In order to address a developing problem that’s the direct result of the continued price woes of the oil market, Saudi Arabia is helping to fund the transportation costs so that anywhere from 5,000 to 10,000 unemployed workers from India will be able to return to their homeland.
While the workers encompass a wide range of industries, the funding mechanism for those sectors comes directly from the oil revenues the Saudis bring in each year. Over the past two years, that amount has been effectively sliced in half due to plunging oil prices.
The problem surfaced primarily due to the financial problems encountered by Saudi Oger, a construction firm. Unable to pay many of its workers due to a reduction in government funding, the Indian workers were having problems simply eating on a regular basis.
Aggravating the problem was the fact that those workers needed what’s known as a no-objection certificate in order to leave the country, which Saudi Oger hadn’t provided. That led to a meeting between Saudi officials and those from India on August 3.
The result was that the Saudis would offer free transportation back to India and that the workers would be able to file claims in order to receive money owed to them.
In an effort to keep enough funding available for many other of the country’s state-run industries, Saudi Arabia continues to sell oil at below the price preferred by OPEC. While the volume helps bring in revenue, the price drop has resulted in the sale of bonds, which is something that hasn’t taken place since 2007.
Still, one reason for the refusal to try and increase prices stems from the Kingdom’s feud with Iran. Just four months ago, the Saudis banned Iranian tankers from Saudi Arabian waters.