Saudi economists say remittances to fall to $23bn per year after 1m expats flee under amnesty
The value of remittances sent from Saudi Arabia will fall by SR25bn ($6.7bn) a year due to the kingdom’s crackdown on illegal workers, according to economists.
More than SR120bn left the country last year but that is expected to fall to SR95bn, banker Fadl Abu Ainain told local media.
Most of the money will remain in the kingdom due to measures taken to close down black market businesses, which were mostly operated by illegal foreigners who sent majority of their income home.
Abu Ainain said about one-third of all small and medium enterprises had been shutdown during the crackdown but a small percentage had reopened under sponsorship of a local. The sponsorship would ensure a significant amount of the business’ income remained in the country.
There also would be less remittances after 1 million foreign workers left the kingdom during a six-month amnesty that ended on Sunday.
Some business executives have complained that the amnesty was too sudden and did not allow the kingdom to prepare for the sudden outflow of workers, who were mostly of Asian origin and willing to work in menial jobs for low wages.
Remittances from Gulf countries are among the highest in the world due to expats accounting for significant proportions of the population.
A recent World Bank report said about 12 percent of all global remittances, a total of more than $61bn, came from the six GCC countries in 2012, with nearly half of this going to India.
The UAE is considering introducing a tax on remittances to force expatriates to contribute more to the local economy.
Dubai Chamber of Commerce and Industry president and CEO Hamad Buamim told Arabian Business in September the UAE government was considering a proposal and seeking feedback from relevant organisations such as banks and financial institutions.