JEDDAH, 7 June 2007 — Saudi authorities and businessmen are seriously thinking about how to make use of the massive funds of expatriate workers by opening new channels of investment.

According to press reports, the country’s eight million expatriates annually send home nearly SR100 billion ($26.6 billion).

“It’s the right of expatriates to transfer the money they earn in the Kingdom to their countries. At the same time, it is important that we create new investment channels to absorb part of this money in investments within the Kingdom,” said Abdullah ibn Saleh Al-Hamoud, a businessman. He said the government’s decision allowing expatriates to invest in the stock market had a positive impact on the economy as it helped reduce foreign remittances by 10 percent last year. Many expatriates now put their money in various investment funds being operated by Saudi commercial banks.

Saudi Arabia and other Gulf countries are seeking billions of dollars in foreign investments to carry out vital projects in the areas of information technology, oil and gas, petrochemicals, desalination, railway transport, education, and health and electricity.

The Gulf Cooperation Council (GCC) considers expatriates’ foreign remittances (which account for 42 percent of the total foreign investments they receive) as a big loss. “This emphasizes the need to develop new saving and investment channels for expatriates working in GCC countries,” a GCC report said.

“Most foreigners will be happy to invest in Saudi Arabia if they are given enough guarantees and incentives by the government,” said T. Vijayakumar, customer relations manager for Air-India. “Due to a lack of opportunities and guarantees most expatriate workers withdraw their salaries from banks and transfer them to their respective countries,” he pointed out.

Vijayakumar expressed unhappiness with the move to freeze accounts of expatriates when the validity of their iqama (residence permit) expires. “Such measures will create fear among foreigners about the safety of their bank accounts,” he said.

He urged Saudi authorities to take necessary measures to remove such fears.

Mohammad Baljoun, a marketing executive at Banque Saudi Fransi (BSF), told Arab News that many expatriate workers have started putting their money in various investment funds offered by banks. “Of the total clients I dealt with today, 65 percent were expatriates, mostly Lebanese, Pakistanis, Indians and Egyptians,” he said. BSF offers Shariah-compliant mutual funds such as Al-Fursan and Al-Qasr.

Expatriate businessmen said the government must take necessary measures to protect their investments. “Businessmen are cowards. They will not put their money in a country if they don’t feel safe there,” one foreign entrepreneur said.

He called on the government to simplify procedures for issuing foreign investment licenses to expatriates in the Kingdom.

A business executive, who requested anonymity, urged the government to ease procedures for expatriates to bring their families to the Kingdom and open higher educational institutions

“This will result in expatriates spending most of the money they earn within the Kingdom,” he said.

A report by the Ministry of Economy and Planning estimated expatriate remittances in the past 10 years at SR585.4 billion.