Remittances from Gulf soar to $100 billion
Indians in the UAE top the league with $12.638 billion in remittances; remittances from Saudi grow to $44 billion followed by USE with $29 billion.
Dubai — Indians in the UAE headed the top league of nationalities in the Gulf by sending a whopping $12.638 billion in remittances to their home country last year, while Pakistanis came in second with $4.151 billion and Filipinos a close third with $3.457 billion.
According to a report by Kuwait Financial Centre (Markaz), foreigners working in the Arabian Gulf sent more than $100 billion in remittances, which are estimated at 6.2 per cent of the combined GDP of the six GCC states of $1.6 trillion.
Raghu Mandagoathur, head of economic research at Markaz, said this figure was twice as high as remittances in 2010, implying steady and strong growth.
In comparison with the GCC countries, foreigners in the United States and Britain sent home just 0.7 per cent and 0.8 per cent of GDP, respectively, the report said.
While Indians in the UAE were also top remitters in the world, their counterparts in the United States came close with a 11.177 billion bill.
Saudi Arabia topped the GCC list with around 10 million expats sending home $44 billion, followed by the UAE with $29 billion.
In Saudi Arabia, Indians headed the table with around 2.8 million workers sending $10.836 billion, while Egyptians came in second with $7.573 billion. Pakistanis were third with $4.489 billion, followed by Bangladeshis with $3.785 billion, Indonesians with $3.281 billion and Filipinos with $3.235 billion.
In the UAE, the eight-member league of countries — India, Egypt, Pakistan, Bangladesh, Indonesia, Philippines, Sri Lanka and Yemen — together accounted for $26.607 billion of the total remittance of $29.253 billion.
Remittances from Kuwait and Qatar were $12 billion and $9.5 billion, respectively, while smaller transfers were made out of Oman and Bahrain, the report said.
Around 25 million expats live in the Gulf Cooperation Council states — almost equal to the native population.
Worldwide, India topped the table in terms of net inflow of remittance, even outsmarting China, though India’s diaspora is only half that of China, said Markaz’s Raghu.
As per IMF data, India received a net flow of nearly $63 billion in 2014 while China received $61 billion. India’s net flow accounts for 3.1 per cent of its GDP while for China it is 0.6 per cent.
India’s 24 million diaspora population is mostly concentrated in Asia (11 million), Americas (5 million), Middle East (4.2 million), Africa (2.8 million), Europe (1.8 million) and Oceania (1 million). Together they remit $63 billion with contributions from Middle East ($37 billion), Americas ($14 billion), Asia ($10 billion), Europe ($5 billion), Oceania ($2 billion) and Africa ($0.3 billion).
Raghu said the highlight of this structure is clearly the Middle East that accounts for 17.5 per cent of the Indian diaspora population, but account for nearly 60 per cent of total remittances.
On the other hand, he said, the Chinese diaspora is twice that of India at 50 million, mostly concentrated in Asia (27 million), Americas (8 million), Europe (2.3 million), Oceania (1.1 million) and Africa (1 million) with a insignificant presence in the Middle East. The $61 billion net inflow of remittances to China comes predominantly from Asia ($32 billion) and Americas ($21 billion), with the rest having minor contributions.
The report advised GCC states to encourage expatriates to invest by launching specialised services and opening up their markets to foreign residents, especially the real estate sector.
“Real estate is a great example of an untapped opportunity. Investment by expatriates should be differentiated from foreign investment, as the former provides a more stable source of investment given the length of time they spend in the region. The toughest obstacle would be reaching out to low-wage workers, who constitute the bulk of remittance. An employer engagement strategy (similar to 401k) can be implemented to tap into this segment,” the report said.
Areas like healthcare and education should also be elevated to best in class, so that expats are motivated to bring and live with their families, it added.
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