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Wednesday, 11 March 2015

How to Reduce Foreign Remittances from Saudi Arabia? $44 billion in 2014

All of us know what expats are here for. They earn honestly and work hard in Saudi Arabia so that they can earn enough money and send it back to their home for their families to live a peaceful prosperous life and for savings as well. Almost all of the money earned by the expats is sent back to home subtracting their daily expenses only. No one has any interference in this regard because this fact is quite clear when one hires these expats that they will be sending money back home out of the Kingdom.  So there should not be any feeling like jealousy or envying their money.



This way the money is not invested in the country by the expats and it is not providing any benefit to the Kingdom itself. According to the statistics , in the year 2014 the foreign remittances reached a record figure of $44 billion - SR 165 billion which is more than the total budget of Pakistan and many other third world countries. This huge figure is the white money that is legal. Money from illegal business is not included in the above amount. For example money from illegal trading or drugs trade where Saudi label is falsely used. Foreign remittance from all GCC countries amounts to $100 billion which means that foreign remittance from Saudi Arabia is 44% of total remittance from GCC. Source: Saudi Gazette




This is very clear and obvious that if those people were Saudis instead of the expats, they would have earned the money and stayed in the Kingdom investing over here only. This helps in flourishing the Kingdom’s economy. Local market also would have flourished with the remittances more as compared to the remittance from tourism. They send all of the money back home because they are not allowed to invest anywhere within the Kingdom. They don’t have money expenditures options within the Kingdom except for their daily living expenses.



How to Reduce Foreign Remittances from Saudi Arabia?
We can’t do anything in this regard of reducing the remittances but we can certainly follow some measures to avoid this situation by bit easing the laws for expats. 
  1. One of the measures can be allowing the expatriates to invest in the Kingdom and startup a business openly. This will only benefit the Kingdom and flourish its economy and a good way to keep the money running within the country instead of sending it out of the country and also prevent business.
  2. Investors from other countries might be interested in that business flourishing the Kingdom’s infrastructure.
  3. This can also be done by giving them life time residence otherwise they cannot even buy a house in Saudi Arabia. Isn’t it then difficult for the expats to keep their money in the banks here? Instead they send it back home and invest in their country, buying lands and all.
  4. If one wonders, there is actually nothing wrong in allowing expats to start trading and own a business legally and openly over here. So the government should allow them to do so for their own benefit. Saudi Arabia can follow the business formula as UAE has adopted. Saudi will be owner of 51% of the business so it will be a win win situation for everyone. Saudi will be earning money from the efforts of Expats.
  5. Let them bring their families here more easily. It will increase their expenses here in Saudi Arabia which will eventually reduce foreign remittance from Saudi Arabia.



Joseph Flannagan: This post raises some very interesting points regarding foreigners owning business and property / land in the Kingdom. Saudis buy land, property and businesses in Europe, USA, Australia, Canada etc. but prohibit non Saudi citizens from doing the same. This gives no incentive to take a longer term interest in the Kingdom and its prosperity. Secondly it must be remembered that expats DO spend money in buying food, clothes, shoes, cars, car maintenance, household items etc. Even if some of these are provided by the employer they still have to be purchased locally, thus contributing to the local economy. Just look at the passenger lines at Jeddah, Riyadh or Dammam to witness the boxes of goods purchased by the foreign workers returning to India, Pakistan, Bangladesh, Sudan, and Nigeria etc. ALL purchased in the local souks. And imagine the gold, jewelry, watches and small gift items that you do not see! If by some miracle Saudi Arabia was run by Saudis from tomorrow and the foreigners all went home, then you would see economic hardship, bankruptcies, and business collapses by the thousands in EVERY sector of the economy.

Useful Instructions
  1. Tips by MOI for expats holding Iqama
  2. Tips to Live in Saudi Arabia as Non-Muslims
  3. Tips to Buy Gold jewelry in Saudi Arabia
  4. How to Survive a Sandstorm in Saudi Arabia?
  5. Important Tips to Donate Blood in Saudi Arabia

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