Long before the rest of the world was drawn to the Gulf by the bright lights and glitz of Dubai, Indians saw it — and the rest of the Gulf region — as a place to make it big. With nearly 5.5 million NRIs living in the Middle East, they outnumber the combined Indian populations of the U.S. (2.2 million) and the U.K. (1.5 million). The emirates have already produced a number of Indian success stories, and even the average non-resident Indian (NRI) can earn more money and have a better quality of life than back home.

Local economies are also reaping the rewards of these Middle Eastern forays. Gulf expats — largely from the working and middle classes — sent some US$27.5 billion of remittances back home to their families this past year alone, according to the Reserve Bank of India. And as Sanjay Verma, Consul General of India to Dubai and the Northern Emirates, pointed out in a statement to local press during Indian Independence Day celebrations in August, it’s not just India that has benefited. "Indian entrepreneurs marched in step from the very beginning with the people of the Middle East, forging symbiotic links, which have benefitted both India and this region," he said.

But this critical flow of capital has been interrupted by the economic downturn — the wages of many NRIs are being slashed, the cost of living is increasing and personal investments are shrinking. The change in fortune has left the Indian government accused of not doing enough to provide financial safety nets for these NRIs and many Indians in the region are wondering whether the disadvantages of being an expat in the Gulf — like being separated from family and friends back at home and not enjoying the same rights as local national –now outweigh the advantages.

There once was a time when NRIs arriving in the Gulf "made money and totally changed their lifestyles," says K.V. Shamsudheen, chairman of the Sharjah-based Pravasi Bandhu Welfare Trust, which provides financial advice to middle-class Indians. "Today, it is a very different experience. Things are so expensive now…. People are asking, ‘What is the use of being here?’"

No Longer Affordable

That is indeed a question being asked by many NRIs raising their children in the Gulf. For them, one of the toughest downturn-related changes has been escalating school fees. Typically, NRI families send their children to private, Indian-run schools, which cost considerably less than the schools catering to Western expatriates. (Wage discrimination also plays a role here — a Western expat typically earns three times more than a counterpart from South Asia.)

When authorities in the United Arab Emirates (UAE) allowed private Indian schools in Dubai to raise fees by 20% this May, they were met with howls of protests by parents who, however, have had little choice but to pay up since demand for school places far exceeds supply. A case in point: This past semester, Abu Dhabi’s Our Own English High School had more than 3,500 children on its waiting list for 180 spaces. NRIs, then, have two choices — fork out for the higher fees or pack up their children and send them back home while one or both parents stay behind to continue working.

Other families — as well as individual NRIs — have other reasons for packing up altogether. The Indian government estimated that last year, 150,000 Indians in the Gulf returned home after losing their jobs. Others, meanwhile, have tumbled deep into debt. A report published in August by Dubai-based consultancy International Swiss Debt Management said Indian residents had the highest debt levels among all expats in the region. Some of those in debt include more than 1,000 Indians, who are in jail in the UAE because of bounced checks or defaulted loans.

The Indian government has made some attempts to alleviate some of these problems. For example, the Dubai consulate has been providing financial management training for NRIs. And heeding pressure from parents, the Indian embassy appealed to Abu Dhabi for more low-cost Indian schools in March, which was followed by a member of Abu Dhabi’s ruling family donating a new Indian primary school in the capital, which opened this semester and provided for 1,000 additional placements.

Financial hardships aren’t new for the Gulf’s NRIs, however. Laborers, as they are commonly referred to, make up the bulk of Indian expats in the region, but they traditionally haven’t had much of a legal voice or human-rights support because of their low economic status. Nonetheless, "Indians in the Middle East … are totally dependent on the help and guidance of the Indian government due to the political environment of the region," asserts K. Sital, a Hong Kong-based industrialist and publisher of several books on expat Indians around the world.

That’s been made clear with an ongoing case in the UAE involving 17 Indian laborers, who are facing the death penalty for the alleged murder of a Pakistani man. A lightening rod for increasingly angry NRIs, the case has drawn international criticism, and Indian news coverage has used it to raise awareness about the difficulties of NRI laborers in the Gulf.

Outrage over the case has led to calls for the Indian government to intervene, which is legally thorny for it to do. In July, after months of speculation about the fate of the men, the Indian ambassador said a deal was being worked out with the UAE to allow Indian prisoners in the UAE to serve jail terms at home. While it does not directly address the plight of the 17 men, human rights and welfare groups said it was a positive step.

But it seems there are limits to the Indian government’s willingness to get involved in NRI issues. "I think the Indian government is happy with [the laborers’] remittances and does not believe they can contribute much [else]," says Rafiq Dossani, director of the Center for South Asia at Stanford University.

Feeling Left Out

The changing mood among NRIs was palpable at January’s Pravasi Bharatiya Divas (PBD), the eighth annual event held by the Ministry of Overseas Indian Affairs in New Delhi to bring together government officials and entrepreneurs of Indian origin from around the world to discuss business and economic issues of the day. While the Indians representing the Gulf are running companies that employ millions of Indians, "the larger component in the Middle East are the non-professionals, who’ve been insignificant in the context of the glamorous [Divas gathering]," Dossani says. "The original purpose of the PBD was to showcase India through successful NRIs, who wanted to give back to their country of birth. But Indians in India are doing much better than NRIs, who have been caught in [the downturn]."

The event in the past has sown the seeds for positive change for NRIs generally. At a previous PBD in Chennai, for example, Prime Minister Manmohan Singh announced that laws were being amended to protect blue-collar NRI workers from paying exorbitant fees to employment agents in order to get jobs. Recruiters are currently able to charge a worker as much as the equivalent of one month’s wages for their service. The official ceiling for agents’ fees is now US$59, but some unlicensed agents charge more than US$2,000. At this year’s PBD, the prime minister pledged that NRIs in the Gulf would be allowed for the first time to vote absentee in India’s elections. "I recognize the legitimate desire of Indians living abroad to exercise their franchise and to have a say in who governs India," Singh said in his address at the event. The bill was passed in August.

One of this year’s PBD attendees, Ajay Shrikhande, CEO of Dubai-based Brandcom Middle East, a creative and brand agency, questioned the benefit of the event for Gulf NRIs. But Shamsudheen says that by being able to vote in elections back at home, Indians in the Gulf will feel more empowered to push for changes to their working conditions and the general socioeconomic environment abroad. "Political parties have started talking about NRI issues," he says. "Earlier, they never turned to us. After this bill, they have started to take an interest….There is no chance to stay here [in the Gulf] forever, so we have been very keen about [getting] our voting rights."

India’s government has made progress elsewhere. For example, the Indian embassy in Abu Dhabi, in collaboration with the UAE’s Ministry of Labor and the Protector of Emigrants in India, plans to roll out an online depository of the originals of employment contracts, which can be used in case there is a dispute between an employee and employer. According to M.K. Lokesh, the Indian ambassador to the UAE, "this will not only prevent duping workers with false promises, but also help us develop a database on the performance of the companies recruiting workers from India."