Sunday, May 01, 2016
Dubai: Remittance outflows from the UAE continued to grow despite reports of economic slowdown owing to the decline in oil prices, industry sources claimed.
Money transfer operators based in the UAE reported that their remittance business has improved, thanks to favourable exchange rates and growing expatriate population in the country.
“People continue to remit money,” said Sultan Al Mahmoud, chief marketing and support services officer of Wall Street Exchange. The company reported that their remittance business grew by 10 per cent in 2015 compared to a year earlier.
“One of the primary reasons for growth in remittance is the increase in the number of expatriates sending money to their respective home countries,” said Al Mahmoud.
“The weakening of various currencies against the US dollar encouraged more expatriates to remit money. Few currencies reached their lowest level, benefiting the expats by getting higher exchange rate,” he added.
Wall Street Exchange’s top five remitters are expatriates from India, Bangladesh, Philippines, Pakistan and Sri Lanka. Funds remitted from the UAE are believed to be the lifeline of many families based in the Asian region.
According to the World Bank Group’s Migration and Remittances Fact book 2016, the number one beneficiary of global remittances in 2015 was India, which cornered $72.2 billion of the remitted funds in 2015, followed by China ($63.9 billion) and the Philippines ($29.7 billion).
Pakistan came eighth on the list, accounting for $20.1 billion of the remittances, while Bangladesh emerged as the tenth biggest remittance recipient, with $15.8 billion.
However, the total amount of money sent to the developing countries posted only a “marginal” growth in 2015. The World Bank attributed this to weak oil prices straining the earnings of expatriate workers and their ability to send money home to their families.
According to the World Bank’s latest edition of the Migration and Development Brief, released in April, officially recorded remittances to developing countries amounted to $431.6 billion in 2015, an increase of 0.4 per cent over $430 billion in 2014.
“The growth pace in 2015 was the slowest since the global financial crisis,” the World Bank said in a press statement. “The slowing in remittances growth, which began in 2012, was exacerbated last year by low oil prices, which are taking a toll on many oil-exporting remittance-source countries, such as Russia and the Gulf Cooperation Council (GCC) states.”
However, for Promoth Manghat, CEO of UAE Exchange said, the GCC “remains a key hub for remittance outflows” especially to “other Arab countries”, adding that the various government initiatives, such as Expo 2020 in Dubai and FIFA World Cup in Qatar, are continuing to fuel the growth of outgoing remittances.
“Despite economic pressures, remittance outflows from oil-exporting GCC countries continued to rise in 2015 due to maintenance of fiscal spending, and the peg to a strong US dollar by most economies in the GCC.”
Manghat said they’ve seen a rise in their remittance transactions to Egypt and Jordan by 14.4 per cent and 13.5 per cent, respectively, in the first quarter of the year compared to the same period in 2015. “It’s worth noting that Egypt receives three times the revenue generated by the Suez Canal from global inward remittances,” said Manghat.
By Cleofe Maceda Senior Web Reporter
Gulf News 2016. All rights reserved.
