Kuwait Community

7 August 2023

Part 2: From Centuries Ago to Present and Beyond: Indians’ Contribution to Kuwait’s Journey of Prosperity

By Dev Shah

Since the oil discovery in Kuwait on February 22nd, 1938, in the Burgan field, the country experienced dramatic transformations. With nearly one-tenth of the world’s proven oil reserves, they are not going to disappear anytime soon as they can sustain the current production levels for almost 150 years. This two-of-three-part blog series looks into the early discovery of oil and its impact on the Kuwaiti economy and the contributions of Indian migrant workers. As discussed in the previous blog, the Kuwaiti and other Arab Gulf States’ migration policies favoured migrants from British India since they were skilled and semi-skilled workers.

The Oil Concession Agreement was signed on December 23rd, 1934, by then-ruler Sheikh Ahmad Al-Jaber Al-Sabah to increase Kuwait’s wealth and importance on the global stage. While drilling happened in other parts of the Arab Gulf States, the focus shifted to Burgan based on the recommendations of a report and geological surveys were conducted, and in early 1938, oil was discovered. One can imagine the depth and quantity available in Kuwait’s oil reservoirs since the first well – ‘Burgan No. 1’ that continues to produce oil to date. It is important to note that the first Oil Concession Agreement was awarded to Kuwait Oil Company Limited, which was formed by Gulf Oil Corporation (presently Chevron Oil) and the Anglo – Persian Oil Company (presently British Petroleum). However, in 1975, the State of Kuwait signed an agreement to give the Kuwait Oil Company complete control of its oil resources in line with the other Arab oil-producing countries. Some Kuwaiti officials have suggested that the agreement to become a nationalized oil company may bring as much as $500 million more yearly revenues.

Since then, life in Kuwait has significantly improved and was often referred to as its golden era due to its ability to meet the ever-increasing demand for oil. To meet the world’s demand, there was an ever-increasing demand for labour that came in the form of migrant workers. It is known that two-thirds of the labour force is imported into Kuwait along with its other Arab Gulf States – Qatar, Bahrain, Oman, and the United Arab Emirates. In 1975, a demographic breakdown revealed that 52.6% of the total population – 995,000 were migrants in Kuwait, whereas 70.8% of migrants were a part of the total labour force. Data reveals that as many as 32,105 Indian nationals were in Kuwait, out of which 21,475 were a part of the labour force in 1975. With data from the Indian Ministry of External Affairs, the Indian population grew to 65,000 in 1979 and earned US$ 3.2 billion in remittances from migrants. However, no official figures are available on the magnitude of the remittances from Kuwait or the Middle East region. It is important to note that migrants serve as an important source of income for India through remittances while they help build the Kuwaiti economy.

The migration policies becoming simpler due to the need for labour and India’s struggle to establish itself after independence from the British went hand in hand with other challenges in India. India had military tensions on either side of its border, and the migrant workers from India were willing to accept poorly remunerated low-skilled jobs available in Kuwait. One of the salient reasons why Gulf countries were interested in South Asian migrant workers was that they did not demand political rights, and neither did they interfere in the cultural spheres of the country, which was significant for the ruling employers and elites to establish their power and authority. The migrant workers from India came from the states of Kerala, Karnataka, Goa, Maharashtra, and Gujarat. A similarity between all these states is that they are on the west coast of India and were also the primary traders with Kuwait before the oil discovery. There are two major public sector Indian firms that play an important role in the Middle East, the Engineering Projects India, Limited and the National Building Construction Corporation that the Government of India allows to pay a more competitive wage to compete against the British and the American firms. The Indian companies import construction supplies, whereas the workforce imports goods such as food, saris (traditional Indian woman’s clothing), and films. The Indian migrant workers find the Gulf financially attractive due to the opportunity to save money even after the high cost of living. A part of the reason can also be attributed to the falling Indian Rupee then and now, which once was a legal tender in Kuwait. The housing for migrant workers, mainly in the construction industry, was of barrack style, which was sometimes provided rent-free or at low rates and medical care was also taken care of by the employers. Food was also provided in canteens, and there were enough low-cost Indian restaurants that the workers could treat themselves. As mentioned above, the cultural lifestyle of Kuwait provides very few opportunities for these workers to spend money elsewhere, such as bars and gambling.

In conclusion, the expansion of oil from other Arab Gulf States to Kuwait not only ensured that the Indian community found a way to earn a better living for their families back in India but enabled the Kuwaiti economy to expand and diversify itself to mark its presence on the global stage. The Indian government also found stability to account for its brain ‘overflow’ rather than what other countries call brain ‘drain’ (the outflow of skilled and educated labour) due to mass emigration.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Canada Kuwait Aid Network.”

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