Majority of recipients were in India, Egypt and Pakistan
Saudi Arabian residents sent approximately $27.6 billion in outward remittances last year, according to the World Bank – ahead of the rest of the Mena region.
The kingdom not only tops the list in the Arab world, but also is second worldwide, behind the US. It has been estimated that the majority of recipients were based in India ($8.4bn), Egypt ($5.7bn) and Pakistan ($3bn). Robust oil prices and vibrant economic activity in the country have led to a surge in urban development, which, in turn, increased the demand for foreign labour.
Within the GCC region, the UAE is in second place with $20.3bn, way ahead of Kuwait, which comes third with $8.5bn. The Saudi Economic Review, published by The National Commercial Bank, records the average cost of sending $200 stands at approximately 4.5 per cent. Its latest report states that Saudi Arabia and Russia are the cheapest remittance-sending countries, at 4.5 per cent of the amount sent. South Africa, on the other hand, is the costliest, with an average of 20.7 per cent of the amount sent.
The report adds: “In our opinion, the Saudi Nitaqat programme is expected to swell these figures in 2013, as expats boost money transfers prior to leaving the country.”
Last year, a total of $401bn in remittances was sent worldwide, of which 75.8 per cent was transferred to developing countries. India received $69.4bn in 2012, followed by China ($60.2bn) and The Philippines ($24.5bn). East Asia and the Pacific region are expected to remain the largest recipient. In 2012, remittances to the Mena region grew by an estimated 14.3 per cent year-on-year, which is the fastest annual expansion rate, reaching $49bn. Egypt accounts for more than 40 per cent of remittance inflows into the Mena region, with $20.5bn or six per cent of its total GDP being sent mostly to Lebanon, Jordan, Morocco and Tunisia.
The latest forecasts suggest remittances to reach $559bn this year.