UAE expat remittances top $49 bn in five years

Expatriates in Gulf hydrocarbon producers siphoned more than $49 billion out of the UAE in five years but the transfers have had little effect on the country’s current account due to strong oil prices, according to official data.

Total transfers by the nearly 20 million expatriates living in the six-nation Gulf Cooperation Council (GCC) stood at around $269.8 billion during that period and Saudi Arabia emerged as the main source of those remittances.

The figures by the Abu Dhabi-based Arab Monetary Fund (AMF) showed remittances by the more than six million foreigners in the UAE were estimated at nearly $49.3bn during 2006-2010 while those by the eight million expatriates residing in Saudi Arabia totalled $112.2bn.

Kuwait emerged as the second largest source of those transfers, with remittances by its nearly 2.5 million expatriates reaching $50.7bn. 

Remittances by foreigners in Qatar stood at around $29.5bn while those from Oman and Bahrain totalled $20.5bn and $7.7bn respectively, according to the AMF, an affiliate of the Cairo-based Arab League.Remittances in 2010 stood at $27.9bn from Saudi Arabia, $12.9bn from Kuwait, $11.2bn from the UAE, $11.1bn from Qatar, $5.3bn from Oman and around $1.6bn from Bahrain.

The report gave no nationality breakdown but said remittances to non-GCC Arab countries totalled about $160bn during 2006-2010.

Egypt, Lebanon, Morocco, Jordan and Sudan were the largest recipients.Despite the massive remittances, the current account of most GCC members continued to record high surpluses thanks to strong oil prices.

In the UAE, the surplus hit a record high of $22.7bn in 2008 when crude prices averaged at as high as $95 a barrel and the UAE pumped at one of its highest output levels of nearly 2.6 million bpd. The surplus fell back to about $7.8 billion before rebounding to $11.2bnin 2010.

The AMF gave no data for 2011 but the UAE is expected to have recorded a higher current account surplus because of a surge of $30 in oil prices.

Saudi Arabia’s current account climbed to an all time high of $132.2bn in 2008 before tumbling to $20.9bn in 2009. But it sharply rebounded to around $66.7 billion in 2010 and is expected to have swelled further in 2011.Kuwait recorded a massive surplus of $60.3bn in 2008 and the account remained relatively high at $25.7 and $36.7bn in 2009 and 2010.

Qatar, the world’s top LNG exporter, saw its current account balance climbing by nearly 40 per cent to $15.8bn in 2008. It slumped to $6.6bn before surging back to $21bn due to a sharp rise in its gas supplies.

Oman’s account stood at $5bn in 2008 but recorded a deficit of $287m in 2009 because of lower crude prices. It reverted back to a surplus of around $1.9bn in 2010, the report showed.

Bahrain, which is not an oil exporter, recorded a current account surplus of around $2.2bn in 2008, slightly below its 2007 balance, and about $559m and $770m in 2009 and 2010 respectively.

Asians, mainly from India, Pakistan, Bangladesh, Afghanistan, Sri Lanka, Indonesia and the Philippines account for more than half the expatriate community in the GCC, which controls just over 40 per cent of the world’s recoverable oil wealth and a quarter of the global gas resources.

Foreigners began streaming into the Gulf nearly half a century ago when the discovery of oil kicked off one of the largest infrastructure construction drives in history. The drive has largely receded but regional nations continue to be heavily reliant on expatriates as more experienced and less costly labour.ends

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