Never knew this. It seems like India makes a lot of money from remittances from Indian workers. 25% of Kerala's economy depends on remittances from Indian workers working overseas.
India received $52 billion of remittances last year as comparison China got $49B. The difference is even more staggering if you factor in fact that China's economy is 3 times the size of India's and its population is much larger.
Even if Dubai can get money from Abu Dhabi, it will not longer be the same. Lots of Indian workers are on a one way trip back home.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahCvOB1o_Piw&pos=5
India Studying Effect of Dubai’s Debt Delay Plan on Its Economy
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Anil Varma and Cherian Thomas
Nov. 28 (Bloomberg) -- India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao said.
About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005.
Dubai World, the emirate’s investment company, roiled markets as it sought a “standstill” agreement to delay repayment on much of its $59 billion of debt. Dubai suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG. Most Indian migrant workers are employed in the Gulf’s construction industry, according to the government.
“It’s quite likely that Dubai will face a severe downturn in the real estate and financial sectors and that will affect remittances and jobs,” Issac said in an interview at his office in Thiruvananthapuram yesterday.
Remittances from the Middle East account for about 25 percent of Kerala’s economy, Issac said. India received $52 billion of remittances last year, according to the World Bank, making it the world’s largest recipient of money from migrant workers. China got $49 billion.
‘Excesses’
“We’re bound to see a rise in risk aversion,” Arnab Das, the London-based head of market research and strategy at Roubini Global Economics said in an interview. “The Dubai situation signifies that although the major central banks around the world have stabilized the financial system, they can’t make all the excesses simply disappear.”
India’s stocks, currency and bonds fell on concern investors may shy away from riskier emerging market assets over losses stemming from the turmoil in Dubai. India’s benchmark stock index dropped 1.3 percent yesterday, while the rupee lost 0.5 percent.
Larsen & Toubro Ltd., India’s biggest engineering company, has receivables of as much as $25 million from three companies in Dubai, Executive Vice President R. Shankar Raman said in a telephone interview. DLF Ltd., India’s biggest property company, software-services providers Wipro Ltd. and Infosys Technologies Ltd. said the crisis in Dubai won’t affect them.
Emaar MGF Land Ltd., the Indian joint venture of Emaar Properties PJSC, said the Dubai crisis has no impact on its local operations and its funding plans for property development in India are on track.
“We must measure the extent of the problem there and how it might impact India,” India’s central bank Governor Subbarao said in Hyderabad, India, today. “On Dubai alone, I want to say, that we should not react to instant news like this.”
Dubai is one of seven sheikhdoms in the U.A.E. The Gulf state had borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub.
India received $52 billion of remittances last year as comparison China got $49B. The difference is even more staggering if you factor in fact that China's economy is 3 times the size of India's and its population is much larger.
Even if Dubai can get money from Abu Dhabi, it will not longer be the same. Lots of Indian workers are on a one way trip back home.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahCvOB1o_Piw&pos=5
India Studying Effect of Dubai’s Debt Delay Plan on Its Economy
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Anil Varma and Cherian Thomas
Nov. 28 (Bloomberg) -- India, the world’s top recipient of migrant remittances, is examining the effect Dubai’s attempt to delay debt repayments may have on Asia’s third-largest economy, central bank Governor Duvvuri Subbarao said.
About 4.5 million Indians live and work in the Gulf region and remit more than $10 billion annually, according to government data. The turmoil may affect remittances, said Thomas Issac, finance minister of the southern state of Kerala, which accounted for about a quarter India’s migrant labor in 2005.
Dubai World, the emirate’s investment company, roiled markets as it sought a “standstill” agreement to delay repayment on much of its $59 billion of debt. Dubai suffered the world’s steepest property slump in the global recession, with home prices dropping 50 percent from their 2008 peak, according to Deutsche Bank AG. Most Indian migrant workers are employed in the Gulf’s construction industry, according to the government.
“It’s quite likely that Dubai will face a severe downturn in the real estate and financial sectors and that will affect remittances and jobs,” Issac said in an interview at his office in Thiruvananthapuram yesterday.
Remittances from the Middle East account for about 25 percent of Kerala’s economy, Issac said. India received $52 billion of remittances last year, according to the World Bank, making it the world’s largest recipient of money from migrant workers. China got $49 billion.
‘Excesses’
“We’re bound to see a rise in risk aversion,” Arnab Das, the London-based head of market research and strategy at Roubini Global Economics said in an interview. “The Dubai situation signifies that although the major central banks around the world have stabilized the financial system, they can’t make all the excesses simply disappear.”
India’s stocks, currency and bonds fell on concern investors may shy away from riskier emerging market assets over losses stemming from the turmoil in Dubai. India’s benchmark stock index dropped 1.3 percent yesterday, while the rupee lost 0.5 percent.
Larsen & Toubro Ltd., India’s biggest engineering company, has receivables of as much as $25 million from three companies in Dubai, Executive Vice President R. Shankar Raman said in a telephone interview. DLF Ltd., India’s biggest property company, software-services providers Wipro Ltd. and Infosys Technologies Ltd. said the crisis in Dubai won’t affect them.
Emaar MGF Land Ltd., the Indian joint venture of Emaar Properties PJSC, said the Dubai crisis has no impact on its local operations and its funding plans for property development in India are on track.
“We must measure the extent of the problem there and how it might impact India,” India’s central bank Governor Subbarao said in Hyderabad, India, today. “On Dubai alone, I want to say, that we should not react to instant news like this.”
Dubai is one of seven sheikhdoms in the U.A.E. The Gulf state had borrowed $80 billion in a four-year construction boom to transform its economy into a regional tourism and financial hub.
