Migration, debt, and transnational livelihood: Indian labour diasporas in the GCC states amid the pandemic

ABSTRACT

South Asian labour migration to the GCC States is a debt-financed migration in which labour diasporas mobilise resources from a variety of sources, often at exorbitant interest rates, to cover migration costs. In the event of the COVID pandemic, job losses and involuntary returns compound the problem of debt-financed migration, affecting the transnational livelihood of migrant families. This paper explores how the debt-financed migration shapes the transnational livelihood of Gulf labour diasporas amid the pandemic. Empirically, this paper draws on the experiences of 60 Gulf migrants from the Indian state of Bihar. This study reports that the families diversify their labour resources by joining Gulf labour market and migration generates remittances that provide improved livelihood for their families. Although unforeseen events such as the pandemic may delay migration episodes and thus mount the debt burden on migrants, migrants nevertheless find ways to join the Gulf labour market and erk out a trananational livelihood.

KEYWORDS:

• Migrant indebtedness
• gulf migration
• Indian diaspora
• labour migration
• transnational livelihood

Introduction

There is an increasing convergence in research findings that international migration of labour often contributes to better access to food and nutrition, education, healthcare, and, to some extent, capital accumulation in the global South (Agarwala 2022; De Haas 2010; Hugo 2003; Piper 2009; Rajan 2019; Rajan and Saxena 2019; Safran, Sahoo, and Lal 2009; Ullah 2010). Low-skill migrants from the developing countries typically make more money doing menial work abroad than in their home countries (Rahman 2012; Ullah, Ferdous, and Chattoraj 2022). A lion portion of migrants’ earnings often go back home to their families as a contribution to the family income pool and livelihood (Rahman, Yong, and Ullah 2014; Rajan 2014). Essentially, livelihood refers to assets, capabilities, and activities that people use to obtain the necessities of life (Chambers and Conway 1991). Livelihood strategies can be broadly understood as the activities that families undertake to secure and maintain a sustained flow of incomes for living (Sunam, Barney, and McCarthy 2021). Labour migration has become one of these strategies, which has become increasingly popular in the global South and the increasing flows of family remittances document its implications for livelihood (De Haan 2012; Dutta 2023; Kamrava and Babar 2012; Rahman 2012; Rahman and Hossain 2015; Rajan 2019; Ullah 2017). The existing literature often shows that when families join in international migration of labour by sending one or more members overseas for work, the primary motive of such migration is to generate incomes and safeguard a transnational livelihood (Babar and Gardner 2016; Hugo 2003; Mahapatro et al. 2017; Mohanty, Dubey, and Parida 2014; Sikder and Higgins 2017). This study defines transnational livelihood as the strategies migrants and their families use to improve their quality of life and earn a living across national borders.

One of the prime destinations in Asia for labour migration is the Arabian Gulf states. The labour market of the six GCC (Gulf Cooperation Council) states that consist of Qatar, Saudi Arabia, Bahrain, Oman, Kuwait and the United Arab Emirates, has created an almost undying demand for labour diasporas, enabling intra- and inter-regional labour mobility in a growing and sustained manner since the early 1970s (Babar 2020; Fargues and Shah 2017; Rajan 2020a). There are striking similarities in migration policy and practices in the GCC states, especially laws, regulations, and institutions that shape the overall procedures of entry, stay, and exit of migrants (Babar 2020; Fargues and De Bel-Air 2015; Fargues and Shah 2017; Gamburd 2000; Gardner 2010; Rahman 2012). Since the Gulf labour market is growing exponentially and the local labour force is not adequate to meet the enduring demand for diverse workforce, potential Gulf migrants tend to shoulder many burdens on them to secure a desirable transnational livelihood. This also includes exorbitant migration cost that they pull together from different internal and external sources, incurring debt in the migration process – a phenomenon that is widely understood as a debt-financed migration in Asia and elsewhere (Abella 2018; Abella and Martin 2014; Moniruzzaman and Walton-Roberts 2018; Rahman and Yong 2015). The debt is invariably embedded in the Gulf labour diaspora context (Ullah 2010; Zachariah, Mathew, and Rajan 2001). As such, the objectives of this explorative study are, on the one hand, to increase understanding of how and why debt-financed migration shapes the lives of Gulf labour diasporans; and, on the other hand, to specifically address how labour diasporas engage in transnational livelihood amid the pandemic.

An overarching intention that unites migrants from different regions in the Gulf is to live and work in the Gulf for an extended period in the working age (Babar 2020; Babar and Gardner 2016; Gardner 2010; Jureidini and Hassan 2019; Kamrava and Babar 2012). However, the intention to work does not necessarily take a linear path for all; it also meets with situations that are sometimes beyond control. For instance, the COVID pandemic exposed Gulf migrants to an unprecedented situation, leaving them to jobless and forceful deportation (ILO 2020; Rahman and Hasan 2022; Ullah, Chattoraj, and Ibramin 2022). The problem of debt-financed migration is amplified during the pandemic because the Gulf labour diasporas face an unanticipated economic reality caused by the COVID pandemic (Ferdous and Ullah 2022; Rahman and Hasan 2022). This study draws on experiences of Indian labour diasporas in the GCC states. We have chosen the case of India because India is a major contributor of labour diasporas to the Arabian Gulf States since the early twentieth century (Chanda and Gupta 2018; Rajan and Percot 2020; Wright 2021). In particular, this paper addresses how labour diasporas arrange the debt and pay it off in their migration and remigration to the Gulf amidst the pandemic. We then look into how pandemic affects the livelihood of migrant families. We underscore the complexities brought on by the onset of pandemic on the migrants’ experiences and the interactions between debt-financed migration and transnational livelihood.

We adopt the definition of migrant employed by the United Nations by which a migrant is a person who moves to a country other than that of his or her usual residence for at least 12 months (Anderson and Blinder 2011). We see migrants as mobile workers who are part of a labour diaspora (Cohen 2008). Existing literature often shows that the contemporary labour diasporas differ from the colonial and indentured labour diasporas (for details, see Elo, Silva, and Vlacic 2023). There exists extensive literature that delineates different phases of diaspora studies, extended notion of diaspora, studies on classical and new diasporas and debates about what constitutes diaspora with old and new understanding of diaspora (Brubaker 2005; Butler 2001; Jayaram 2004; Sahoo 2015; Samaroo, Gooptar, and Mahabir 2022; Vertovec and Cohen 1999; Yong and Rahman 2013).

Cohen argues that the labour diaspora represents those who ‘move across international borders to work in one country while remaining citizens in another’ (Cohen 2008, 61). We build on Cohen’s definition and employ it to refer to Gulf migrants as labour diasporas. Labour diaspora is often seen as transitional with ‘station in life’ approaches to their location, not representing permanently settling immigrants (Cohen 2008, 78). The term ‘diaspora’ is used as it captures the dynamics and embeddedness of the migrants and also addresses the idea of return (for details, see Brinkerhoff 2009). Unlike past labour diasporas, contemporary labour diasporas are not forced; they have agency; they decide where to go and how long to stay abroad (Elo, Silva, and Vlacic 2023). A return orientation in today’s globally interlinked society must consider, which is also popuplarly known as ‘transnationalism,’ where the ability to return and remigrate is emphasised (Castles and Wise 2008; Faist, Fauser, and Reisenauer 2013; Roy and Sahoo 2017). Thus, understanding the contemporary labour diaspora has become increasingly important and deeply connected with the global mobility of people, looking for work overseas and improving their transnational livelihood. It is this transnational character of current labour diasporas and their ceaseless struggles (migration and remigration) to make a living for families is at the core of this paper.

We proceed by elaborating the key conceptual issues and debates involving migration, debt, and transnational living under various challenges including pandemic, followed by a section on the sources of data used for this research. Then, we explore migration costs with reference to the role of debt in migration financing. The pandemic affects labour diasporas’ ability to pay the debt and to provide a livelihood for families. We address the issue of repayment of the debt and transnational livelihood in the next two sections. In the final section, we conclude with further areas of empirical research.

Conceptual issues

Gulf migration affects migrant family livelihood in at least two ways: one is the outflow of indispensable family resources for arranging the migration costs, and the other is migrant remittances from family members overseas (Rahman 2015). There are inherent costs in international migration of labour that involves various types of expenses such as passport fee, recruitment fee, visa fee, medical examination fee, transport cost from home to big cities where most recruitment agencies are located, official clearance fee (e.g. documentation and emigration clearance fees), air tickets, and so on (Abella 2018; Abella and Martin 2014; Rahman 2015; Rajan 2019). We refer to these migration-related expenses, paid by migrant workers as migration costs in our paper. These costs can be further divided into ‘statutory costs’ and ‘implicit costs’ (Abella 2018). Statutory costs can be understood as the standard cost associated with the overseas labour migration such as recruitment fees, work visas, etc. Implicit costs refer to the hidden costs associated with fees that are paid to the recruitment agencies and/or brokers to secure a job overseas by the migrants. Probability of securing a job overseas itself is a function of these implicit costs. There also exists another classification of migration costs: direct and indirect migration costs (Rahman 2017). The direct migration cost refers to the expenses visible in the migration process such as payment for tickets, visas, medical check-ups, and administrative fees while indirect, hidden, or invisible cost implies the decline in family incomes as a result of the dispossession of income-generating assets or the repaying of debts over time (Rahman 2015; Rahman and Lian 2009; Ullah 2010; Zachariah, Mathew, and Rajan 2001).

Exorbitant migration costs, complex migration financing, and risks associated with migration financing are enormous (Abella 2018; Abella and Martin 2014). M. Moniruzzaman and M. Walton-Roberts introduce the concept of ‘resource backwash,’ that is, resources that flow away from the migrant families in order to support and sustain the migration event in explaining South Asian migration to the Arabian Gulf region (Moniruzzaman and Walton-Roberts 2018). According to them, migration financing involves significant resource outflows from households and this diminished access to these assets may have a negative impact on the ability of households to develop sustainable livelihood (Moniruzzaman and Walton-Roberts 2018). Although migration generates remittances and the bulk of migrant remittances are transferred to the families back home, the use of remittances often gets skewed towards the payment of debt and thus impact of remittances is often undermined by the debt-inducing migration process (Ahmad 2019; Buckley 2012; Davidson 2013; Rahman 2015).

The migration finance and related personal debt have received some attention in recent literature (Buckley 2012; Koh 2020; Martin 2010; Moniruzzaman and Walton-Roberts 2018; Piper 2009; Raghuram 2009; Rahman 2015; Santhya et al. 2022; Ullah 2010; Walton-Roberts and Rajan 2013). Buckley examined migration costs and related debt burdens through case study of Indian workers from Kerala in Dubai, United Arab Emirates (Buckley 2012). Buckley showed how debt-financed migration resulted in economic insecurity for returning migrants. Walton-Roberts and Rajan demonstrated migration strategies of nurses from Kerala and their complex migration financing including the issues of debt (Walton-Roberts and Rajan 2013). Rahman examined Bangladeshi migrants’ migration costs and associated debt issues and showed that the complex, multi-layered debt-financed process in the Arab Gulf migration (Rahman 2015). Rahman reveals the existence of multiple sources to finance the migration and elaborates how migrants become indebted in the migration process.

The existing literature tends to report two forms of debt-financed migration in the Arabian Gulf states: debt bondage migration and debt-financed migration (Gamburd 2000; Rahman 2012). In debt bondage migration, migrants do not pay for recruitment or travel expenses up front but work them off to their employers after they arrive. In debt-financed migration, migrants borrow money from moneylenders and relatives and/or sell family assets, including land, houses, gold ornaments, livestock, and so on, to pay for their recruitment and travel expenses up front. This form of debt migration is common among male South Asian migrants in the Gulf (Nair 1999; Osella and Osella 2000; Rahman 2000).

Credit from different sources is generally considered a debt, but the use of family resources for migration requires clarification (Rahman 2015). In the Indian society, the family head uses the family resources for some greater cause, such as migration of some family members overseas for work (Singh, Keshri, and Bhagat 2016). In many families, members perceive such an uneven transfer of resources as altruistic (Peebles 2010; Singh, Keshri, and Bhagat 2016). At the family level, it promotes social obligations and reciprocal exchanges. A transfer of resources is often understood by other members as credit, even if it is not expressed as such, but seen as debt by the recipient, demanding returns of resources to the family whenever it is needed (Singh, Keshri, and Bhagat 2016). Resources are not necessarily returned in cash, as is the case with other types of debt, such as those borrowed from moneylenders. In the context of Indian society, the return may take the forms of supporting the family for a long time. This familial form of the debt that reinforces the continued support to the families’ livelihood after migration substantially explains why transnational livelihood emerges and persists in Gulf migration (Keshri and Bhagat 2012; Rahman, Sameer Babu, and Ansari 2023).

During the late 1990s and early 2000s, livelihood research gained scholarly attention by examining how people in developing countries organise their lives by adopting a deliberate choice of a combination of activities to maintain, secure and improve their lives generally (Adiku and Kandilige 2023; Carney 1998; De Haan 2012; Thieme 2008). Livelihood simply refers to both making a living and improving the quality of life. In livelihood research, instead of focusing on poverty, the emphasis is on opportunities, agency, strategies, and the resources which enable poor people in the developing countries to make a living (Adiku and Kandilige 2023; Carney 1998). Generally, these resources include human capital, cultural capital, financial capital, and social capital, which enable people to make a living and improve their wellbeing (De Haan 2012; Thieme 2008). By leveraging some of these resources that most families in the developing world do have at their disposal, families often take advantage of transnational livelihood opportunities (McDowell and de Haan 1997). Thus, migration has become an important means of acquiring resources for livelihoods in many regions including South Asia.

It is evident that people mostly migrate with the hopes of improving lives for themselves and fulfilling social obligations to their families (Cohen 2011; De Haas 2007; Eversole and Johnson 2014; McDowell and de Haan 1997; Rahman and Yong 2015; Rajan and Saxena 2019; Skeldon 2008). By transnational livelihoods, we mean the opportunities for working overseas, whereby migrants use their incomes to support their families back home and to achieve a better quality of life. Several studies have demonstrated that migrant families are better off through the mobilisation of remittances for food security, education, and healthcare and migrant families tend to enjoy better access to them compared to non-migrant families (Cohen 2011; De Haas 2010; Guarnizo 2003; Mahapatro 2015; Nzima, Duma, and Moyo 2017). However, recent studies also suggest that labour migration can also create new forms of vulnerability and make transnational livelihood unstable due to different forms of precarity in the migration cycle (Moniruzzaman and Walton-Roberts 2018; Singh and Rajan 2015; Sunam, Barney, and McCarthy 2021; Ullah, Chattoraj, and Ibrahim 2022).

In the Gulf region, the concept of ‘precarity’ is often associated with the lives and working conditions of migrants, which arise from the embeddedness of different forms of precarity in the migration process (Parrenas et al. 2018; Silvey and Parrenas 2020). The notion of ‘precarity’ has recently gained popularity in the study of migration, citizenship, refugees, and human trafficking (Anderson 2010; Paret and Gleeson 2016; Schierup, Alund, and Likic-Brboric 2015; Standing 2016; Waite 2009). Rachel Silvey and Rhacel Parrenas introduce the concept of ‘precarity chains’ to refer to the series of precarities that constitute the cycle of migration for migrants in the Middle East migration system (Parrenas et al. 2018; Silvey and Parrenas 2020). They argue that migrants are embedded in three forms of precarity in various stages of the migration cycle: the precarity of migration, the precarity of labour and the precarity of future. Firstly, the precarity of migration is engendered by migrants’ levels of indebtedness prior to migration and their dependency on a recruitment agency in finding jobs (Silvey and Parrenas 2020). Secondly, the precarity of labour stems from their employment in countries of destination such as the GCC states that offer only limited-term contracts and very limited rights to workers. Thirdly and finally, the precarity of future that stems from the low levels of income, savings, and investment they are able to accumulate, that is, the financial struggles that haunt many Gulf migrants until retirement. As a result, these different forms of precarity have an impact on the transnational livelihood, challenging the sustainability of migration for millions of Gulf migrants.

Apart from the precarity chains, the COVID pandemic has further accentuated the issues of debt and transnational livelihood in the Gulf. The COVID pandemic caused unprecedented disruptions in the Gulf labour market, forcing closure of the businesses and development projects and deportation of thousands of migrants to their home countries (Ullah 2022; Ullah, Nawaz, and Chattoraj 2021; Weeraratne 2020). Thus, migrants were affected by the pandemic – both directly in terms of the threat to health and life, and indirectly due to the livelihood impacts of countermeasures such as border restrictions and harsh lock-downs (Sengupta and Jha 2020). The impact of COVID-19 on labour diasporas has been the subject of several studies that primarily report the plight of migrants amid the pandemic (Abella 2020; Bagdasarian and Fisher 2020; Connell 2020; Dandekar and Ghai 2020; Datta-Ray 2020; Koh 2020; Ratha et al. 2020; Sirkeci and Yucesahin 2020).

The pandemic has not only impacted on the lives and working conditions of migrants, but also aggravated the situation of migrant indebtedness in the Gulf migration process. Migration to the Gulf is thus a risky investment for a family without readily available resources to finance migration, especially at the time of pandemic. In general, livelihoods are more secure when families own assets, have access to resources and are engaged in income-generating activities. Migrant families negotiate the formidably complex and costly livelihood strategy during the pandemic by betting on debt and valuable family resources in the migration process. This study builds on this existing conceptual advancement in the linkages between debt-financed migration and transnational livelihood by adding the pandemic dimension to it.

The Bihar emigration context and sources of data

Empirically, this paper draws on the experiences of migrants in the Indian state of Bihar. There is a long history of outmigration of workers from Bihar, a surplus labour state, both within other Indian states and the GCC states in search of better living conditions and job opportunities (Datta et al. 2014; Dutta 2023; Keshri and Bhagat 2012). The state of Bihar, one of the poorest states in India, is characterised by conditions of excessive population, poor industrial climate, highly unequal pattern of landholdings, low level of urbanisation, low literacy, chronic poverty, and abject socio-economic inequality (Chanda and Gupta 2018; Dutta 2023; Sasikumar 2019). These socio-economic circumstances have forced its residents to look for employment opportunities in economically prosperous other Indian states as well as in the GCC states (Abbas 2016; Bhagat and Kumar 2021; Datta et al. 2014; Dutta 2023). Traditionally, the labour diaspora from Bihar has been dominated by men (Dutta 2023; Rajan and Sumeeta 2019b). Since the great recession of 2008, the demand for low and semiskilled labourers has risen in the GCC countries, which has led to a remarkable increase in the migration of workers from the eastern states of Uttar Pradesh and Bihar to these countries. According to the Ministry of Overseas Indian Affairs, it appears that Bihar witnessed a significant increase in the number of migrant workers to the GCC countries between 2001 and 2011, with the figure increasing from 4% to about 12% (Santhya et al. 2022).

Even though there is a lack of publicly available microlevel data on migrant workers to foreign countries, the total number of emigration clearances at the Indian airports provides some indirect evidence of their numbers. According to data compiled by the Ministry of External Affairs,¹ during the period between 2011 and 2016, Bihar ranked second to Andhra Pradesh (31%), receiving 15% of all emigration clearances during the period between 2011 and 2016 (Santhya et al. 2022). The Regional Passport Office in Patna, according to the economic survey of Bihar 2021-2022, issued more than 3 lakh passports annually on average between 2015 and 2020, which indeed is a large number. Labour diaspora from Bihar to the GCC countries have been typically of low-skilled and semi-skilled workers and a substantial majority of them have less than 10 years of formal schooling (de Haan 2010). According to Census data 2011, the districts of Siwan, Gopalganj, East Champaran, and West Champaran account for approximately 60% of migrant workers from Bihar to the GCC countries (Bhagat and Kumar 2021; Chanda and Gupta 2018). The economic survey of Bihar 2021-2022 also reveals that the districts of Siwan and Gopalganj account for more than one-fifth of the total issuance of passports in Bihar (Santhya et al. 2022).

This study is a qualitative study based on interviews conducted with 60 migrant returnees between July 2022 and November 2022. Among the participants, most of them originated from the villages located nearby the district town of Gopalganj in Bihar. An interview usually lasts between 50 and 60 minutes on average, but there were some exceptions. The participants are chosen purposefully with working experiences in any of the six GCC states. We used a semi-structured interview schedule which contains a battery of questions on a number of core issues such as first-time emigration motivations, costs associated with the migration process, channels used for emigration, occupational characteristics, work experience in the destination countries, remittances sent and their respective uses, economic and psycho-social benefits of migration, reasons for return, their experiences upon return amid the pandemic, remigration intentions, and their reintegration at the origin community. The interview schedule is, thus, meant to cover a wide range of issues and obtain a holistic understanding of migration, debt and livelihood about Indian labour diasporas from Bihar.

All the participants in the sample were men, and 65% of the returnees had previously worked in more than one Gulf country during their career. We found a wide range of ages among the surveyed migrants, but about three-fourths of them fell between the ages of 25 and 40, which is a well-defined age group for Gulf migration. Among the sampled migrants, the average age was 32 years of age. There was a minimum and maximum age range of 20 years and 45 years in the sample. In this survey, approximately 90% of the respondents were married, and 70% of them reported having at least one child. The average family size of the interviewees was eight members based on living and eating together. A majority of the sample participants came from scheduled castes (SCs) and other backward castes (OBCs), but there were also a handful from general castes who were found in the sample. The existing literature also reports that a sizeable percentage of the Gulf migrants come from socially and economically disadvantaged groups like other backward castes (OBCs) and scheduled castes (SCs) (Dutta 2023; Santhya et al. 2022). Furthermore, migrants are frequently comprised of a class of small, marginal, and landless individuals (Bhagat and Kumar 2021).

Overall, the sample participants had very low educational attainment levels in terms of their educational attainment. There were only six migrants out of a total of 60 migrants who had completed 15 years of formal education. Nearly 75% of the migrants had completed five years or less of formal education, and the remaining six had completed 10 years of formal education. In the Gulf countries, many migrants entered the economy as low and semi-skilled workers, such as carpenters, masons, plumbers, cleaners, factory workers, and odd jobs in the construction sector. There were around three-tenths of migrants who reported working in the Gulf for a period of two to three years; 60% of the sample reported working for a period of three to six years; and the remainder reported working for a period of six years or more. For the sample of respondents, the average number of years spent in the Gulf was four and a half. As for the question of their return, the majority of the participants reported that their return was involuntary. Several reasons including family reasons, health reasons, expiration of work visas and non-renewal of the contract upon expiry, psycho-social reasons, and the job losses brought on by the coronavirus pandemic were offered as the explanations for their involuntary return. It is estimated that nine-tenths of the participants reported their intention to remigrate in the future. Inability to generate a stable source of income at home, lack of better employment opportunities at home, depleted savings, accumulation of new debt due to unanticipated medical contingencies of the COVID pandemic, and a lack of capital accumulation primarily influenced their decision to reemigrate.

Debt-financed migration

Temporary labour migrants’ market to the Gulf nations is characterised by conditions of information asymmetry, imperfect competition, lack of knowledge of employment conditions in destination countries, lack of transparency, inefficiency etc., all of which give rise to ‘transaction costs’ associated with overseas labour migration (Abella 2018). The actual migration costs borne by the migrants are significantly inflated by these transaction costs. Migrants are willing to pay higher costs to secure a job as the labour market is characterised as one of excess supply and low demand. In addition to giving recruitment agencies, often as monopsonists (single buyer condition), unfettered power; the excess supply of low-skilled workers leaves migrant workers with weaker bargaining positions. Studies such as (Abella 2018; Abella and Martin 2014; Ahmad 2019; Gaur 2019; Khan 2019; Rajan, Sami, and Raj 2017; Soni 2019) have shown that emigration from India to the GCC countries is a costly venture. A significant part of this migration cost comes from the implicit costs that have fallen disproportionately on the migrant workers. What is more appalling is that migrants are least aware of the itemised costs that are borne by them in their process of emigration. Migrating overseas for work is often a coping strategy against harsh socio-economic conditions employed by the labourers. Aspiring migrants view migration as a gateway to their better socio-economic conditions in future. This helps to explain why they are willing to take risks to work even in countries they may not be familiar with.

Temporary migration to Gulf nations begins with requirements of obtaining a work visa to secure employment opportunities (Abella 2018; Rahman 2013). Work visas, that are issued by the respective state agencies at the destination countries, are ordinarily issued for two to three years and are subject to renewal depending on the requirement and availability of jobs. To begin the migration procedures, which involves obtaining work visas, arranging for medical examinations, making passports, taking skills tests, purchasing airline tickets, etc., prospective migrants must pay a portion of the associated financial costs to these recruiting agencies in advance. The market for migrant labour is plagued by information asymmetry between workers and employers that encourages ‘rent-seeking’ behaviour by the intermediaries. Intermediaries (Manpower agencies and/or brokers) exercise power over the job seekers in allocating jobs that are scarcely available. Autor (2008) points out underreporting of information about job seekers and vacancies in the market. Excess supply of labour in the market creates conditions that lead migrants to compete fiercely for work visas. The competition among the migrants is exploited by recruitment agencies for their profit margins, which raises the overall cost of migration. This situation probably explains the wide variations in the emigration costs reported by the sample participants. The emigration costs depend upon several factors including individual profiles, educational attainment, skills, social networks both overseas and at home, occupational categories, destination countries, and the channels undertaken for migrating overseas. Five out of a total of 60 respondents reported moving to Gulf nations with the aid of friends, relatives, and extended family members. The migration costs were found to be, on average, 35–40% less when it was facilitated by friends and family as opposed to when facilitated through recruitment agencies and/or brokers. It was also found that the first-time migrants had to pay higher transactions costs compared to those who had prior experience working in the Gulf. The average cost of migration for the sample was INR 70,000 (nearly US$846).²

Given their poor socio-economic background, migrants often resort to borrowings to pay for their migration expenses. Family or own personal savings, borrowings from family, friends, extended family, mortgaging valuable family assets, loans from formal credit institutions such as banks and microfinance companies, and unsecured debts from the local moneylenders have served as source of funds in the migration process (Rahman 2015; Santhya et al. 2022). Of all the major sources of funding identified above, all but personal savings fall under the category of debt. A substantial 90% of the sample reported using debts to cover their migration costs. Six out of a total of 60 reported using their own/family personal savings, 26 of them reported obtaining loans from friends and extended family members, and the remaining reported taking unsecured loans from local moneylenders. Those migrants, who had previously worked in the Gulf, also relied on debts to pay for their remigration expenses. Most migrant workers claimed to have borrowed the funds at a monthly interest rate of 5%, which translated into annual interest obligations equal to 60% of the principal amount. Surprisingly, no participant in the sample reported borrowings from formal credit institutions such as banks etc. The reliance on informal credit sources by migrant returnees is attributed, among other things, to quick access to credit, flexible repayment terms, no paper documentation, and absence of collateral requirements such as land or gold, that are required by the formal credit agencies (Ahmad 2019; Santhya et al. 2022). Recalling experiences from his first-time migration, a participant narrated:

I used to work at a restaurant as a dish washer to support my family after father’s death. I am the eldest one in a family of six members. My mother used to work on farms, doing household jobs at their (referring to people from upper caste) house to feed her family. I chose to migrate as there were no better opportunities in my village, and many people from my village had gone to work in the Gulf countries. I could not secure a loan from banks as they asked for collateral, so I borrowed some money from my relatives and also borrowed Rs.60,000 (nearly US$ 725) on interest from a local moneylender. I paid Rs.72000 (nearly US$870) to secure a work visa for Saudi. I worked as a helper on a construction site over there. (A migrant returnee, age 24 years, Bhit Bherwa, Gopalganj, July 2022)

The role of debt in the migration process is inherently complex. On one hand, it facilitates movement even for the poorest segments of society to realise upward economic mobility. On the other, it leads to significant precarities for migrants as indebtedness forces them to accept harsh working conditions at the destination, weak bargaining power vis-à-vis their employers, exploitation, and longer duration of stay than intended etc. (Charmian 2018; Sasikumar 2019; Soni 2019). One migrant reported:

I had secured a work visa for job of a plumber in Saudi Arabia. When I reached there, I was asked to work on a construction site where I had to work in a shift lasting 12 to 13 h. After working for almost three months, I contacted my supervisor to inform him that I had been hired as a plumber. My supervisor threatened to send me home if I asked any questions. I had to keep working there as I could not have afforded to come back due to difficult conditions at home. (A migrant returnee, age 27 years, Bhit Bherwa, Gopalganj, July 2022)

Indian labour diasporas, particularly those in low-paying informal sector jobs, take on debt in the hope that they would be able to repay it with their wages at their destination nations. Nevertheless, in the event of an involuntary return, the precarity of the labour diaspora's existing fault lines becomes very apparent. The COVID pandemic forced upon the Indian diaspora in the Gulf countries an involuntary return. The economic effects of the pandemic, which were brought on by a complete shutdown of economic activities in the Gulf, were disproportionately worse for the labour diasporas. They faced an income crisis on one hand, while their expenses, such as consumption spending and debt obligations, continued to mount. In the event that they or some of their family members contracted the virus, the associated medical costs significantly reduced their financial standing. The ability of migrants to survive during such difficult times rested heavily on their social networks, their occupational status, their negotiation skills, and their ability to borrow money from friends or family members. Due to unanticipated economic realities and severe financial woes, migrants again had to borrow money from outside sources in order to maintain their livelihood. During the pandemic, the labour diaspora was exposed to precarious living conditions due to a lack of adequate and timely support from their respective state authorities. A migrant returnee who returned from Saudi Arabia amidst the pandemic narrated:

I returned from Saudi Arabia in the month of February 2021. After a month, my wife was infected with coronavirus. She had to be hospitalized in a private hospital as there were no beds available in the government hospitals. She was kept in hospital for five days and the hospital charged us more than 50,000 INR (nearly US$ 603). One of my relatives assisted me in arranging this money since I returned empty handed from Saudi Arabia. (A migrant returnee from Saudi Arabia, aged 29, Basdila, Gopalganj, November 2022)

With gradual opening up of economy and easing of travel restrictions in the Gulf, migrants prepared to return to the Gulf countries. However, the post-pandemic period saw a significant increase in migration costs as a result of reduced work permits, rising airfares, quarantine fees, and other associated fees for the migrants. Since fewer work permits are available after the pandemic, recruitment agencies profit significantly from their rent-seeking behaviour. As a result of the fierce competition for jobs in the Gulf, migrants are forced to pay much more than they paid previously. According to the data collected, approximately 20% of the monthly remittances sent home were used to pay off debts. A migrant worker's debt obligation thus serve as a determining factor between expected and realised socio-economic benefits.

Repayment of debt amid the pandemic

Usually, debts are seen as instruments that can be quantified, monetised, commodified, and that are traded between the debtors and the creditors. This way of looking at debts is an oversimplification of the other complexities that arise with migrant indebtedness. The simplification of debt quantifications and monetisation obscures the unequal relationships between the two parties in social networks (Charmian 2018). After all, debts carry much more than only being a quantitative instrument. In rural networks where everyone knows each other, debts possess several social characteristics. We focus on the quantitative aspect of debt repayments first and after that we endeavour to throw light on the social characteristics of debts in the context of migration (Singh, Keshri, and Bhagat 2016).

Migrant’s capacity to repay debts depend upon a variety of factors including timely payments at the destination, total debt obligations, occupational characteristics, social networks, duration of stay, family size, accrued debts in the past, unanticipated contingencies at home, and the number of breadwinners in the family. During the pandemic, the labour diasporas experienced great difficulty in keeping up with their debt obligations due to involuntary returns (Abella 2020; Rajan 2020b; Rajan and Arokkiaraj 2022; Rajan, Rajagopalan, and Sivakumar 2021; Santhya et al. 2022; Tripathi and Agrawal 2022). A total of 35 (approximately 60%) of the 60 migrants in the sample had outstanding loans at the time of the interview. Among the 35 migrants, 18 had moneylender loans to repay. As a result of high interest rates charged by moneylenders, the principal amount nearly doubles in 18 months, and most repayments are used to pay interest only. This results in the migrants being caught in a vicious cycle of credit–debt relationships, which adversely affects their ability to accumulate capital. The use of moneylenders for financing occurs in a setting that can be described as ‘embodiment of trust’ in rural areas. In such a setting, the relationship between borrowers and lenders remains unequal even after debt repayments. Debts involve the transfer of resources and abiding attachment between debtors and creditors, but they differ in terms of morality, formality, visibility, temporality, and entanglement effects (Charmian 2018). Since there is no formal contractual agreement signed between the two parties, moneylenders frequently resort to coercive means such as harassing the family members left behind, abusing them for household purposes, humiliating the family in front of their communities, etc., to ensure timely interest payments. As one migrant narrated his story:

I had borrowed INR 80,000 (nearly US$ 970) from a local moneylender at a monthly interest of 5 per cent per month. There was a delay in migration process, and I could only go to Saudi Arabia after 4 months had passed since the time I had borrowed. The initial few months since I landed in Saudi were very tough and harsh due to irregular payments and I was not able to remit any money back home. They (referring to the moneylender and his associates) harassed and abused my father in front of everyone in my village. I had to sell a piece of my ancestral land finally to pay off the debt. (A returnee from Saudi Arabia, aged 34, Basdila, Gopalganj, November 2022)

Borrowings from friends, relatives, and extended family usually do not involve an interest burden for the migrants. These loans, however, carry a different characteristic that must be borne by the labour diasporas. The social characteristics of debts are often referred to as social debts, which involve social expectations, such as: ‘I helped you and now you help me. ‘In Gulf migration, return is deeply ingrained in its very nature and hence labour diasporas place high value on their social networks in the community (Rahman 2015). Due to their interdependence on one another's survival mechanisms, the expectations from migrants increase manifold. Migrants are often expected to contribute to social and ceremonial needs such as building temples in their villages, participating in religious yagnas, marrying off female relatives or friends, and helping with business ventures. In the post-pandemic period, there has been an increase in expectations of repayment of social debts by the labour diaspora. One interviewee narrated:

Last year, my village committee decided to construct a temple near a lake. They collected ‘chanda’ to fund the construction cost from all the households. They expected me to contribute at least twenty percent of the overall costs as they think that my economic condition was better than others in the village. I cannot say no to such expectations as when I am not around, they are the ones who take care of left behind family members during difficult times. (A returnee from Qatar, aged 38, Bhit Bherwa, Gopalganj, July 2022)

Another returnee narrated that.

I had borrowed money from a distant relative of mine two years ago. I returned to him the full amount last year only. Now, I have been asked to support him in marrying a female member of his family. The amount that is asked is much higher than I can afford. I somehow have to manage to arrange money, even if I have to borrow from someone. (A returnee from Oman, aged 33, village: Gamharia, Gopalganj, November 2022)

Debt is usually conceptualised as an individual-level phenomenon. However, it is not uncommon to find debts incurred at household level in developing countries. This refers to loans that the family head or another family member has secured for the migrants. While it is expected from the migrant to repay the debt from their earnings, they are also expected to take care of other concerns at the family such as marrying off a female family member, supporting education for children of their brothers/sisters, helping someone else from family in migration etc. It is not hard to identify that social debts borne by the diasporas form a major component of their debt repayments. This social expectation further accentuates their conditions in the destination countries and has the potential to have significant negative impact on their mental health. Therefore, it is not surprising to find low levels of capital accumulation by the migrants even after a longer duration of stay in the destination countries, given the extent and nature of debt arising out of the migration process.

Transnational livelihood amid the pandemic

In the migration process, debts can be both a freedom-inhibitor and a facilitator for better future prospects. Migration and development literature view debt-financed migration as that severely constrains the freedom and alternatives available to migrants (Davidson 2013). However, it is worthwhile noting that, in spite of being aware of the limitations placed on their freedom, the labour diaspora willingly opts to trade short – to – medium term freedom for longer – term benefits. Overseas labour migration offers the poorest section a chance for upward socio-economic mobility. Migrating overseas for work is also seen as, in the eyes of the aspiring migrants, an enhancement of the status quo in their community. They aim to realise social, cultural, political, and economic gains from their overseas labour migration.

About 75% of the sample participants reported an increase in their standard of living, quality of consumption expenditure, affordability of better-quality of education and healthcare, and housing standards due to their work stint in the Gulf. Four interviewees reported purchasing agricultural lands while the remaining reported no change in their financial status. The majority of the migrants in the sample reported an enhanced social status in their community in the post migration period. However, this phenomenon can be attributed to the fact that Gulf migration has emerged as a status symoble in many migration source districts. Social and economic relations are formed on the basis of who has access to the Gulf labour market and who does not have such valuable access and the community of migrant families and socially related close non-migrant families who often aspire to join the Gulf in near future creates a new hierarchy that sometimes undermines traditional hierarchical order in the village society (Zachariah, Mathew, and Rajan 2001).

In general, the majority of the debts incurred by migrant families relate to consumption expenditures, including marriages, funerals, and health emergencies such as the pandemic. Low income earning families tend to resort to borrowings for such expenditures. Individuals seeking employment overseas are typically driven to do so by past accrued debts and a lack of stable income sources at home. During the interview, a returnee from Qatar related his first-time migration experience as follows:

In my family, I am the eldest brother with three younger brothers and two sisters. For my sister's wedding, my father took out a loan of two lakh rupees (nearly US$2,400). My father was a construction worker who passed away due to health problems. After my father, I was the only earning member of my family. Lenders used to ask for their money back. Due to the lack of a steady source of income at home, I looked for better employment opportunities in the Gulf region.’ (A migrant returnee from Qatar, age 34, Gamharia, Gopalganj, July 2022)

Labour diasporas remit a substantial portion of their earnings back home in order to support the left behind family members regularly. Migrant remittances are used by families for a variety of purposes, including acquiring better education and healthcare facilities, meeting daily consumption needs, purchasing durable consumer goods, and purchasing capital assets. Despite migrant indebtedness, two-thirds of participants reported that migration to the Gulf had improved families’ general well-being. Fifteen of the 60 migrants claimed to have built ‘pucca home’ (concrete-built home) and ten claimed to have added another floor to their existing concrete homes. A returnee narrated:

I worked for more than six years in the Gulf countries. When I migrated to Saudi Arabia for the first time, we did not have a pucca (concrete) home. With my savings and some borrowings, I built a concrete house in 2018 and added another floor to it in 2020. Now, my children attend a good English medium school in Gopalganj, the district town. Also, I assisted my brother in the opening of a ‘Kirana store’ (grocery shop) in my locality. (A returnee from Dubai, aged 34 years, Gamharia, Gopalganj, November 2022)

Seventy per cent of the respondents reported that they had purchased refrigerators, colour television sets, two-wheelers, and other necessary consumer durables. As a result of an improved standard of living, migrant families are able to enhance their social standing in their communities. This enhanced social status opens up a variety of other opportunities in the origin community such as marriageability of the family members and involvement in local politics. A total of 10 migrant families married off female members of their families, and 20% financially assisted friends and relatives to marry off female members of their families. Rahman, Yong and Ullah also report that migrant remittances are used to marry off marriage-aged female members in South Asia (Rahman, Yong, and Ullah 2014). Remittances had a considerable financial impact on consumption expenditures of migrant households, but less of an effect on capital acquisitions. Of a total of 60 migrants, four claimed to have purchased agricultural land, and two claimed to have purchased second-hand four-wheelers for business purposes. In addition, some participants reported that they had bought gold and silver jewelry for their wives. A returnee narrated:

I have worked in Gulf countries for more than a decade. I purchased a second-hand four-wheeler on loan in 2016 to operate as a taxi driver in the district town of Gopalganj. With the Almighty's blessings, our business has prospered. With the money we earned, we could pay off the initial debt and expand our fleet by adding another four-wheeler. My younger brother now looks after this taxi business. (A migrant returnee, aged 41 years, Basdila, Gopalganj, July 2022)

One of the benefits of Gulf migration that is hardly reported in existing literature but widely observed during our fieldwork is the use of social capital. Migration to the Gulf enhances the social capital of the migrant families. Non-migrant families tend to establish new relations with migrant families and maintain it for their mutual benefits. It is not only non-migrant families but also migrant families who tend to be more welcoming to another migrant families and care for one another when they are in need. Using their social networks, many migrants find jobs in the Gulf labour market for family members, friends, and relatives. Labour diasporas in the Gulf tend to utilise their social networks to borrow and to remit home whenever necessary. During the pandemic, such network-based assistance was vital. In our research, we found that migrants borrowed money from their friends and relatives in the Gulf to meet their daily expenses and serve their debt obligations back home. A migrant returnee narrated:

I had lost my job during the pandemic and was left stranded in Dubai because of travel restrictions. In the beginning of the lockdown, I could sustain myself with some money that I had with me. When the Vande Bharat Mission (VBM) was launched by the Indian government, I didn't even have enough money to purchase a flight home. Only with a friend’s assistance was I able to return back home. (A returnee, aged 30 years, Bhit Bherwa, Gopalganj, July 2022)

Labour migration to the Gulf for work does not simply mean obtaining a higher income than at home. The access to the Gulf labour market eases the acquisition of other resources, such as migration-specific social capital. Social capital is convertible to other forms of capital such as financial or cultural capital (Palloni et al. 2001). Because of the convertibility feature of social capital, labour diasporas are able to mobilise social capital to improve the livelihood of their families even at the time of crisis such as the COVID pandemic.

Concluding remarks

This study has attempted to provide fresh insights into the nature of labour migration from India to the Gulf countries. Labour migration from India to the GCC states have primarily been driven by an undying demand for low and semi-skilled workforce in the destination countries and lack of adequate income earning opportunities at home. Migrating overseas for work is seen as capability enhancement that enables better livelihood for the migrants and their families back home. Labour migration to the Gulf, however, is a costly undertaking. Migrants often borrow money from outside sources in order to cover exorbitant migration costs, resulting in debt accumulation. This study has demonstrated that migrants’ ability to accumulate capital is limited by the debts accumulated during the migration process. The service of debt obligations consumes a substantial portion of the remittances sent home. A positive relationship exists between the anticipated economic benefits of migration and the duration of the stay; the longer the stay, the greater the benefits. In the wake of the COVID pandemic, Indian labour diasporas were forced to return involuntarily, resulting in a reduction in the expected economic benefits of migration. Due to the unanticipated contingencies brought about by the pandemic, migrants were exposed to a great deal of precarity.

This research reports that the migrants from rural Bihar have attempted to diversify their labour resources by sending family members overseas for work and thus to secure livelihood for their families. Family income generation activities are now shifting beyond the national labour market as part of a transnational livelihood strategy, and more and more families are joining the Gulf labour market to earn their living from rural India. It has been found that the longer labour diasporas work in the Gulf labour market, the greater the benefits they receive from it. As a result, they tend to work for longer period with some regular intervals in the end of a job contract. The temporariness of their employment, however, necessarily means multiple episodes of relocation and remigration until retirement. The migrants continue to look for opportunities to bring their family members and relatives to the Gulf in an effort to diversify and reinforce their revenue streams even further. The fact that migrants keep on remigrating shows that they obviously view migration as a route to a desirable livelihood strategy, despite the many challenges it presents, such as high migration costs, precarious employment conditions, complex migration financing and so on. When unforeseen events such as pandemics delay or halt migration episodes and thus mount the debt burden on migrants, migrants nevertheless find ways to join in the Gulf labour market and erk out a transnational livelihood. While the issue of sustainable transnational livelihood remains open for further investigation, this study has indicated that Gulf migration remains a much sought-after livelihood strategy for the people in the migration source communities in Bihar.

Acknowledgements

Open Access funding provided by the Qatar National Library.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Pranav Raj

Pranav Raj is an Assistant Professor of Economics at MIE-SPPU Institute of Higher Education, Doha, Qatar. His research interests are aligned in the area of development economics, law and economics, and intersection of crime and migration.

Md Mizanur Rahman

Md Mizanur Rahman is a Research Associate Professor at the Gulf Studies Program and Center, College of Arts and Sciences, P.O. Box: 2713, Doha, Qatar. His research interests include migration studies and Gulf studies.

Notes

1 Ministry of External Affairs data obtained from Economic Survey of Bihar (2019–2020), published by the Finance Ministry of the Government of Bihar.

2 The average excludes the four migrant returnees whose travel was facilitated by their friends and relatives. The dollar equivalent of the amount is $846. For currency conversion, the rupee-dollar exchange rate on 25 May 2023, has been used. The exchange rate recorded on 25 May 2023, is INR 82.7164 per US Dollar.