Expat remittances likely to plummet after labor cleanup

June 16, 2013

Expat_remittances

Jeddah, Jun 16: Remittances from Saudi Arabia by expatriate workers to their home countries are likely to decline due to the new labor laws, according to Fadhel Albuainain, economist and banking expert.

“The launch of the new, accurate labor system and the implementation of the salary protection program in the future will help reduce the amount of transferred money out of the Kingdom by expatriates,” he said.

“There is no doubt that the nearly SR 110 billion sent out of the country so far is a big loss for the Kingdom's economy,” he added.

According to the recently released Migration and Development Brief 2012 of the World Bank's Migration and Remittance Unit, Saudi Arabia contributed the highest share of remittances in 2012. The amount was estimated at $ 24.18 billion, accounting for 39 percent of the GCC's total remittances, followed by the UAE, where remittances reached $ 18.21 billion, contributing to 29.8 percent of the GCC's total remittances.

The Kingdom is the largest among the GCC countries in both oil production and population. The Kingdom's remittance rate is the highest among the Gulf countries mainly due to the country's large expat population, estimated at 8 million by the General Department of Statistics.

Albuainain said he is optimistic about the recent move by the Labor Ministry to create a database for workers' salaries. This, he said, would reduce the remittance rate.

“Most expatriates with iqamas transfer their money officially through the Saudi Arabian Monetary Agency, which monitors the amount of money that each expat wants to send and compares it with his salary. If he transfers more than his salary, he will be investigated,” Albuainain said, adding that illegally transferred money is mostly sent by illegal expatriates who do not have iqamas.

“They send their money with the help of loan traffickers. In most cases, this money comes from an illegal source. However, if the Labor Ministry succeeds in arresting illegals, the illegally remitted amount will come down by SR 10 billion,” said Albuainain.

He said the Labor Ministry’s main challenge in the next stage is to control illegally transferred money.

The economist advised the Ministry of Kabor to minimize the number of illegal expatriates in order to decrease the amount of transferred money.

“We can provide a healthy environment for expatriates to invest in the stock market. Expatriates are now afraid of the stock market because of the huge losses it registered recently. When we activate this sector and provide a better working environment, we can attract them to invest safely in Saudi Arabia,” he said.

Hattab Al-Enizi, spokesman of the Labor Ministry, told Arab News that the wage protection program will officially start on July 1. It aims to include companies that have more than 3,000 employees, while smaller companies will be gradually included in the new system.

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Agencies
February 27,2020

Riyadh, Feb 27: Saudi Arabia on Thursday halted travel to the holiest sites in Islam over fears about a new viral epidemic just months ahead of the annual hajj pilgrimage, a move coming as the Mideast has over 220 confirmed cases of the illness.

The extraordinary decision by Saudi Arabia stops foreigners from reaching the holy city of Mecca and the Kaaba, the cube-shaped structure the world's 1.8 billion Muslims pray toward five times a day. It also said travel was suspended to Prophet Muhammad's mosque in Medina.

The decision showed the worry about the outbreak potentially spreading into Saudi Arabia, whose oil-rich monarchy stakes its legitimacy on protecting Islam's holy sites. The epicenter in the Mideast's most-affected country, Iran, appears to be in the holy Shiite city of Qom, where a shrine there sees the faithful reach out to kiss and touch it in reverence.

"Saudi Arabia renews its support for all international measures to limit the spread of this virus, and urges its citizens to exercise caution before traveling to countries experiencing coronavirus outbreaks," the Saudi Foreign Ministry said in a statement announcing the decision.

"We ask God Almighty to spare all humanity from all harm." Disease outbreaks always have been a concern surrounding the hajj, required of all able-bodied Muslims once in their life, especially as pilgrims come from all over the world.

The earliest recorded outbreak came in 632 as pilgrims fought off malaria. A cholera outbreak in 1821, for instance, killed an estimated 20,000 pilgrims. Another cholera outbreak in 1865 killed 15,000 pilgrims and then spread worldwide.

More recently, Saudi Arabia faced a danger from a related coronavirus that caused Middle East respiratory syndrome, or MERS. The kingdom increased its public health measures in 2012 and 2013, though no outbreak occurred.

While millions attend the 10-day hajj, this year set for late July into early August, millions more come during the rest of the year to the holy sites in the kingdom.

"It is unprecedented, at least in recent times, but given the worldwide spread of the virus and the global nature of the umrah, it makes sense from a public health and safety point of view," said Kristian Ulrichsen, a research fellow at the James A Baker III Institute for Public Policy at Rice University. "Especially since the Iranian example illustrates how a religious crossroads can so quickly amplify the spread and reach of the virus." The virus that causes the illness named COVID-19 has infected more than 80,000 people globally, mainly in China. The hardest-hit nation in the Mideast is Iran, where Health Ministry spokesman Kianoush Jahanpour said 19 people have died among 139 confirmed cases.

Experts are concerned Iran may be underreporting cases and deaths, given the illness's rapid spread from Iran across the Persian Gulf. For example, Iran still has not confirmed any cases in Mashhad, even though a number of cases reported in Kuwait are linked to the Iranian city.

In Bahrain, which confirmed 33 cases as of Thursday morning, authorities halted all flights to Iraq and Lebanon. It separately extended a 48-hour ban overflights from Dubai and Sharjah in the United Arab Emirates, through which infected travellers reached the island kingdom off the coast of Saudi Arabia.

Iranian President Hassan Rouhani said there were no immediate plans to quarantine cities but acknowledged it may take "one, two or three weeks” to get control of the virus in Iran.

As Iran's 80 million people find themselves increasingly isolated in the region by the outbreak, the country's sanctions-battered economy saw its currency slump to its lowest level against the US dollar in a year on Wednesday.

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Agencies
January 4,2020

Baghdad, Jan 4: At least five people were killed on Saturday by an airstrike on a vehicle convoy of Iraq's Shia Popular Mobilization Forces in northern Baghdad, a source in security forces told Sputnik.

Earlier in the day, the source told Sputnik about a powerful explosion in Baghdad's northern district of Taji.

"A vehicle convoy of the Popular Mobilization Forces has been attacked. According to preliminary data, five people have died. Their names have not been clarified so far," the source said.

On Friday, several senior members of the Popular Mobilization Forces, as well as commander of the elite Quds Force of Iran's Revolutionary Guard Corps Qasem Soleimani, were killed by a US drone attack near the Baghdad International Airport.

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News Network
April 16,2020

Dubai, Apr 16: Saudi Arabia reported 518 new cases of coronavirus, bringing the total number of infections in the country to 6380, the Ministry of Health announced on Thursday.

According to the ministry of health, the number of recoveries today were 59, making total of recoveries in the kingdom 990, with 71 critical cases in intensive care.

The ministry also confirmed 4 deaths, bringing the total number of deaths in the kingdom to 83.

Saudi Arabia imposed a 24-hour curfew and lockdown on the cities of Riyadh, Tabuk, Dammam, Dhahran and Hofuf and throughout the governorates of Jeddah, Taif, Qatif and Khobar. This week the curfew was extended until further notice by king Salman

Overall, Saudi Arabia has reported one of the lowest rates of infections in the region, with around 6000 cases in a population of over 30 million.

Private sector support

Saudi Arabia has allocated SR50 billion (Dhs49 billion)to support the private sector as part of its package of initiatives approved by King Salman on Wednesday aimed at mitigating economic repercussions from the coronavirus disease (COVID-19).

The package targets small and medium-sized enterprises (SMEs) and economic activities that have been most affected by the pandemic.

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