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Speaker 1: I exam. I left Italy just when this crist's period started.

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Speaker 1: The woman I was taking care of god sick and

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Speaker 1: was taken to hospital. She eventually died from the coronavirus

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Speaker 1: and I didn't have anything to do learn anymore. They

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Speaker 1: tested me and I was negative. I left. Hello and

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Speaker 1: welcome to Stephanomics, the podcast that brings the COVID global

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Speaker 1: economy to you. And that was Mihaela Daniela, one of

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Speaker 1: hundreds of thousands of Romanians working abroad who've gone home

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Speaker 1: in the past few months. It's a reminder that stay

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Speaker 1: at home orders means something different if you're one and

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Speaker 1: more than a hundred and fifty million my group workers

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Speaker 1: around the world whose home and family might be a

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Speaker 1: long way away. There are another group at the sharp

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Speaker 1: end of this COVID crisis. The sectors they work in, hospitality, construction,

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Speaker 1: domestic service have been taking the brunt of the collapse

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Speaker 1: in the economy, and many, like Mikhaela, have headed for home.

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Speaker 1: Others stay in their adoptive countries but find themselves second

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Speaker 1: class citizens without access to government support and healthcare. Either way,

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Speaker 1: the COVID crisis for migrants is going to have big

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Speaker 1: economic effects for both their adopted country and the communities

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Speaker 1: they left behind. We're getting into a few different pieces

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Speaker 1: of that massive global story today. In Dubai in the

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Speaker 1: United Arab Emirates, the population could fall ten percent this

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Speaker 1: year due to expat workers heading home. I'll be talking

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Speaker 1: to Bloomberg's Middle East economy reporter Abir abu Omar about

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Speaker 1: what that means for the Gulf economies economic model, where

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Speaker 1: foreign workers do nearly all the work. We'll also talk

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Speaker 1: about whether the many migrants still stuck in Dubai without

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Speaker 1: work are getting any help from the government. Then our

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Speaker 1: head to Singapore to talk through the economics of global

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Speaker 1: migrant flows with Bloomberg opinion columnist Dan Moss, also what

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Speaker 1: it means for countries like the Philippines to have the

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Speaker 1: flow of earnings from migrant workers suddenly dry up. But

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Speaker 1: first let's hear a bit more about that Romanian story

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Speaker 1: from one of the people who helps run our economics

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Speaker 1: and government coverage in Central and Eastern Europe, Andrew Dagny. Andrew,

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Speaker 1: tell me a bit more about this story. How many

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Speaker 1: migrants are we talking about that have been going home

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Speaker 1: to Central and Eastern European countries. The countries we looked

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Speaker 1: at specifically for this story were Romania, Ukraine, Serbia, and

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Speaker 1: a little bit at Bulgaria. Romania had the biggest inflows.

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Speaker 1: About one point three million people came back Ukraine that

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Speaker 1: the numbers there have always been a little bit difficult

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Speaker 1: to calculate, but there are several hundred thousand probably in

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Speaker 1: Serbia were also talking a significant portion of the population.

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Speaker 1: I think, um six percent of the population, the fifth

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Speaker 1: of the workforce, about four thousand workers. Romania the populations

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Speaker 1: about twenty million people, so one point one point three

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Speaker 1: is obviously a significant addition to that. The Serbs were

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Speaker 1: even more that was that was six percent of the population.

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Speaker 1: So it's it's a lot of people. Let's hear a

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Speaker 1: bit more from Mihaila now, who was in Italy and

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Speaker 1: then has come has come home my whole thing. I'll

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Speaker 1: ever return because living among strangers is hard. After nine years,

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Speaker 1: my boys stayed with my mom all this time, and

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Speaker 1: this was the hardest thing I ever did, to live

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Speaker 1: far away from him. But we'll see what happens. It

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Speaker 1: would be great if I managed to stay. I need

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Speaker 1: to see if I managed to get a job here.

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Speaker 1: I hope I'll make it here in Romania. First of all,

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Speaker 1: we managed totally differently with the money I made in Italy.

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Speaker 1: My son now has a computer close. We managed to

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Speaker 1: renovate the house everything we need. I don't think I

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Speaker 1: would have managed to do all these things with the

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Speaker 1: salaries here. But we'll see. People say things have changed

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Speaker 1: in Romania as well. Let's see what happens in the

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Speaker 1: next few months. We wait for now. So she sounds

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Speaker 1: like she might stay home now. The government's happy to

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Speaker 1: have all of these people coming back, has been their attitude.

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Speaker 1: The circumstances are obviously not ideal. They would have preferred

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Speaker 1: these people if they were going to go abroad, that

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Speaker 1: they worked over there, they studied over there, and they

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Speaker 1: brought back the skills and education that they garnered in

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Speaker 1: Western Europe. But at the same time, they've been struggling,

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Speaker 1: like most of use in Europe, with acute labor shortages

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Speaker 1: for several years now. So these workers are are welcome.

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Speaker 1: For the short term they will they will obviously be

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Speaker 1: boosting the unemployment numbers due to the lockdown and the

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Speaker 1: extended effects of that. But once the economy start to

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Speaker 1: start to open up again and start to grow. Eastern

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Speaker 1: Europe has generally been a much faster growing region than

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Speaker 1: Western Europe. Then the government's hoped to harness these people

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Speaker 1: who have come back, or at least a share of them,

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Speaker 1: and use them to build future growth. And I guess

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Speaker 1: one of the big differences with this crisis is it

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Speaker 1: is affecting everywhere. I mean what we've seen in the past,

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Speaker 1: particularly in Europe actually, where countries have faced a deep recession.

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Speaker 1: I remember this and that the global financial crisis that

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Speaker 1: some of the countries in the in the Baltics saw

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Speaker 1: a massive outflow of workers when their economy shrank, which

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Speaker 1: helped sort of ease some of the burden on their economies.

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Speaker 1: If everyone is being hit now at the same time,

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Speaker 1: you're not going to get immigration as that kind of

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Speaker 1: safety valve. But I guess it's true. It seems to

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Speaker 1: be the case that these Central and Eastern European countries

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Speaker 1: so far have been hit less hard by COVID. Is

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Speaker 1: that right, Yes, that's also true. They were very fast

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Speaker 1: to lockdown and the that's only in terms of their

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Speaker 1: healthcare hit then it's been far, far, far less than

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Speaker 1: we saw in Western European countries. The economic hit is

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Speaker 1: in many cases similar. I think that the best performance

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Speaker 1: probably in the in the EU this year is going

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Speaker 1: to be the Polish contraction, which is I think to

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Speaker 1: be about between three and four percent. But obviously they're

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Speaker 1: all they're all taking a hit, yes, economically, and there's

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Speaker 1: going to be we're going to talk about this later

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Speaker 1: in the program, but there's a there's a there will

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Speaker 1: be a hole where all those remittances used to be.

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Speaker 1: I mean Mihailo and all the millions of people who

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Speaker 1: were in different parts of Western Europe sending back their salaries.

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Speaker 1: I mean that is an extra that is an extra

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Speaker 1: burden for these economies at a time when they are

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Speaker 1: dealing with a global recession, even if they're not facing

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Speaker 1: as much problem from COVID. Yes, that's also true. But

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Speaker 1: these governments are hoping that the flip side of the coin,

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Speaker 1: the the increased labor force and the increased ability to

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Speaker 1: generate economic output, is going to It's going to counter that.

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Speaker 1: Ukraine had a record remittances of twelve billion dollars in

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Speaker 1: two thousand nineteen, but it's also seen huge, huge outflows

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Speaker 1: of people who are I think more than a million

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Speaker 1: people alone in Poland and they've been a huge source

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Speaker 1: of labor for some of the Eastern European countries in

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Speaker 1: the European Union. Ukraine's looking to certainly utilize these people.

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Speaker 1: They have about three d thousands who returned during the lockdown.

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Speaker 1: They're looking at a pretty large scale road construction projects

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Speaker 1: and they're offering discounted loans also so they can start

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Speaker 1: their own businesses. Well, it is. It's a fascinating side

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Speaker 1: of this when we have all these discussions about deglobalization,

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Speaker 1: will people after this crisis be less inclined to send

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Speaker 1: production overseas while they start bringing jobs home? And actually

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Speaker 1: it's the people who are moving first. We have these

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Speaker 1: millions of people all coming home before we have a

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Speaker 1: change in the global economy necessarily, Andrew, thanks very much,

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Speaker 1: no problem than So that's one perspective on the global

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Speaker 1: migrant story. But now let's get a completely different angle

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Speaker 1: on this. Talking to our Middle East economy reporter into

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Speaker 1: I Abia abu Omar. Anyone who's been to Dubai or

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Speaker 1: other parts of the United Alberta Emirates knows these economies

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Speaker 1: are utterly dependent on migrant labor to build every apartment

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Speaker 1: block service every hotel room, but they don't. Those migrants,

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Speaker 1: they don't get really any rights in return, and if

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Speaker 1: they lose their jobs, they're supposed to go immediately home.

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Speaker 1: So what has been happening to them since the onset

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Speaker 1: of the COVID crisis? Hi, Stephanie, So yes, you're right.

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Speaker 1: I mean in Dubai, the foreign population, made up predominantly

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Speaker 1: from blue collar workers, makes up more than nine of

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Speaker 1: the city's population. Of that's a huge number. And then

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Speaker 1: the UAE in general more than eighty percent of the

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Speaker 1: population is made up of expats um. So since the

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Speaker 1: start of since the start of this outbreak, these people

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Speaker 1: have been suffering. These people have been asking to go

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Speaker 1: back home because in part because companies are laying off

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Speaker 1: people with absolutely no safety net in place. So when

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Speaker 1: we talk about what is different for these people, it's

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Speaker 1: the fact that in this part of the world, there

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Speaker 1: is no safety net. Uh, they don't get any kind

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Speaker 1: of residents, they don't get any kind of remittance after

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Speaker 1: they're laid off, and so the only expectation for them

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Speaker 1: is to go back home. Now, with with the flights

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Speaker 1: being suspended and with no option to go back home,

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Speaker 1: some of these people are living on as little as

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Speaker 1: two hundred dollars a month UM and waiting for you know,

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Speaker 1: charity charities to get to get back to them with

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Speaker 1: with food, especially now that we're in Ramadan, which is

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Speaker 1: a month where UH Muslims in the region fast UM.

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Speaker 1: So these people are just literally living by what they

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Speaker 1: can get day by day. And we've heard reports about

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Speaker 1: countries in Southeast Asia who are not even accepting UH

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Speaker 1: they're people back UM. Hundreds of thousands of India and

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Speaker 1: Pakistanian workers, which make up the majority of the expat

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Speaker 1: population here, have asked to go back home. UM and

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Speaker 1: India and Pakistan India mainly was saying that you know,

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Speaker 1: we we can't accept we can't accept our people at

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Speaker 1: this moment. Are we going to see just this big

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Speaker 1: change in the structure of the Gulf economy is coming

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Speaker 1: out of this if they if we don't know what

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Speaker 1: happens to these workers when this kind of crisis hit. Absolutely, absolutely,

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Speaker 1: I think so. And that trend has been on the

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Speaker 1: rise since the outbreak. UM gained momentum in the region.

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Speaker 1: You have a lot of big officials who weren't necessarily

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Speaker 1: as vocal before coming out and saying a population shrinkage

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Speaker 1: could have a devastating economic implication for Gulf countries that

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Speaker 1: are very much dependent on these expat workers. But when

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Speaker 1: you have an expat worker that you expect to work

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Speaker 1: and you don't and you don't necessarily provide um any

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Speaker 1: kind of stability, those people are going to leave. And

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Speaker 1: it's and it's not just blue collar workers. It's it's teachers,

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Speaker 1: it's engineers, it's it's businessmen who are thinking they can't

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Speaker 1: sustain this kind of living um if they're laid off.

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Speaker 1: And what's different about the model in the UAE or

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Speaker 1: in the Gulf in general, is that most of these

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Speaker 1: countries have taken a more monetary policy change, so there

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Speaker 1: has not been any kind of uh, direct fiscal um

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Speaker 1: spending for for these workers. So we don't see any

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Speaker 1: kind of wage guaranteeing, we don't see any kind of

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Speaker 1: fund that is dedicated for those people. Uh. The only

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Speaker 1: thing we're seeing is the central banks are are giving

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Speaker 1: lenders some kind of space to to ease their feast

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Speaker 1: is their interest rates, to to give better better interest

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Speaker 1: on loans. But that's not what the people are asking for,

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Speaker 1: and that's definitely not what the people who are going

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Speaker 1: to leave, are asking for people want direct measures that

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Speaker 1: help them during this time, and we're not seeing that

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Speaker 1: happening yet. And I've noticed that that the economies that

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Speaker 1: were always they're so dependent on the oil revenues and

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Speaker 1: we've seen obviously the collapse in the oil prices, and

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Speaker 1: so countries like Saudi Arabia this week actually announcing big

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Speaker 1: cuts and spending, which is the opposite of what everyone

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Speaker 1: else is doing, because they didn't save in the good

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Speaker 1: times when the oil price was was higher. And I

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Speaker 1: guess the short term question is just what is going

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Speaker 1: to happen to all these people. I mean, there's such

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Speaker 1: a large number of people who sound like they are

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Speaker 1: trapped in the region. And the support that government is offering.

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Speaker 1: I noticed when they are giving any help to workers

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Speaker 1: or companies, it's all for citizens, much more than for

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Speaker 1: for others. Are you starting to see these migrants on

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Speaker 1: the street, what's going to happen to them? What those

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Speaker 1: people want is some kind of direct measure that would

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Speaker 1: help them at least get by, get by on a

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Speaker 1: daily basis. I mean, a lot of people on social

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Speaker 1: media pages are becoming more vocal about their struggle. A

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Speaker 1: lot of people on um. I heard that a lot

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Speaker 1: of people on on Reddit, a very popular website in

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Speaker 1: the UAE, are asking for food and are asking for

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Speaker 1: a place to stay. And in this kind of environment,

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Speaker 1: you never saw, you never saw something like that happening before,

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Speaker 1: but it is happening now. And so no government wants

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Speaker 1: to see people coming out going out of their of

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Speaker 1: their countries. But it looks like the model that the

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Speaker 1: government here is taking is more is more like, yes,

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Speaker 1: we let those people leave. We won't compromise or sacrifice

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Speaker 1: the system that we've been going by since but for decades.

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Speaker 1: And if they leave after this ends, we'll just get

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Speaker 1: more people, which is which is a more costly process

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Speaker 1: and in more time consuming process. But it doesn't look

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Speaker 1: like they're going to change the way they're they're thinking now.

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Speaker 1: From what we're seeing now, I think that's that's fascinating.

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Speaker 1: And I see that our Middle East economists, the ad

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Speaker 1: OLD was talking about the population of Dubai falling by

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Speaker 1: at least ten percent this year just with those UM

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Speaker 1: migrants leaving. But you don't think it's going to change

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Speaker 1: anytime soon. Aber Abu emma Ama, thank you so much

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Speaker 1: for joining us. Thank you so I'd like to bring

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Speaker 1: all of this together now with Dan Boss, Bloomberg opinion

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Speaker 1: columnist covering Asian economies out of Singapore and Dan there

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Speaker 1: are obviously two sides to this migrant story. There's the

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Speaker 1: countries that depend on large amounts of migrant labor to

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Speaker 1: keep their economies functioning, and then there's the communities back

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Speaker 1: home that rely on the money those migrant workers send back.

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Speaker 1: You think the COVID crisis has kind of blown a

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Speaker 1: hole through both economic models. The export and import of

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Speaker 1: labor STEPH is one of the biggest casualties of the

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Speaker 1: COVID induced downturn. There's a lot of attention has been

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Speaker 1: given to what's happening to semiconductor sales, what's happening on

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Speaker 1: container ships. The export of people that allows many wealthy

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Speaker 1: countries to basically function is at risk. Let's take two

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Speaker 1: economies in Asia that are equally dependent on this transaction.

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Speaker 1: The seller of the labor, the Philippines, and the buyer

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Speaker 1: of the labor Singapore. About a third of Singapore's workforce

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Speaker 1: is comprised of foreigners. The bulk of those foreigners live

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Speaker 1: in purpose built dormitories where conditions are cramped and where

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Speaker 1: living conditions have been getting some scrutiny. These are the

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Speaker 1: folks that enable Singapore, famous for its efficiency and its

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Speaker 1: Swiss watch like economic life, to function. They drive the subways,

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Speaker 1: they deliver the mail, they build the buildings. So imported

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Speaker 1: labor makes Singapore Singapore. For the Philippines, it provides a

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Speaker 1: huge source of foreign revenue. It supplements the very very

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Speaker 1: basic and inadequate safety there that the government there has developed.

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Speaker 1: That broader model is at risk. You know, we obviously

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Speaker 1: have been talking in the developed economies about are we

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Speaker 1: now going to be more concerned about the rights for

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Speaker 1: gig worker as who have all been lost their jobs

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Speaker 1: and have lost their rights in in response to the crisis.

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Speaker 1: Do you think we'll see that kind of change in

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Speaker 1: the attitude towards migrant workers coming out of this. Well,

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Speaker 1: the model as it's currently been constructed is in jeopardy.

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Speaker 1: Some form of this model will survive, probably with some

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Speaker 1: shading around the edges. And that is because both the

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Speaker 1: vent or country and the purchase a company in many ways,

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Speaker 1: are equally dependent. You know, when I was in the

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Speaker 1: Philippines meeting families of foreign workers in January, you know, stuff.

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Speaker 1: They were all acutely aware of what the Saudi government

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Speaker 1: was up to in its efforts to reconfigure its economy.

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Speaker 1: They knew more about what was going on with the

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Speaker 1: oil price that week than I did. That's how big

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Speaker 1: the remittance thing is in their lives. The degree of

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Speaker 1: this may change, some of the contours may a time.

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Speaker 1: I feel like too many people are winning on either

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Speaker 1: side of this labor transaction for it to vantage. But

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Speaker 1: in order to keep those those migrant workers coming to

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Speaker 1: their economies, do you think the likes of Saudi Arabia

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Speaker 1: or indeed Singapore are going to have to rethink the

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Speaker 1: idea that the moment you lose your job, you're out.

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Speaker 1: Among the things that are going to have to be rethought,

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Speaker 1: how do these folks live and interact with the local

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Speaker 1: economies in their host nation. The majority of the surge

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Speaker 1: in infections that Singapore has seen have come from purpose

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Speaker 1: built dormitories where migrant workers who are employed in everything

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Speaker 1: from construction to food and beverage and other things live.

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Speaker 1: It's highly conceivable that these kind of cramped accommodations will

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Speaker 1: just go and it would be a condition of employment

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Speaker 1: that the quality of the housing be raised. You know,

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Speaker 1: if you're stuck in a place because you're quarantined, you've

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Speaker 1: kind of got the worst of all world. Staff. You

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Speaker 1: can't go home and get a job at home because

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Speaker 1: you can't leave. This is not specific to Singapore. Few

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Speaker 1: our lines are flying from anywhere right now. But because

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Speaker 1: of lockdown or circuit breaker conditions in the host country,

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Speaker 1: you're not on the job either. You're you're stuck. Sand

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Speaker 1: is in the gearbox of this critical component of the

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Speaker 1: global labor market. When you talk about countries like the

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Speaker 1: Philippines where ten percent of the population any given time

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Speaker 1: might be working abroad, do you think that's fundamentally distorted

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Speaker 1: the economy or started the way even the families work

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Speaker 1: in that country, having I know you've spent time there, Uh,

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Speaker 1: no question. In January, I went down to a community

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Speaker 1: in an area called lagoon Er. It's about two hours

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Speaker 1: drive south of Manila. One municipality had the nickname Little Italy.

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Speaker 1: Why because so many people had gone to Italy there

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Speaker 1: to find jobs. So, you know, I visited with an

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Speaker 1: NGO worker. You know a number of families and these

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Speaker 1: houses were quite nice. There were multiple generations living there

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Speaker 1: under the one roof people were quite candid this standard

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Speaker 1: of living would be inconceivable without the remittances coming in.

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Speaker 1: I spent some time with one person who was the

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Speaker 1: child of what the Filipinos called o FW's overseas Filipino workers,

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Speaker 1: absolutely ement that she and her husband, come hell or

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Speaker 1: high water, would not work in separate countries from each other.

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Speaker 1: Too much of the social fabric just gets afraid. And

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Speaker 1: you know, in times of downturn, someone who's working as

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Speaker 1: a made in Dubai or Hong Kong or Singapore might

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Speaker 1: be supporting an entire village, not just an extended family.

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Speaker 1: You know the problems which be set domestic arrangements in

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Speaker 1: the West. Families divorce, people become estranged from each other.

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Speaker 1: I mean, this is rife in the overseas worker community. Ironically,

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Speaker 1: an NGO who took me to some of these families,

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Speaker 1: her husband spent eighteen years doing construction in Saudi Arabia,

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Speaker 1: quite lucrative, supported the family. Just one problem, she found

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Speaker 1: out he had been unfaithful and that was the end

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Speaker 1: of that. Now, can all these things happen anywhere, any place,

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Speaker 1: any time? Sure? What's not true is that any place, anywhere,

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Speaker 1: any time an entire social fabric depends upon That's what's

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Speaker 1: at stake in domestic social and economic relationships in the

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Speaker 1: labor vend or country. Dan Bos, thank you very much.

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Speaker 1: Thank you, Steve, good to be here, Thanks for listening

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Speaker 1: to Stephanomics. We'll be back next week with more on

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Speaker 1: how COVID nineteen is turning the global economy upside down.

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Speaker 1: Remember you could always find us on the Bloomberg terminal, website, app,

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Speaker 1: or wherever you get your podcasts. For more news and

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Speaker 1: analysis from Bloomberg Economics, follow as Economics on Twitter. This

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Speaker 1: episode was produced by Magnus Hendrickson, with special thanks to

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Speaker 1: Mihaela Danela, Andrew Timu, Andrea Dodik, Andrew Langley, Abir Abu Omar,

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Speaker 1: and Dan Moss. Scott Lamm is the executive producer of

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Speaker 1: Stephanomics and the head of Bloomberg podcast is Francesco Levy

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Speaker 1: m H