Expat remittances works both ways

Approximately $8-$10 billion (Dh29.36-Dh36.7 billion) per annum is remitted by expatriate workers and professionals from the UAE to the rest of the world, according to research conducted by the World Bank.

Although the size of remittances has been growing over the last few years, due to strong economic growth, this year the amount could either decline or remain the same, according to the report.

The UAE’s geographical proximity to the countries of South Asia as well as its liberal economic policies provide an attractive destination for expatriates.
The official estimates indicate only the visible remittances from the UAE. Some economists estimate actual monetary transfers to be as much as twice those reported.

“In the UAE a lot of expatriates send money back home with relatives or friends,” said George Naufal, Assistant Professor at the American University of Sharjah, who specialises in remittances.

“There is widespread use of the hawala system [wherein] the money is transferred through a system of individuals located in the sending and receiving countries.
“So the actual amount remitted from the UAE is more likely higher.”

However, according to reports, there has been a dip in the growth of remittances from the Gulf countries compared to the past three years.

“2006 to 2008 were exceptional years because construction activities were influential,” said Sudhir Kumar Shetty, COO of the UAE Exchange Centre.
Shetty added that it was still too early to obtain a reliable estimate of remittance outflows for 2009 as its peak occurs during the last quarter of the year.

According to the World bank Migration and Remittances Factbook 2008, expatriates comprise around 50.4% of the population of the GCC countries, with remittance outflows forming a large share of the countries’ GDPs.

“The major outflows are from those living in the UAE to maintain their families abroad, and are only a small part of their income.

“At the same time, money not remitted is spent locally, driving the economy and helping build infrastructure,” concluded Shetty.

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