Friday, Dec 02, 2011
Gulf News
Dubai Money flows to the Middle East and Africa were affected by the Arab Spring, the World Bank has said.
The flow of remittances in the Arab world is a ‘two-way’ sword. While oil-rich Gulf states including Saudi Arabia, UAE, Qatar, Bahrain, Oman and Kuwait and Iraq and Libya are the largest hosts of migrant workers — thus the largest sources of outflow — the majority of Arab countries, such as Egypt, Jordan, Palestine, Yemen, Syria and Lebanon are also recipients of remittances.
However, the Arab Spring has negatively affected remittances to and from Libya, Egypt, Tunisia, Yemen and Syria — which has witnessed a decline in the value of its currency due to economic sanctions imposed this week. “The Middle East and North Africa, affected by civil conflict and unrest related to the Arab Spring, registered the slowest growth (2.6 per cent) among developing regions,” the World Bank said.
Cushion
High oil prices have helped provide a cushion for remittances to Central Asia from Russia and to South and East Asia from the Gulf Cooperation Council (GCC) countries. Also, a depreciation of currencies of some large migrant-exporting countries (including Mexico, India and Bangladesh) created additional incentives for remittances as goods and services in these countries became cheaper in US dollar terms.
“Oil-driven economic activities and increased spending on infrastructure development are making these destinations attractive for migrants from developing countries.
Remittances from the GCC countries to Bangladesh and Pakistan (where the GCC countries account for 60 per cent or more of remittance inflows) grew by 8 per cent and 31 per cent respectively in the first three quarters of 2011 on a year-on-year basis,” it said.
Strong growth
“As a result of the increased demand for migrant workers, migrant deployments from Bangladesh grew strongly, by 37 per cent, in the first three quarters of 2011 [after a 20 per cent decline the previous year].
“Remittances also grew in double digits during this period, but this growth appears to have decelerated after the Eid Al Fitr festivities in August, but from a high base.”
Some GCC countries are considering tighter quotas for migrant workers to protect jobs for their own citizens, it said. The World Bank has cautioned the Gulf countries against imposing of tighter quotas.
“Such policies may impact remittance flows to developing countries in the longer term,” said Dilip Ratha, Manager of the Bank’s Migration and Remittances Unit and a co-author of the Migration and Development Brief. “But in the medium-term the risk of disruption to these flows is relatively low.”
Also, some GCC states are considering indigenisation programmes that have raised concerns of adverse implications for future remittances to migrant-sending countries.
By Saifur Rahman?Business Editor
Gulf News 2011. All rights reserved.
