contributed to this story.
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First Published: Fri, Jul 13 2007. 02 07 AM IST