Expats in Saudi Arabia sent home $44 billion

Saudi Gazette of 9 June 2015 informed that expatriate workers in Saudi Arabia (KSA) transferred some $44 billion last year, according to an economic report published early the same day.

GCC bank notes

GCC bank notes

In effect, the Kingdom of Saudi Arabia (KSA) topped the list of the six-nation Gulf Cooperation Council (GCC) from where foreigners sent last year more than $100 billion in remittances to their home countries.

It is to be noted that this figure is twice that of 2010; and it is to be taken like a demonstrative indication of the exceptionally strong growth over the same period.

The United Arab Emirates (UAE) came second on the list with $29 billion followed by Kuwait and Qatar with $12 billion and $9.5 billion, respectively.  Oman and Bahrain made smaller transfers, the report said.

The remittances are per IMF and World Bank figures, estimated at 6.2% of the combined GDP of the six GCC states of $1.6 trillion, adding that in comparison, foreign workers in the US and the UK sent home no more 0.7% and 0.8% of the respective GDPs.

The majority of Gulf expatriates come from India, the Philippines, Bangladesh and Pakistan, as well as Indonesia, Sri Lanka, Egypt and Yemen.  They number over 25 million.

The report attributed the high level of remittances to curbs applied by GCC states on foreign ownership and investment.

Foreign workers have, unlike anywhere in the world, no hope of acquiring citizenship in the GCC countries regardless of their length of residence where the expatriate workers as “Residents” equal in numbers the “Nationals” local population.

The report advised GCC states to encourage expatriates to invest by launching specialized services and opening up their markets to residents, especially in the real estate sector.

Saudi Arabia has taken steps in this direction.

A major one is perhaps the scheduled opening of the $590 billion stock market to foreign investors next week.  Under the new rules of investment in the country’s institutions, qualified foreign investors (QFIs) with at least $5bn in assets under management and a five-year investment record will be able to buy up to 10% of the shares of any listed Saudi company.