Trends in expatriate remittances in GCC

While the number of expatriate workers has decreased slightly in the Gulf Cooperation Council countries in recent years, remittance trends have remained stable in most countries of the region during 2018 and 2019.

According to the Statistical Centre of the GCC countries, the UAE ranked the first in transfers, with remittances amounted to $45 billion in 2019, down 2.4 per cent from the previous year. Saudi Arabia came in second with transfers totalling $30.3 billion in 2019, down 8.1 per cent from 2018.

However, remittances from Kuwait increased in 2019 to $14.7 billion, up 3.9 per cent, while Qatar witnessed an uptick of 3.5 per cent to $11.8 billion in 2019, earning the fourth place in transfers.

As for the Sultanate, expatriate remittances declined in 2019 to reach $9.2 billion compared to $10 billion in 2018, a decline of 8 per cent, and was placed fifth. Remittances from Bahrain decreased to $2.9 billion in 2019, declining 11.6 per cent, which was the largest drop among the GCC countries.

Indicators provided by the Statistical Centre of remittances by GCC expatriates as a percentage of Gross Domestic Product (GDP) at current prices put the Sultanate in the number one position at 12 per cent, followed by Kuwait at 10.9 per cent, UAE 10.7 per cent, Bahrain 7.5 per cent, Qatar 6.4 per cent, and finally Saudi Arabia 3.8 per cent.

The Sultanate and the rest of the Gulf Cooperation Council countries have witnessed during the last period a decline in the number of expatriate workers as a result of the economic slowdown that the region witnessed since mid-2014 due to the drop in global oil prices, followed by the negative effects of the COVID-19 pandemic that impacted businesses across different economic sectors, prompting many expatriates to leave the region.

The GCC countries are distinguished by the presence of a large number of Asian workers. Many families in those countries depend on money that is remitted by relatives working in the Gulf, which helps recipients avoid poverty.

Based on official data, we find that the number of expatriate workers in the Sultanate decreased to 1.6 million people at the beginning of this year, a decline also witnessed in the rest of the GCC after several decades of economic activity in the region. The Gulf economy played a major role in attracting foreign labour in light of the oil boom witnessed since 1973.

However, with a view to reducing their dependence on hydrocarbon revenues, the Gulf States are moving to put in place policies and programmes that seek to support national labour in various sectors as part of a push towards economic diversification. Nevertheless, the need for expatriate labour is likely to be revived once local economies recovers and the pandemic recedes into the background.

Haider al Lawati
haiderdawood@hotmail.com