Specialists have estimated the volume of annual remittances by expats in GCC countries at $120 billion, with $48.3 billion leaving Saudi Arabia alone in 2012, which is expected to increase by 20 percent in 2013.
Some economists say excessive remittances are slowly causing damage to the Kingdom’s economy. Economist fear money laundering, fanning terrorism and the infiltration of suspicious transactions.
Some agencies in charge of the country’s banking system ensure the sector is secure given the strictness of the system that prevents the infiltration of illegal or suspicious transactions.
“It is only normal for expatriates to send the money they earned in the Kingdom to their families abroad,” said Talat Hafiz, secretary-general of the Banking Awareness Committee. “The steady yearly increase in remittances is attributed to several factors, including the fact the Saudi labor market heavily depends on expat manpower, especially in technical professions.”
He said Saudi Arabia is one of the top 10 countries in the world when it comes to combating money laundry, despite its financial, banking and economic freedom.
As a result of the manpower shortage and the fact that incomes of foreign workers recorded an increase between 2006 and 2012, remittances reached $37.5 billion last year compared to $22.5 billion in 2006.
Abdul Hameed Al-Amri, a financial analyst and member of the Saudi Economic Association, said the main source of the massive transactions that made Saudi Arabia one of the world’s top countries in labor foreign remittances is the highly-paid jobs of cover-up businesses or “tasattur.”
“I hope we don’t see a new kind of tasattur that involve remittances themselves where a Saudi sends the remittance under his name,” Al-Amri said.
Excessive remittances ‘drain GCC economies’
Excessive remittances ‘drain GCC economies’
