Business | Opinion
Expats must be encouraged to invest their earnings in the region
According to a World Bank report, migrants constitute an extraordinary share of population in Gulf Cooperation Council (GCC) countries.
- By Dr Jasim Ali, Special to Gulf News
- Published: 00:02 September 14, 2008
According to a World Bank report, migrants constitute an extraordinary share of population in Gulf Cooperation Council (GCC) countries. The migrants (workers and their dependents) comprise 78 per cent, 71 per cent, 62 per cent and 41 per cent of population in Qatar, the UAE, Kuwait and Bahrain, respectively.
At any rate, the World Bank report confirms that GCC countries have amongst the highest number of migrants as a share of population in the world.
The migrants comprise majority of population in half of GCC states and possibly more in the not too distant future. Newly released statistics show that foreign nationals make up 49 per cent of total population in Bahrain.
Certainly, it is all but normal for foreign nationals to comprise majority of population in any country. Yet, in the case of GCC, the phenomenon relates to sharp economic growth rates registered over the past few years on the back of firm oil prices.
The stronger oil revenues and hence spending paved the way for attracting more foreign workers. To be sure, migrant workers constitute the majority of total workforce in Qatar, the UAE and Kuwait considerably more compared to population figures.
The World Bank report, entitled Revisions to Remittances Trends 2007 puts the total figure of remittances at $337 billion, (Dh1.24tr) showing growth of 11 per cent.
For themselves, developing countries attracted a hefty $251 billion or 75 per cent of remittances amount. India is the largest recipient of remittances by virtue of attracting $27 billion last year.
According to the report, outbound remittances from the six-nation GCC amounted to $28 billion in 2007, up by 2 per cent. The World Bank report accounts for money sent through normal channels. Thus, the figures do not include cash amount that foreign workers take with them upon departure.
In the absence of a tax system, it is not possible to gauge the significance of amount expatriates remit versus earned income. However, the presence of foreign exchange houses and offices of wire services throughout GCC cities suggests that there be a big enough market for money transfers. Some such offices open seven days a week.
Undoubtedly, expatriates should have the freedom to remit money. In fact, many work in the regional countries in order to guarantee the financial well-being of their loved ones in their respective countries. There are no restrictions whatsoever on repatriation of funds in any GCC state, as part of a conscious economic policy.
Yet, GCC governments need to adopt measures capable of encouraging foreign nationals to invest some of their earned funds in places where they work. Money spent and invested in local economies help to enhance the gross domestic product (GDP).
In turn, stronger GDP growth rates can assist in addressing economic challenges notably creating employment opportunities for locals entering the job market.
GCC states need to provide foreign workers attractive investment opportunities. Already, some GCC governments, particularly Dubai and Bahrain, are providing foreign nationals the opportunity to own property.
Not long ago, Bahrain issued a decree granting expatriates the right to own property throughout the island. In the past, foreign nationals could only own property in certain areas such as business districts.
Undoubtedly, Bahrain has moved to remove restrictions as part of efforts to woe investments, and accordingly strengthen economic activity in the country.
Increasingly, GCC countries are allowing other nationalities the right to trade in the stock markets. Saudi Arabia is the last country to join the bandwagon.
The writer is a Memberof Parliament in Bahrain.
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