Big slump in Saudi labour market: worker departures down 45 percent in a year, Saudi Arabia accounts for 95 percent of total shortfall

Recruitment falling in Saudi Arabia, the biggest destination for Bangladesh’s overseas employment, has put fresh pressure on the manpower export sector. The ongoing Middle East conflict, security crisis and disruption to air travel have slowed worker departures abroad, compounded by Bangladesh’s overdependence on the Saudi labour market. Concern is growing over remittance flows, foreign currency reserves and continuity of employment in the long term.

According to the Bureau of Manpower, Employment and Training (BMET), 590,188 workers went abroad from Bangladesh between January 1 and October 17 this year. In the same period last year the number was 864,735. In other words, worker departures abroad have fallen by 31.8 percent in a year.

The blow is biggest in Saudi Arabia itself. By BMET’s count, 315,935 Bangladeshi workers went to the country up to October 17 this year. In the same period last year the number was 577,010. Worker departures to Saudi Arabia have therefore fallen by 45.2 percent.

The total shortfall in worker departures abroad this year compared with last year is 274,547. Of that, Saudi Arabia alone accounts for 261,075 fewer workers. In other words, about 95 percent of the total shortfall is linked to reduced recruitment in the Saudi labour market. The picture shows how a change in recruitment conditions in one particular country can heavily affect the country’s overall overseas employment.

State minister for foreign affairs Shama Obaid Islam has said more than 3 million Bangladeshis live and work in Saudi Arabia. With so many Bangladeshis working there, she said, the impact of a regional crisis is natural. The government is trying to find alternative labour markets to deal with long-term pressure.

The conflict is also affecting employment and wages. The ongoing Middle East security situation, including the conflict between Yemen’s Houthis and Saudi Arabia, is increasing labour market uncertainty. If the conflict is prolonged, investment in construction, infrastructure, transport and other sectors may slow. That could reduce demand for new recruitment while also putting pressure on the jobs and incomes of workers already employed.

Mohammad Jalal Uddin Sikder, associate professor at North South University, believes expatriates may send their saved money home amid war uncertainty. That may raise remittance temporarily, but if the conflict lasts, the flow risks falling after a few months.

Khandaker Golam, president of the Knowledge Hub Institute Trust, has also warned that a long conflict could disrupt economic activity and investment projects in the Middle East. If capital expenditure falls in countries such as Saudi Arabia and the United Arab Emirates, demand for new workers will fall. At the same time, the risk of layoffs among existing workers may rise.

Flight disruption is adding to the suffering of would-be migrants. According to the flight management department of Hazrat Shahjalal International Airport, restrictions on operations at Saudi airports disrupted 141 direct and transit flights from Dhaka between October 10 and 23. A total of 21,933 passengers were stranded. State minister for expatriates’ welfare and overseas employment Nurul Haque has said the government is active in bilateral talks to ensure visa extensions for stranded workers.

Although worker departures abroad have fallen, remittance flows have so far shown positive growth. In the first quarter of the current fiscal year, July to September, $8.59 billion in remittance arrived in the country. In the same period of the previous fiscal year it was $7.59 billion, a growth of 13.3 percent. Of that, $1.65 billion came from Saudi Arabia, 19.2 percent of total remittance and about 34 percent more than the $1.23 billion of the same period a year earlier. But by Bangladesh Bank data, remittance fell from $2.97 billion in August to $2.77 billion in September, the lowest monthly inflow in 11 months.

Not all labour markets show the same trend, however. Up to October 17 this year, 62,647 Bangladeshi workers went to Singapore, more than the 56,591 of the same period last year. Departures to the United Arab Emirates also rose from 10,142 to 22,848. On the other hand, departures to Qatar fell from 86,171 to 52,060 and to Kuwait from 34,928 to 25,035.

In this situation, the material notes the need for skills-based training, direct contact with foreign employers, preparing workers according to demand in new labour markets, and effective steps to control migration costs. Ensuring job security, wages and legal protection for Bangladeshis working abroad is also important.