7 Diaspora and Investment

Anisur Rahman

Introduction

The term Diaspora has been derived from Greek words dia (through) and sperio (to scatter). Literal meaning of Diaspora is scattering or dispersal. Initially the term was used to describe the Jewish communities living in different parts of the World outside Israel. Of late, however, the purview of Diaspora has been broadened to refer to any population group settled abroad but maintaining close links with its home land. Thus, Diaspora can be defined as any ethnic minority community of migrant origins residing and acting in host countries but maintaining strong sentimental and material links with the countries of origin. More specifically, now the term is generally used to describe practically any population that is considered transnational. In the terms of Indian context, Diaspora refers to the people who migrated from territories that are currently within the borders of the Republic of India. It also refers to their descendants. The Indian Diaspora could be characterized into two categories such as NRIs (Non-Resident Indians) and PIOs (Persons of Indian Origin).

The modern Indian Diaspora is considered to be about 200 years old which is in fact, the creation of British colonialism. Demographically, the Indian Diaspora is the second largest in the world after the Chinese Diaspora. Currently, the total number of overseas Indians is more than five million, who are settled in more than 110 countries, including US, Canada, UK, European countries, Australia, West Asian Countries, Southeast and Far Eastern countries.

The genesis of Indian Diaspora is traced to the labour migration to different parts of the World for multiple reasons under various circumstances. There have various patterns of migration which lead to the formation of Indian diaspora. Historically, these patterns of emigration could be divided into broad five categories out of which Indenture, Kangani and Passage emigration could be identified as colonial phenomena. The spread of Indians and the formation of Diaspora communities is in fact the result of different waves of migration over hundreds of years under colonial regimes. The other two patterns of contemporary migrations or flows are post independence event. The highly skilled professionals, workers and students with higher educational qualifications began migrating to developed countries and the flow of unskilled and semi-skilled workers took place mostly to the Gulf countries. In order to understand these issue, let us have look on the phenomena briefly.

Indentured Labour Migration 

The migration of Indian indentured labour began in 1834, and was officially ended in 1920.The chief importing countries of Indian labour were the West Indian colonies, Fiji, South Africa, Mauritius, Malaysia and Ceylon (now Sri Lanka).Indian indentured labour also went to East Africa such as Kenya , Uganda, Tanzania, etc. The majority of emigrants were recruited from the ‘hill coolie’ district of Chota Nagpur division and the Bankura, Birbhum and Burdwan districts of Bengal Presidency. Bihar and Eastern Uttar Pradesh were the leading area in the North region. In South India, Trichinopoly, Madurai, Salem and Tanjore were the main recruiting districts. From West India, in Bombay Presidency, Ahmadnagar district was the main area of recruitment.

Overseas Indian migration began with export of indentured labour due to the abolition of slavery in the British Empire. Consequently, the labour was needed to work on the sugar plantation in various British colonies. Indenture was, in fact a contract by which the emigrant was bound to work for a given employer for a three to five year term, performing the task assigned to him for a specified wage. It was a bonded labour under contract to work for an employer for a specific amount of time to pay off his passage to a new country. In the 19th century hundreds of thousands of Indian and Chinese laborers went to work on plantations, in mines and in road and railway construction projects around the World. Finally they settled there as they were provided a piece of land. By the virtue of their sheer hard work, they established themselves and progressed in those colonies.

Today it is found that Indians have made all round progress in these countries. Everywhere Indian communities have become occupationally more diversified. They also have visible share of political power. In Mauritius where the Indians constitute about 70 per cent of the total population of the country, they have have been dominating for a long time. In the recent past in Guyana, Fiji and Trinidad and Tobago, there were governments headed by persons of Indian origin. This has all been made possible only due to their sincerity and hard work. They are now in a position not only to project India’s image but also to have partnership with India for its growth and development.

Kangani / Maistry System

The Kangani system of recruitment was used to supply South Indian labour to Malaysia and Sri Lanka and the maistry to Burma. The word Kangani is the anglicized form of the Tamil word Kankani meaning overseer and foreman. Under this system, a Kangani used to recruit the coolies in India paying them in advance for expenses. The maistry system was more or less similar to the Kangani system except that the former was characterized by gradation of middlemen employers. As compared to indentured system, coolies under this system were legally free. There was no contract and no fixed period of service.

The Kangani system began early, in the first quarter of the nineteenth century, and continued until its final abolition in 1938. The maistry system began sometime in the third quarter of the nineteenth century. Mow many Indians migrated under these systems is not known. In all, probably 10 million Indians migrants moved back and forth between India and Burma, Ceylon and Malaysia. The majority of Indian immigrants were Tamil – speaking Hindus, the remainder being Muslims, Christians and Sikhs.

Indian immigration to Southeast Asia also consisted of such groups as traders, shopkeepers, entrepreneurs, salesman, clericals and professionals. In Malaysia, until 1957 this constituted about one-third of the total immigration. A somewhat similar situation existed in Burma, though in the case of Ceylon non-labour Indian immigration was substantially less. South Indian Chettiar Hindus were the leading commercial and business community in Burma and Malaysia.

Free Passage Emigration 

The third form of Indian migration within the British Empire was ‘passage’ of ‘free’ emigration, or emigration of trading caste and classes. Passage emigration was predominant in South Africa as well as in the East African countries of Kenya, Tanzania and Uganda. Gujaratis and Punjabis immigrated to East Africa following the ‘opening up’ of East Africa by the British and other European powers. The completion of the Ugandan railway offered new economic opportunities in the hinterland as well as along the railway route. Indians, mainly Gujaratis, soon established themselves as shopkeepers. Subsequently, they monopolized trade and commercial activities in cities and towns. The Indians were merchants in native produce, carters and teamsters, small contractors, moneylenders, quarry-masters, dealers  in  lime,  sand,  stone  and  domestic firewood,  barbers,  saddlers,  boot  makers, nurseryman, tailors, etc. some of these businessman were highly successful and quite a few of them rose to prominence.

The success of the diasporic communities in fact led to the conflict with local populations. The future of Indians became uncertain. A large number of Indians from East Africa migrated to Britain, Canada and US, aptly described as ‘twice migrants’, and many of them are now well settled in these countries. The remaining Indians in East Africa continue to thrive in business and professions.

Voluntary Emigration to Western Societies 

The large-scale Indian immigration into the advanced industrial societies of Europe and North America began in the last sixties, though the history of Indian immigration goes back to the early years of the twentieth century in North America and the nineteenth century in Britain. The people who migrated to this region were of highly educated professionals and skilled or semi-skilled industrial workers. Early Indian migrants who went to settle down in Britain and North America were mainly Sikhs. Sikhs still constitute the single largest ethnic group in Britain, Canada and the US, although now more and more non-Sikhs are migrating. There are about 5 million people of Indian origin in Europe, North America and Oceania. In the US the majority of Indians are educated professionals – scientists, engineers, doctors, teachers, etc. In Britain and Canada, Indian communities are occupationally more diversified and relatively less well off.

It is evident that the western societies are also not free from racial discriminations and prejudices against ethnic minorities and migrants. It is argued that when the group becomes visible phenomenon it can face some sort of discrimination from the host culture. It could be due to conflict or completion with the national population. Whenever there are economic crises, a group of the host community may show non appreciation and discrimination towards the other group. Indians in the Europe and the North America have also been the victims of such discrimination time and again.

Above all, Indians communities in all these countries have begun to exert political influence in varying degrees. In the UK, four members of the House of Commons and eleven members of the House of Lords are of Indian origin. In Canada, Ujjal Singh Dosanjh rose to become the Premier of British Columbia for a couple of years. Indians are well settled in these countries and are living by and large, peacefully. They are, however, very conscious of their distinct identity and they try to preserve it.

Indian Labour Diaspora in West Asia 

The fifth and final pattern consists of Indian labour migration to West Asia. This migration patterns differs from the previous once in that all the migrants are generally ‘contract’ workers are not allowed to settle permanently in the countries of their destination. But this was not always the case, as will be clear from the following.

India has had trade and cultural relations with the Persian Gulf region since antiquity. However, there is evidence of Indian settlement in the region only since the sixteenth century. Small communities of Indian traders called baniyans existed in present-day Iraq, Iran, Oman, Yemen and Saudi Arabia in the seventeenth and eighteenth centuries. When the region came under British influence in the nineteenth century, Indian merchant communities flourished in a number of towns in the Gulf countries. Indians served as bankers, importers and exporters, customs farmers, agents for local merchants, government contractors, financiers, etc.

In the early 70s, it was observed that due to the spurt in oil prices, some oil producing countries of the West Asia have started investing in infrastructure development in a big way that created a huge demand for different categories of labour. As a result migrant workers from South Asia joined the labour market pre-dominantly in the Gulf countries such as Saudi Arabia, UAE, Kuwait, etc. Since mid-1980s, it was noticed that horizon of migration was expanded and migrant workers began to migrate to the newly industrialized countries in Southeast Asia and East Asia, such as the Republic of Korea, Malaysia, and Singapore. It was noted that they faced a shortage of labour and local workers were reluctant to take up the so- called 3D jobs – dangerous, dirty and degraded.

The number of migrant workers shows an increase after 1990, following the liberalization of overseas travel by the government. The majority of migrant workers from South Asia constitute semi-skilled and unskilled manpower (Ahn,p.,3). It is also observed that overwhelming majority of migrant workers are found to be males from India, Pakistan, Bangladesh, and Nepal, while in case of Sri Lanka only, women migrant workers constitute majority. Women are found to be more vulnerable to all kinds of exploitation in comparison to their male counterparts. Their human rights need to be protected along with their male counterparts.

Growing Composition of Labour Diaspora in the Gulf

It was noted that the percentage of expatriate workers in the GCC countries grew from 22.9 percent in 1975 to 38.5 percent in 2002 and then to 48.1 percent of the total population of 48.1 million GCC residents( Fargue & Brouwer,2012). Reliance on foreign labour has resulted in expatriates currently constituting 88 percent of the workforce in the UAE, 83 percent in Qatar, 81 percent in Kuwait, 72 percent in Saudi Arabia, 55 percent in Bahrain, and 54 percent in Oman. However, the composition of expatriate workers has changed periodically. If the current trend continues, it is projected that the number of migrant workers would grow by another 1 million. It is equally likely that the number of non-Gulf Arab workers in the GCC states will diminish, the presence of Asian workers would likely to grow further. The proportion of non-citizens in the Gulf has steadily increased during the last four decades which is contrary to the plans and desires of the Gulf countries. It is revealed by the data that the proportion of non-nationals vary from country to country, ranging from 32.0 percent in Saudi Arabia to 88.5 percent in the United Arab Emirates( Fargues and Brouwer,2012).

Diaspora Investment Policy 

The potential of Indian Diaspora was not realized by the Indian government in the early period of post India’s independence. It was noticed that the NRIs’ contribution in the development of India was realized only since 70s. Consequently, and Indian government began adopting policies and introducing schemes for increased NRIs involvement in India. As rightly stated by C. S. Bhat that liberalization and the new industrial policy in 1970s in fact, sought involvement of overseas Indians in investing both in terms of capital and technology. NRIs were encouraged to invest in India through certain attractive schemes such as Resurgent India Bond (RIB) and they were welcomed to launch industrial enterprises along with transfer of technology. There is hardly any evidence of reaching the majority of the People of Indian Origin, till the announcement of the new scheme of PIO Card was announced during the early 1999. The overseas Indian holders of the card could visit India without a visa, and also had other facilities in India regarding acquisition of properties etc. Besides engaging the NRIs and PIOs to understand their sentiments about India, special measures were devised to facilitate the involvement of the Indian Diaspora in the investment sector in  major  cities in India.

It is evident that Non-Resident Indians (NRI) and People of Indian Origin (PIO) have transferred knowledge and expertise that resulted into positive change in several sectors. On account of India’s foreign exchange reserves and the massive entrepreneurial energy has also led to the rise of India’s Information Technology (IT) and IT Enabled Services (ITES) sectors in India.

With the remittance flows at around US $ 71 billion and NRI deposits worth $513 million, the Indian Diaspora has always played an important role in adding India’s national income and wealth, thereby being actively involved in the country’s development and strategic decision making. The Indian Government has realized their significance, and is now moving ahead in the direction to tap productive investments from the overseas Indians in order to engage them as long-term partners in India’s growth process. These flows and investment in fact play a significant role for national growth and development in our country.

The current Government at the Centre has recently revised diaspora policy with the objective to tap the technical expertise from the Indian Diaspora for India’s growth and development. Their involvement in India’s signature programmes including cleaning of Ganga River, Swatch Bharat etc are considered to be vital for the progress of their homeland. The new policy is in fact looking at the Indian Diaspora in a new perspective. It is realized that their contribution in terms of time, expertise and investment in all the sectors of Indian economy and society are crucial for India. It is evident that the Diasporas provide important bridge between home and host societies by building transnational networks. These networks can serve the purpose of not only emotional and familial ties for Diaspora, but also cultural, social and economic interests of India.

Diaspora and Financial FlowsThe flow of funds from migrant workers back to their families in their home country is an important source of income in many developing economies. International migration from developing countries has increased significantly during the last two decades. Remittances sent by migrant workers contribute significantly in foreign exchange earnings and GDP growth of nations. They also enhance economic betterment of migrants’ families. They are considered to be the engine of economic growth for many developing countries like India. Remittances sent through informal channels are considerable in many developing countries such as Pakistan, India, Bangladesh, the Philippines and Sudan. etc. The true value of remittances is likely to be much higher as only a portion of total remittance flow through official channels.

Migration empowers migrant workers in terms of economic independence and higher self- esteem. Migration has made a significant contribution in terms of earning foreign exchange, enhancing migrants’ skills, and reducing unemployment and underemployment in labour sending countries like India, Pakistan, Bangladesh, Nepal, and Sri Lanka. In 2010, the flow of international remittances to developing countries stood at US $325 billion that rose to $406 billion in 2012, a growth of 6.5percent over the previous year. These flows rose 8% in 2013 and 10% in 2014 and are expected to reach $534 billion in 2015.

India is the world’s largest remittance recipient country in the World. According to latest information, it was estimated to be around $ US71 billion. (A global share of about 20 percent).It was estimated to be less than $2 million in 1970-71 which rose to more than $2 billion in 1980-81. Through-Out 80s, annual inflows remained more than $2 billion. But in 90s, a considerable rise in the annual inflows of remittances as shown in the figure. At the turn of the century, remittances rose to more than $12 billion in 2000-01. Remittances further went up to $ 55 billion in 2009-2010 and it finally rose to US $71 billion till the recent past. There is a substantial growth in remittance flows during the last two decades. Due to this huge inflow of the remittance, a lot of developmental activities are going on in India. This could be observed both at micro as well macro levels.

Economic and Social Benefits of Diaspora 

Diaspora from India is not only helping to reduce the situation of unemployment but also earn foreign exchange. This migration has also reduced poverty and bought prosperity in migrating regions. The Gulf money has also improved the income level of the migrants’ households considerably. This rising income level has improved the consumption, investment & saving patterns in migrating areas. Having worked in the Gulf, they become more skilled. Hence they are considered economic assets. Expatiate workers are also the backbone of the Gulf Economy and society.

Indian Diasporas are not only economically beneficial to India but also projecting country’s image abroad in the right perspective. In addition to economic remittances, they also bring social remittance to the home land. There is a visible change in their attitude towards education and social mobility in migrants’ families. A family which was looked down in the past is now welcomed in the social functions. A poverty stricken and desolated villages are suddenly becoming prosperous. A sizeable proportion of houseless population is now having own houses. These observations are made on the basis of common findings of some of the studies done by scholars.

Diaspora and Human Rights 

It is witnessed that the basic rights of Indian Diasporas are violated many times, despite their immense contribution to home and the host countries. This is far worse in countries that have a non-democratic set-up and/or tradition. Often there are reports of incidents of racial discrimination   and  human  right  violation  against  members  of  the  Diaspora Indian community. Their rights to conserve or practice their own culture have been challenged if not denied. They are being denied the basic human right of equality, social justice and human dignity in places like Fiji, Malaysia, the Caribbean, Gulf countries and even in some Western countries, which have become their homes.

It is interesting to note that Diaspora communities make a significant contribution to both homes as well host countries. Yet their basic rights are not ensured in both the countries. Their interests are not properly addressed either by the legal framework or by trade unions, and their welfare is not sufficiently secured in society. In contrast to the fact that none of the governments in South Asian countries has ratified ILO Conventions. Individual States have taken alternative measures, such as bilateral agreements, implementation of model contracts and establishing institutions to defend even partially migrant workers rights. Moreover, the 1990 Convention on the rights of Migrant Workers has  not been ratified by any major countries of the World. An early ratification of these Conventions by these countries will represent an initial step to improve the situation of Diaspora  workers and their rights.        By doing so would not only in the interest of Diaspora laour, but also in the interest of the both (home and host) countries as they would become more productive and motivated human capital.

Summary

We now conclude by saying that the Indian Diaspora is spread through-out the globe. It is so widespread that the sun never sets on the Indian Diaspora like that of the British Empire. Currently It is estimated to be around 25-30million which would be the world’s second largest diasporas next to China. They are characterized as far more diverse as compared to the Chinese diasporas. These communities are in fact the brand ambassadors of India, who are projecting the nation’s image wherever they are living. It is also witnessed that India gets economic and strategic benefits due to their presence worldwide. India receives enormous remittances due to large number of diasporas around the World. Gulf is one of the regions wherefrom the huge amount of remittance comes to India every year. Kerala is one of the Indian States that receives substantial amount of remittances. India has still maintained the first position in the World in terms of receiving remittances from abroad. The effects of financial inflow and remittances in all labour sending countries are noticeable in terms of reducing poverty, unemployment, etc.

It is witnessed that these inflows have increased consumption level, investment and purchasing power of migrants’ families. They  have  also  become  the  major  source  of remittances and foreign exchange to India. The significance of the remittance has been well understood by Indian government and has started giving importance to them. In order to channelize the affairs of Indians abroad, a new Ministry, named Ministry of Overseas Indian Affairs, was created in 2004. Since then this ministry is working in order to address the issues pertaining to diasporic community and is engaged in mutual benefit and interests.

Suggested Readings:

1. Anisur   Rahman,   Indian   Labour   Migration   to   the   Gulf:   A   Socio-economic   Analysis,   Rajat Publications, New Delhi, 2001
2. Fargues P. and I. Brouwer. “GCC Demography and Immigration: Challenges and Policies.” in National Employment, Migration and Education in the GCC, ed. S. Hertog (Cambridge: Gerlach Press, 2012)
3. Government of India, Ministry of Overseas Indian Affairs, Annual Reports( recent years) accessed through internet,http://moia.gov.in/writereaddata/pdf/Annual_Report_2014-15.pdf
4. Government of India, Report of the High Level Committee on Indian Diaspora,2001 accessed through internet, http://moia.gov.in/services.aspx?ID1=63&id=m10&idp=59&mainid=23
5. Indentured Labour Migration from India, accessed through internet, http://www.zahie.com/categories/details/history/indentured-labour-migration-from- india.html
6. Giovanna   Tattolo,   Arab   Labour   Migration   to   the   GCC   States,   accessed   through   internet, http://jmobservatory.eco.uniroma1.it/home.html
7. J. S Birks,. and C. A. Sinclair, International Migration and Development in the Arab Region ( Geneva: ILO, 1980,)
8. Jain, Prakash C,  ‘Emigration and Settlement of Indians Abroad’, Sociology Bulletin, 38(1): 155-68, 1989
9. Jain, Praksh C., Indian Diaspora: An Overview, Think India, New Delhi
10. Kapiszewski, Andrzej, Arab vs. Asian Migrant Workers in the GCC Countries, accessed through internet, http://www.un.org/esa/population/meetings/EGM_Ittmig_Arab/P02_Kapiszewski.pdfhttp://www.un.org/esa/population/meetings/EGM_Ittmig_Arab/P02_Kapiszewski.pdf
11. Khadria, Binod, The Migration of Knowledge Workers: Second-Generation Effects of India’s Brain Drain, New Delhi: Sage Publications,1999
12. Nasra M Shah, Restrictive Labour Immigration Policies in the Oil Rich Gulf: Implications for Asian Countries, Accessed through internet, http://iussp2005.princeton.edu/download.aspx?submissionId=50842
13. Patrick   Seale,   The   Challenges   Facing   Arab   Gulf   States   (2005),   accessed   through   internet http://www.genceglobal.com
14. Pong-Sul Ahn, (ed.), Migrant Workers and Human Rights: Out –Migration     from South Asia.ILO, Subregional Office for South Asia, New Delhi,2004
15. Sheffer, Gabriel (ed.), , Modern Diasporas in International Politics, London: Croom Helm,1986 Special Report,  Promoting  Investments  from  the  Indian  Diaspora:  A  New  Beginning,  An  OIFC Publication, accessed through internet, http://www.oifc.in/Uploads/MediaTypes/Documents/PromotingInvestments FromTheIndianDiaspora.pdf
16. Tinker, Hugh, A New System of Slavery: The Expert of Indian Labour Oversea, 1830-1920 London: Oxford University Press, 1974
17. Tinker, Hugh, The Banyan Tree: Overseas Emigrants from India, Pakistan and Bangladesh, Oxford University Press, 1977
18. Weiner, Myron, ‘International Migration and Development: Indians in the Pakistan Gulf, Population and Development Review, 9(1): 1-36,1982