Oil, Dubai and India

Sunny, Sandy Dubai

Dubai – the modern El dorado?

In the last 40 years, Dubai and Middle East oil had interesting effects in India.

After the 1973 Oil Embargo, the oil riches, the glitzy infrastructure boom of the Middle East, new found power had a profound effect in India. It also made the Indian Muslim proud about his religious identity. The Bombay High oil find just about saved the Indian economy – and the Indian mental equilibrium. For the general Indian, the Middle East was the answer to the slow Indian economy. In an economy of shortages, an over-valued Indian currency, the Dubai allure was irresistible. It was the passport to wealth and abundance.

A voyage of 50 years

It took another 10-15 years for Indians to discover the underbelly of Dubai. To an average Indian, the prospect of slow career growth in Dubai, limited growth opportunities, the discrimination between the Western expatriates and Indians (and others) had a telling – and chilling effect. The Indian-Muslim, expecting a warm welcome in sandy climes, found a sneer instead.

As the Indian economy started taking off in the 1980’s – starting with consumer electronics and auto-sector de-licensing, Indians found a new modus vivendi with Dubai and himself. The nineties saw this trend only become more pronounced. The Arab ‘sheikh’ marrying poor girls from Hyderabad peaked during this period.

Oil wells that don’t end well

By 2000, India had arrived – and it was apparent to Indians, at least. In the last 10 years, as Saudi debt ballooned, Dubai’s problems also became apparent. Just as it was apparent, and Quicktake pointed more than 1 year ago, that wheels are coming off Dubai. Saudi Arabia started accessing debt in 1980’s due to low oil prices – to pay the bill for a ‘welfare state’! Since then that debt has been reduced significantly – it still stands at US$62 billion.

Most oil producing countries, are now living at the edge. As India’s new oil discoveries come on line from 2009, China’s post-Olympics appetite for oil reduces, a recessionary US cuts down on oil consumption, a stagnant EU damps on oil – what happens to these oil producing countries!!

With the dollar hegemony at risk, what happens to their dollar reserves?

Arab sheikhs cant get poor girls from Hyderabad any more

The global liquidity boom saw the Indian economy offer more domestic opportunities. India’s software successes gave the Indian expat manager in the Middle East some new found respect. The Arab ‘sheikh’ is not the frequent sight in Hyderabad now – nor is he as important, as then.

The Indian Muslim in the meantime, has also come a full circle. From the colonial-era myth of ‘Muslims were the erstwhile rulers of India’, to a situation where (admittedly, the few) Jinnah’s ideological acolytes in India, in the face of a imploding Pakistan, an anti-Islamic West and declining Middle East have had to perforce admit, what Deoband mainatained is that

for Muslims, there is no better country than India, no country in which Muslims are doing as well as they are doing in India. Our complaints, our objections, our problems exist, and we will continue to fight our fight for justice, but in other countries the situation is much worse.

I sometimes wonder, how a very well-to-do, urbane, Hyderabadi Muslim, I know, who thought he was a Muslim first, an admirer of the West next and India is the worst place on Earth till the 80’s, thinks now.

But for most other Indian Muslims, the Middle East sheen, by this time, has worn off. Increasing incomes in India and stagnant incomes in the Middle East- and the circle is complete.

  1. December 17, 2009 at 4:23 pm

    Here’s an interesting article about how oil money was flowing into Mumbai.

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