While the reconstruction of war-ravaged Iraq is expected to brighten the overseas job prospects for Keralites, the latest move by Saudi Arabia to replace 1.3 million expatriate workers in 21 job categories with Saudi nationals has come as a severe jolt to the state.

A non-resident Keralite said the Arab nation's move is aimed at creating more jobs for locals in the due course. This has been reported by some Arabic newspapers on April 16, he added.

According to official estimates, currently there are around 2.5 million Keralites abroad, with 1.6 million  in the Middle East, of which 41.25 per cent work in Saudi Arabia. Remittances from the Middle East have powered the Kerala economy for three decades now.

In fact the state had to set up a separate department of non-resident Keralites affairs (NoRKA)and appoint a minister to look into their problems.

According to the Thiruvananthapuram-based Centre for Development Studies, Keralites working in the Middle East send back home about Rs 1,000 crore (Rs 10 billion) a month.

The loss of jobs for Keralites in Saudi Arabia will offset the employment gains accruing from the reconstruction of Iraq.

It is feared that the state will now have to gear up to meet the challenge of rehabilitating a large number of these Saudi returnees.

Elaborating on the decision of Saudi Arabia, a NoRKA official said the Saudi government has proposed gradual replacement of expatriate workers employed in 21 sectors over three years.

The sectors, where the expatriates will be replaced include construction materials, mobile phones, auto spare parts, furniture, electrical and household appliances, tailoring, readymade garments, toys manufacturing, bookstores and stationery, footwear, perfumes, car decoration, paints, sheep and frozen chicken as well as shops renting materials for special ceremonies

As per the legislation, every employer, in these specified sectors, has to appoint at least one Saudi in the first year.