Saudi Arabia: Bangladeshi labor becomes less “docileâ€

The Economist writes: “Bangladesh and Saudi Arabia: Revenge of the migrants’ employer?“

The data is what it is. And the story of Saudi reax against WCT may well be true. But it’s not the only possible story. And I am not even sure it’s the right story.

1. The peak was in 2007, and the big fall had taken place by 2009. if i recall correctly, no one was talking about hanging anyone in 2009. WCT started in 2010. formal trials started in 2011. in 2009, AL was busy hanging the august 75 killers, not jamaatis. and well into 2011, jamaatis were quietly confident that they would survive a trial (and they would have easily beaten the loopholes had the trial been fair — so the confidence was well warranted). given all that, i am not sure that WCT is the reason behind the saudi slump.

2. So, what’s the alternative story? well, take pakistan out and we can tell a pretty simple story — saudi demand peaked during the boom years when oil price was sky high, it collapsed with the financial crisis, and hasn’t rebounded. of course, this is not a full story given demand for pakistani labour continues to be strong. but then again, perhaps it’s the pakistani series that needs explaining? what’s happening to saudi demand for labour overall?

3. Are pakistanis and bangladeshis substitutes in saudi market? look at the numbers carefully again. there are 1.5m pakistanis in saudi, and 2.5m deshis. and yet, both countries received $3.7b in remittance. all these numbers are from the article. simple arithmetic tells you that the average pakistani sends more than the average bangladeshi. that would suggest that the average pakistani might earn more than average bangladeshi. are they substitutes? not clear at all.

4. Why are there about 1m more deshis than pakis in saudi? pak got into the labour market game before BD (remember saudis didn’t like secular mujib yadda yadda….). jeddah is much closer to karachi than chittagong, and they share the same script, unlike us. saudi has had lot stronger security/defence ties with pak than BD. so how come there are more deshis?

5. Here is an alternative theory. BD labour used to be fairly cheap and docile in earlier decades. but over the past decade, it has become more vocal, partly because their numbers have risen, and partly because their opportunities have become brighter elsewhere. saudi employers don’t like the concentration of 2.5m bengali muslims (1.5m pakistanis are presumably not homogenous, ditto for the indians), who are increasingly becoming ‘troublesome’. steam was building up for a while, and the 2008 crisis acted as a catalyst. now they want to diversify their labour input. hence the observed outcome.

is my story correct? i have no idea. but it fits the data point just as well as (if not better than) the WCT story.