Remittances from expatriate workers offer a significant source of hard currency income for oil importing states in the Middle East and Asia, such as Pakistan, India and Egypt. Pakistan is particularly reliant on such flows, with Saudi Arabia accounting for 25 percent of its total remittances in 2010. Pakistani workers in the Kingdom sent home $1.92 billion last year, an amount that has almost doubled in just four years. Saudi Arabia is Pakistan's second-most important source of remittances behind the UAE, and ahead of the United States.
Filipino workers in the Kingdom sent home almost $1.5 billion in remittances last year — more than 50 percent of the total from Middle East countries, while remittances from the Kingdom also account for almost a third of Bangladesh's total.
Egypt, which counts remittances as among its top sources of hard currency along with tourism and Suez Canal receipts, got $1 billion in remittances from Saudi Arabia in the last fiscal year, although Egypt has become much less reliant on Saudi Arabia as a source of remittances. In the 2009-2010 fiscal year, 10.3 percent of Egypt's remittances came from the Kingdom, down from almost 17 percent five years earlier. Egypt more heavily relies on remittances from Kuwait (20.4 percent), the United States (29 percent) and the UAE (17.7 percent).
While the effort to create jobs for Saudis would likely reduce reliance on foreign workers in the long-term, this would not necessarily lead to a rapid decline in the number of expatriates working in the country. With oil prices hovering around $100 a barrel, SAMA's (Saudi Arabian Monetary Agency’s) foreign assets at record levels, and fiscal and current account balances likely to post big surplus, the Saudi economy has the potential to witness a good resurgence in private sector activity in the coming years under the right conditions.
As such, a properly functioning private sector encouraging small and medium-sized enterprises would create job opportunities for nationals while continuing to open the door for foreign talent. This is why authorities must tread carefully with the Nitaqat program to ensure it does not wipe out small firms exhibiting potential for long-term growth. It should be balanced with adequate incentives, more streamlined rules for doing business and obtaining visas, and emphasis on quality training and instructions both in schools and in the workplace.
