By Vivienne Walt ~ DUBAI and MANAMA 

It was the birth of his second daughter that finally forced Raju Singh’s decision to leave home. The stonemason borrowed about $2,500 from a labor recruiter in his village in Rajasthan to pay for an air ticket to a place that seemed sure to provide a secure future — Dubai. Weeks later Singh was gawking out of an airplane window at towering skyscrapers that stretched for miles into the desert. “I had seen people come back from here and build houses in Rajasthan,” he recalls. “I said: ‘I can do the same.'”

Three years on, his dream seems as elusive as a desert mirage. For sure, Singh, now 27, has built houses since he arrived in the Gulf — mansions on Palm Jumeirah, a man-made island shaped like a gargantuan palm tree that is set in the pale waters off the coast of Dubai. But the contrast between the sumptuous world Singh is helping to create and his own hardships could scarcely be more jolting. He has yet to lay the first brick on his house in India. In February he finally paid off his debts to the labor recruiter in Rajasthan, including 42% interest on the loan. Sitting in a labor camp in the sprawling workers’ district of Sonapur outside Dubai, Singh says he now spends most of his monthly income of about $190 feeding himself, rather than his wife and two small children back home. Six days a week he wakes at 4 a.m. to travel to the building site, where he begins his 11-hour day at 6.30 a.m. At sunset he sinks exhausted onto his bunk bed in the room he shares with seven other men — miles from the neon lights that bathe Dubai’s night sky in a metallic sheen. “We are building villas which cost 18 million dirhams [$ 4.9 million],” says Singh. “We should at least get something from this. But we are getting nothing.”

That bitterness reflects a problem that has gained intense urgency across the Gulf in recent months. The challenge: to sustain the region’s spectacular boom while calming volatile labor protests and avoiding deep social disruption in the most peaceful part of the Middle East. The Gulf’s dazzling new architecture, sleek airports and high-speed freeways have all exacted their human cost, producing another kind of gulf — a social and economic one dividing the rich élite from the ill-paid workers whose labors have made the region’s transformation a reality. About 17 million migrants — most of them from South Asia, including some 4.5 million from India alone — now work in the Gulf, typically as construction workers on the grandiose projects that have proliferated as the region’s oil and gas revenues have soared. The Gulf’s new wealth has also brought in hundreds of thousands of housemaids — many from Asia but increasingly from Africa too — who work largely behind closed doors, invisible to outsiders. More than a third of the Gulf’s 37 million residents are foreign, and in the United Arab Emirates just 17% of the population are locals.

The Gulf is so dependent on the labor of these low-paid immigrants that the boom might have been impossible without them. “If they decided to go work elsewhere,” says Nabeel Rajab, a Bahrain contractor and human-rights activist, “the economies of the Gulf countries would collapse.” Until recently, such fears might have seemed far-fetched. Gulf citizens and foreign workers have coexisted for years in a relationship of untroubled interdependence. But lately, migrants’ frustrations over low wages have turned to fury. At great risk, tens of thousands of them have protested since late last year. Thousands of these protesters have been deported and ordered not to return. Last Febuary a Dubai court handed out six-month jail terms, followed by deportation orders, to 45 Indian construction workers for violence during a strike. In October, thousands of construction workers in Dubai’s Jebel Ali free-trade zone smashed police cars and blocked traffic. Within weeks, about 40,000 migrants in Dubai had staged strikes to demand pay raises, including for work building Burj Dubai, the world’s tallest skyscraper. In Bahrain in February, 1,400 workers building a luxury housing complex went on strike demanding a minimum wage of about $265 a month. And in March, hundreds of workers clambered atop building sites in the emirate of Sharjah and hurled bricks at police officers below.

A Combustible Mix

So far, the protests have drawn in just a small fraction of the millions of workers. But political analysts warn that they could spread quickly, fueled by events far beyond the region — and beyond the control of Gulf officials. As the value of the dollar has plunged over the last year, workers in the Gulf states — whose economies are pegged to the U.S. currency — have found their wages worth ever-shrinking amounts back home. If the dollar’s fall continues and real wages slip further, the workers’ anger is liable to combust.

“There is no guarantee that the majority will stay peaceful and calm,” says Mohammed al-Roken, a lawyer and human-rights advocate in Dubai, who is a strong critic of the U.A.E. government. “There is a fear among citizens that someday this could all explode in violence.” Shut off from the Gulf’s booming cities in closed labor camps, the slow boil of migrant disaffection continues out of sight of locals and visitors. The gates and high walls of the labor camps — built and monitored by the workers’ employers and guarded by their security men — are designed to seal off the camps from outsiders. When TIME ventured into labor camps in Dubai and Bahrain in March and April, dodging security guards and police patrols, the misery quickly became clear. Dubai’s huge influx of migrants has created entire all-male, all-foreign districts within its borders. The biggest is Sonapur, about a half-hour drive into the desert from downtown Dubai. Here, hundreds of thousands of workers — including Singh, the Rajasthani mason — live in hundreds of concrete buildings with small windows. Piles of garbage sit amid the dirt tracks, and there are fetid puddles of raw sewage from leaking pipes. On Fridays, the workers’ one day off, patches of open ground are turned into makeshift cricket pitches — about the only entertainment available.

Elsewhere in the Gulf, conditions are little better. Behind a high wall in Bahrain’s capital, Manama, about 300 workers live in a row of small concrete rooms, each of which houses eight men who sleep on bunk beds. By noon in late March the temperature in the labor camp is a blistering 35°C (94°F). Yet there is no running water, so the men must buy their own, paying 25¢ per bucket. “Water is one of the most expensive items,” says Sohel Sahid Ulla, 25, a carpenter from Bangladesh who earns $185 a month revamping Manama’s sewage system. Still, he expects to stay in Bahrain for the foreseeable future, not least because it will take him a year to pay off his debt of about $1,500 to the labor recruiter in Bangladesh who financed his visa and air ticket.

Crippling debts like these lock workers into contracts that roll over year after year while they scrape together savings to repay the creditors who helped them get hired. In Sharjah, the third largest emirate in the U.A.E., Banwari Lal Baiwara, 32, lived with no water or electricity for months after his sponsor declared bankruptcy in 2004, leaving workers with no source of support — not even to take a plane home.

He and scores of other discarded employees walked several miles to court every few days to demand their back pay of about $2,450 each. Only after Human Rights Watch intervened in 2006 was the money paid.

Baiwara returned home, but within months he was back in Dubai, working on another huge development. Now he is saddled with two debts to recruiters — one from each stint in Dubai — that amount to a crushing $5,000. “I thought I would never come back to the Gulf,” he says. “But I could not find enough work back home.”

Grim as the labor camps are, conditions can be even worse for the migrant housemaids hired to work in Gulf homes. In the back of a half-constructed apartment building in Manama, 10 women live in a shelter for migrant housemaids who have fled their employers. One of them, a 23-year-old Sri Lankan, says she was beaten repeatedly by her former employer and fed just one bowl of rice a day; she finally ran barefoot from the house, and was taken to the Indian embassy by a nearby store owner. After six months of working in Bahrain she had sent less than $120 back to her family, and was about to be deported to Sri Lanka since she no longer had a job.

Indeed, workers in Bahrain who leave their employers — even when running for their lives — are “branded runaways, which is a crime in Bahrain,” says Marietta Dias, who heads the action committee of the Migrant Workers Protection Society, a local NGO. The island’s Indian ambassador, Balkrishna Shetty, says he hears countless tales of misery from migrants: “This is the most stressful job I have had. Sometimes I feel so, so sad.”

Bracing for Trouble

Yet despite the back-breaking work, low pay and prisonlike housing, flights to Dubai, Manama, Abu Dhabi and other Gulf cities are still packed daily with thousands of migrants who arrive on three-year labor contracts. For South Asian economies their earnings — however small — are crucial; last year India’s remittances from the Gulf were about $12.15 billion. In parts of Punjab in northwestern India almost every family has a man working in the Gulf. “Many villagers think it is better to pawn property, land or jewelry to pay an agent 1 lakh rupees [$ 2,560] to get a job abroad,” says Sumit Pal Singh, who runs a labor-recruiting agency in the Punjab town of Jalandhar, and sends more than 60 men to the Gulf each month. Many Indians find good work there, says Singh, but others fall victim to less scrupulous recruiters. “Often, agents run away with their money and passports without taking them abroad,” he says. “Others get them work in shady organizations where they are ill-paid and ill-treated. In both cases, they are hard-pressed to pay back their loans.”

For many migrants, the rewards prove to be small, even after many years of grinding labor. Mohammed Hussein, a 30-year-old builder from Hyderabad who lives in Sonapur, says it has taken him 10 years in the Gulf to send home just $7,500. But the fact that the Gulf still draws millions of foreign laborers is a measure of the poverty they hope to escape. “In the next 10 years I expect expatriates [in the Gulf] to reach 30 million,” says Bahrain’s Labor Minister, Majeed al-Alawi. The flood of migrants is so relentless, he asserts, that if they settle in the Gulf permanently, “we will be finished as Arabs.”

These days, Alawi has more urgent worries. Bahrain faces serious labor shortages, especially for skilled workers. That’s likely to worsen as India’s economy continues to boom, potentially luring home many angry workers from the Gulf. In February, hundreds of migrants in Bahrain were locked in the labor camps after planning a protest march to Alawi’s office. That incident blew over within days, but Alawi is bracing for a rash of explosive protests unless changes are made. Since last year, Gulf and Asian officials have attempted to thrash out new working conditions for migrants. Alawi says he is determined to levy onerousfines this summer against companies that compel migrants to work on construction sites during the searing afternoon hours — a violation of new laws in both Bahrain and Dubai. Alawi, who lived in the U.K. for several years, says he would have been “very unhappy” if British companies treated him the way most migrants are treated by their Gulf employers.

Starting in July, he plans to end the long-held practice of “sponsorship” — common throughout the Gulf — whereby workers cannot switch jobs, since their visas tie them to a specific employer. Alawi also wants to crack down on South Asian labor recruiters, whom he calls “the Mafia.” India, meanwhile, is planning a new legal-advice center in Dubai to help its citizens abroad.

Those changes might ameliorate labor tensions. But low pay — not hot summers or controlling sponsors —remains the workers’ most bitter source of anger. The protests of the past few months have won small pay raises in Dubai, while migrants in Bahrain say their wages have also increased since the recent strikes, rising in some cases from around $145 a month to $185. Still, that’s a mere fraction of the roughly $530 minimum that the government is considering for Bahraini citizens. “Contractors are all aware that they have to be more compassionate,” says Indian ambassador Shetty — and with the Gulf awash in profits from $120-a-barrel oil, “it is not as if they can’t afford it.” Faced with the threat of further protests, employers might well be coaxed into offering higher pay as a matter of enlightened self-interest. Maybe then Raju Singh will finally get his house in Rajasthan.

Read this story on  TIME Magazine.