Xpress Money, Pakistan

Remittances from Middle East countries register exponential growth

by Rizwan Hamdani

Almost seven million Pakistanis have migrated across 80 countries for seeking better opportunities. Majority of the Pakistanis migrating overseas are employed in Middle East region, European region and North American region. Over the years, Middle East countries have emerged as preferred migrating destination for Pakistanis and the region currently employs over five million blue collared workforce.

Remittances from overseas Pakistanis are a lifeline for the Pakistani economy and contribute approximately six percent of the country’s GDP. Coming as a sign of celebration, the continuous growth in remittances in Pakistan has maintained its resilience for the year 2013. As per recent data by State Bank of Pakistan release in July, Pakistan received a record sum of US $13.920 billion in 2013 registered a growth US $ 800 million. Out of the total remittances received by Pakistan, Middle East region has a share of 60 percent followed by North American region and European region with 17 and 16.55 percent respectively.

The Middle East region constituting Kingdom of Saudi Arabia (KSA), United Arab Emirates (UAE), Kuwait, Oman, Qatar and Bahrain contributed approximately US $ 8.462 billion in 2013. Among these countries, KSA registered a phenomenal growth of 11.33 percent by contributing US $ 4.104 billion followed by UAE contributing US $ 2.75 billion. However, as compared to FY 2012, remittances from UAE declined by 3.46 percent. The other countries in the region, Kuwait, Oman, Qatar and Bahrain, contributed US $ 0.619 billion, US $ 0.384 billion, US $ 0.321 billion and US $ 0.282 billion respectively. All these countries registered marginal growth as compared to FY12.

The North American region is the second largest send region for Pakistan which comprises The United States and Canada. The region contributed US $ 2.363 billion. Inflows from The United States witnessed a significant deficit of 6.35 percent with total remittances inflow of US $ 2.186 billion during 2013 whereas Canada remitted US $ 0.177 billion registering a marginal decline of 0.29 percent.
On the other hand, The European region comprising The United Kingdom and other countries in European Union (Germany, France, Netherland, Spain, Italy, Greece, Sweden, Denmark, Ireland and Belgium) has always been a key send market for Pakistan. The region contributed US $ 2.303 billion. The UK had registered significant growth of 28 percent as compared to FY12. Pakistanis residing in the UK have remitted a total of US $ 1.946 billion in FY13.

From the mentioned in-depth analysis, the Middle East region establishes its dominance as the largest send market for Pakistan. The region employs over 50% of the total Pakistani migrant workforce across KSA, UAE, Bahrain, Kuwait, Oman and Qatar. The remittance inflow from this region has constantly been on rise since 2010 and has displaced North America and European regions from being the largest send markets for Pakistan. (Depicted below)

Remittance Value (Currency – US $)                                                                                   (Million US $)
Year	North American region		UK and European Union		Middle East region
	USA	Canada	EU*	UK	KSA	UAE	Kuwait	Oman	Qatar	Bahrain
2011	2068.67	184.62	354.76	1199.7	2670.0	2597.7	495.1	337.59	306.11	167.29
2012	2334.47	177.71	364.79	1521.1	3687	2848.8	582.57	382.66	318.82	210.95
2013	2186.21	177.19	357.37	1946	4104.7	2750.1	619	384.8	321.25	282.83
Total	6589.35	539.52	1076.9	4666.8	10461	8196.7	1696.7	1105	946.18	661.07
Remittance inflows from each region	7128.87		5743.7		23067.63

    Remittances Data July 2013: State Bank of Pakistan 

* EU includes (Germany, France, Netherland, Spain, Italy, Greece, Sweden, Denmark, Ireland, Belgium)

The growing inward remittances could be impacted with new employment laws in KSA that include visa restrictions and tedious processes for obtaining work permit, which is likely to result in the deportation of 35,000 Pakistanis. Nonetheless the newly elected government is planning to increase the remittances from the existing US$13.92 billion by exploring the Pakistani workers’ market in countries with friendly labour laws particularly the Arab states.

There is an increasing awareness amongst overseas Pakistanis to build a better socio-economic environment for their families back home by improving their standard of living and creating opportunities for the future generation. This is the significant driver for constant year – on – year growth in remittances.

Mr. Rizwan Hamdani is the Country Manager for Xpress Money, Pakistan