JEDDAH, 26 March 2006 — Personal foreign remittances of Saudis increased considerably during the past three years as it reached a record SR56.28 billion in 2005, press reports said.
“The amount transferred by Saudis for personal purposes to foreign countries rose by 87.7 percent last January to reach SR5.37 billion,” Al-Watan Arabic daily reported quoting the Saudi Arabian Monetary Agency (SAMA).
Analysts believe that such remittances of Saudis were expected to increase this year. Last year the figure reached SR56.28 billion, which was 57.1 percent higher than the figure of 2004 (SR35.81 billion), the paper said.
“Saudis overtook expatriates in foreign remittances last year as the latter sent only SR40.8 billion in 2005,” the paper pointed out. “The figure shows that Saudis foreign remittances rose by 38 percent compared to expatriates,” it added.
Analysts attributed the increase in Saudis’ foreign remittances to their increasing participation in the initial public offerings (IPOs) of some major Gulf companies as well as to their investments in many Arab bourses.
Some analysts have, however, expressed their concern over the increase in such foreign transfers, saying it would harm the economy.
During the past six years, expatriates have transferred SR233 billion in foreign remittances. During the same period, the money sent by Saudis stood at SR175.4 billion.
The figure does not include foreign currency purchases made by Saudis during their trips abroad for tourism. Last year alone Saudis bought foreign currency worth SR3.67 billion. Expatriates had paid SR8.13 billion for the same purpose.
Saudi Arabia recently opened up its stock market to foreign residents as part of efforts to make use of their funds and boost the liquidity of the market, the largest in the Arab world.
According to press reports, higher authorities in the Kingdom are conducting a serious study on how to make use of expatriate workers’ funds by opening new channels of investment for them.
The plan includes opening new investment channels for expatriates and removing all barriers to their investments in the Kingdom.
The authorities came up with the new plan after reports of the large amounts that expatriates had been sending abroad. A recent report by the Ministry of Economy and Planning estimated the expatriates’ remittances during the past 10 years at SR585.4 billion.
The amount is equal to the funds required by the Kingdom for infrastructure projects until 2020, the ministry said. Remittances by the country’s six million expatriates have increased by two percent annually despite the Saudization drive.
The money sent abroad by expatriates from 1993 to 2002 was almost double the amount sent from 1983 to 1993 (SR291 billion), the ministry said. In 1993 alone, remittances of expatriates amounted to SR67.8 billion but declined to SR57.7 billion in 2000, to rise again to SR59.45 billion in 2002.
