Expat remittances plunge as ratio of Saudi GDP

Riyadh: Saudi Arabia has succeeded in cutting the ratio of expatriate remittances to its Gross Domestic product (GDP) by 50 per cent in 15 years, an Arab Monetary Fund (AMF) report said.

Expatriate remittances as a ratio of Saudi GDP have decreased from 9.6 per cent in 1990 to 5.4 per cent in 2005, the report added.

The kingdom is the second largest source of remittances worldwide after the United States and accounts for an estimated annual outflow of $16.2 billion, according to a report by the World Bank.

The report named four other Arab countries - the UAE, Lebanon, Kuwait and Qatar - as being among the 20 leading countries in terms of expatriate remittances. The share of the four Arab states touched $13 billion.

There were seven million expatriates in Saudi Arabia, about one-third of the total population, according to 2003 statistics.

In 2004, the Statistics Department of the Ministry of Economy and Planning reported that non-Saudis accounted for 67 per cent of the kingdom's labour force.

Total remittances of Arab expatriates working in the Gulf and elsewhere rose 5.2 per cent to $24.7 billion in 2006 from $23.5 billion in 2005, according to the World Bank report.

Among Arab countries, Lebanon is the largest recipient of remittances with an estimated 2006 figure of $5.2 billion, followed by Morocco ($5.1 billion), Egypt ($3.3 billion) and Jordan ($2.8 billion).

These figures take into account only remittances sent home through formal channels, mainly banks, while informal channels are equally important and if accounted for could well increase total remittances by 50 per cent.

Over the last decade, the Saudi government has prioritised "Saudisation," an initiative that aims to increase Saudi national employment in all sectors of the domestic economy, reduce dependence on foreign workers, and recapture and reinvest income that would have otherwise flowed overseas as remittances.

Between 1993 and 2002 expatriates remitted 585.4 billion Saudi riyals ($156.1 billion), averaging roughly 60 billion riyals ($15 billion) a year.