It is believed that total remittances from the GCC stood at $79 billion (Dh290.5 billion) and $83 billion in 2012. This represents a marked increase compared to that of $70 billion remitted in 2011.
The development partly reflects sustained economic development of GCC countries backed by steady oil prices. Foreign workers are invited to fill a number of jobs traditionally shunned by locals notably in the construction and general services sectors.
Undoubtedly, value of the remittances is sizable by virtue of comprising more than 15 per cent of global outgoing remittances of $514 billion in 2012, a figure recently released by the World Bank. The same report suggests that worldwide remittances grew around 11 per cent in 2012; conversely, remittances from GCC countries grew by 13 per cent at the very least, certainly above the global average.
In fact, outgoing remittances represent around 6 per cent of GDP of GCC countries combined. By one account, GCC’s nominal GDP amounted to $1.35 trillion in 2012. Still, representation of remittances would be slightly higher with regards to real GDP, adjusted for inflation.
Reflecting its economic might, Saudi Arabia leads GCC countries in the value of remittances, purportedly amounting around $32 billion in 2012. As such, the kingdom conveniently accounts for more than one third of GCC remittances.
Worldwide, Saudi Arabia ranks the third or second only after the US with regards to size of the remitted amount. However, the kingdom ranks first with respect to economic significance of the remittances, accounting around 4.5 per cent of the GDP.
Suffice to say that Saudi Arabia alone is home some 9 million foreign nationals as workers and family members. The UAE follows suit with billions of dollars remitted annually by foreign workers and their dependents.
The World Bank report says India received some $69 billion worth of remittances in 2012, second to none. For their part, GCC countries are believed to have contributed around one third of this amount, clearly a sizable portion.
In a clear recognition, in March, Bahrain’s Crown Prince Salman Bin Hamad Al Khalifa visited the south Indian state of Kerala as part of a wider Asian tour. This very state was selected for being home to a sizable number of Indians working in Bahrain.
The statistics tell something about generosity of GCC economies to the world in general and Asia in particular. The majority of expatriates working and living in GCC countries come from India, Pakistan, Bangladesh, Indonesia and the Philippines.
Unfortunately, in the absence of a tax system it is not possible to gauge true significance of amount expatriates remit versus earned income. In reality, presence of foreign exchange houses throughout GCC cities suggests that there be a big enough market for money transfers, with some such offices operating seven days a week and long hours of work.
Undoubtedly, expatriates should have the freedom to remit money. In fact, many work in the regional countries in order to guarantee the financial wellbeing of their loved ones in their respective homes of origin.
Happily, no restrictions are placed whatsoever on repatriation of funds in any GCC state, a policy that should remain intact.
Nevertheless, it makes sense for GCC governments to adopt measures capable of encouraging foreign nationals to invest some of their earned funds in the local economies. Money spent and invested in local economies help enhancing the GDP growth rates.
Possibly a trade-off is occurring whereby nationals from Asia contribute towards regional economic development, with the favours returned in the form of remittances sent to home countries and hence make the phenomenon a win-win for both sides.
