“Things are very fine.”
By Rakesh Upadhyay and cross-posted from WOLF STREET
The Kingdom is struggling with weak GDP growth, higher fees and taxes, and an economy that is unable to pay the dues to its workers, leaving thousands of workers from South Asia with an uncertain future.
When a nation is unable to provide food to its migrant workers, it says a lot about their financial condition.
The oil price crash has forced the oil-rich Kingdom to introduce austerity measures, and delay payments to already cash-strapped contractors.
“It looks like austerity has hit hard and more than we had anticipated, halting construction projects and stopping hiring,” said Jason Tuvey, Middle East economist at Capital Economics, reports the Financial Times.
During the financial crisis in 2009, the government paid companies to help them tide over the cash crunch, however, this time, the finance ministry has cut advance payments from 20% to 5%.
“Money is not being paid at the top level,” said one banker to the industry. “This has been going on since October, and it is hard to know how long it will go on for,” reported Reuters back in February.
The stranded Indian and Pakistani workers are evidence that things aren’t any better now than they were in February…
Continue reading the article at WOLF STREET