By Courtney Trenwith
Gulf states are among the best countries in the world for sending cash overseas
The United Arab Emirates is one of the cheapest places in the world from which to send remittances to foreign countries, according to the World Bank.
Migrant workers in Saudi Arabia also pay among the lowest fees to transfer money home, with the entire Gulf region highlighted as the best globally, despite costs rising last year.
“Whilst the costs in these markets can vary from month to month, their competitiveness in comparison to other sending markets in the sample reflects the fact that the Gulf region is amongst the cheapest for remittances globally thanks to the high level of competition achieved in these markets,” a World Bank statement said.
South Asia is the cheapest region to send money to, with an average of 6.54 percent.
About 80 percent of the UAE’s population of an estimated 8.3m people are expats, of which a significant portion send remittances to family in countries such as India, Pakistan, Sri Lanka and the Philippines.
According to the World Bank, sending remittances from the UAE to Pakistan (an average 4.92 percent of the money transferred) is the cheapest corridor in the world, while the UAE to Sri Lanka (6.35 percent) is the fifth cheapest.
Saudi Arabia to Pakistan (5.63 percent) and Yemen (5.92 percent) are the third and fourth least expensive corridors, considering the transaction fee and exchange rate margin.
To send US$200 from the UAE to India – where a significant chunk of the nation’s earnings are sent – costs an average 5.02 percent, while it can be as cheap as 2-3 percent depending on the bank used.
It will cost an average 5.63 percent to send US$200 in remittances to Nepal, 3.18 percent to Sri Lanka, 3.23 percent to the Philippines, 4.06 percent to Egypt, 2.46 percent to Pakistan.
Charges will differ according to the amount sent. For example, the cost falls to 2.81 percent to send US$500 to India.
Saudi Arabia’s cheapest destination countries to send US$200 are Pakistan (2.82 percent), Yemen (2.96 percent), Nepal (4.32 percent), Jordan (4.37 percent), India (4.4 percent), Egypt (4.62 percent) and the Philippines (5.34 percent).
The global average remittance costs are 8.96 percent, according to the World Bank.
Sub-Saharan Africa is the most expensive region to send money to, with average remittance costs reaching 12.4 percent in 2012.
The average cost of sending money to Africa is almost 12 percent higher than the global average and almost double the cost of sending money to South Asia.
The World Bank is aiming to bring down the cost of sending remittances to an average 5 percent by 2014.
It says that would put billions of dollars back into the pockets of poor families, rather than into the coffers of already rich banks.
“Remittances play a critical role in helping households address immediate needs and also invest in the future, so bringing down remittance prices will have a significant impact on poverty,” director of the World Bank's Africa Region and Financial Inclusion and Infrastructure Global Practice, Gaiv Tata, said.