Job Discussion Forums

[nomad soul]

Expatriates defend right to remit their earnings back home
By Renad Ghanem, Saudi Gazette | August 12, 2015
Source: http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20150813253294

JEDDAH — The issue of exorbitant remittances by expatriates in the Kingdom has recently become a hot topic on social circles with several people offering different viewpoints. Although financial analysts have repeatedly warned that expat remittances are damaging the Kingdom’s economy and have been clamoring for strict regulations to curb the practice, several views have appeared seeing nothing wrong in such remittances.

Expatriate workers earning their living in the Kingdom argue that the money is theirs and that they have left their country and their near and dear ones to work hard to earn and support their families back home. Those against the massive outflow of money argue that the remittances are an obstacle to development and investment as they lead to an unchecked money transfer to other countries.

According to a report published in a local daily earlier this year, total expat remittance from Gulf Cooperation Council (GCC) countries reached $69.5 billion (SR261 billion) in 2012. Saudi Arabia was first among the GCC countries with remittances touching almost the $28 billion-mark.

Jamil, an Indian expatriate, criticized the call against expat remittances, saying that it is his money earned through hard work and sweat. Requesting anonymity, he said the only reason he left his own country was to financially support his family. “I know that there is no law against transferring money abroad, but I read articles in local dailies from writers calling to curb the practice of expat remittances or put a limit to it,” Jamil said. “On what basis are they calling to stop transferring money to our families? If I chose to keep my money here, what would I do with it? I only spend some of it for my personal expenses and the rest should go to my family since I am the only one supporting them. As long as we earn this money legally, and transfer it legally financial experts shouldn’t keep asking the government to limit it. Remittances are increasing because the number of expatriates is increasing," he said.

A Saudi accounting manager at a private company, who wished to remain anonymous, told Saudi Gazette that those who call for controls on expat remittances lack awareness. “We should be aware that a huge percentage of our economy and national income come through expats' hands,” he said. “They work for the Saudi economy and they help in boosting it along with the citizens. An employee who receives SR2,000 monthly salary brings three times the value to the company. That is why talking about putting a limit on transferring money is unfair,” he added. The accounting manager said expatriates also spend a fair amount of their money on house rent, cars, gas and all their needs from the Saudi market and send their children to private schools owned by Saudi investors. “As accounting manager, I believe that it’s an agreement between us: they work and we pay, but we don’t have a right to advise them how to spend their money — it is not logical to do so,” he said. “They came here to work and earn their money. What they want to do with it is totally up to them since the chances of investing their money in the country are limited.”

Shadi Wahba, an Egyptian who works as an engineer at a private company, believes there is no reason for expatriates to keep their salaries inside the Kingdom as there is almost no way for them to invest their earnings. “I send a monthly amount to my parents in Egypt because they pay my bank installments,” Wahba said. “My bank account in Egypt gives me eight percent annual benefit on the money. It’s kind of investment to me. If I had the chance to invest my money here, then I wouldn’t transfer my salary back to my home country.” He said the money expatriate workers receive monthly is a reward for their effort. “It is not a donation. We have a job to do, we do it and then we receive our wages.”

(End of article)

[scot47]

This has emerged periodically in the Saudi media over the past 20+ years. I cannot see Exchange Control coming to KSA any time soon.

[veiledsentiments]

And next will come up the repeated idea to tax the expats in order to keep more of their incomes.

VS

[plumpy nut]

I have a good solution for the Saudis. Just hire Saudis to be maids and nannies and pick up the trash in your streets and do construction! Otherwise when somebody comes to the ****hole, why are they going to come at all if it they can't send their earnings back to their country that they are citizens of! Saudis don't accept them. Oh well at any rate the Saudis will soon join the expats in their miserable state of poverty.

[scot47]

The Plump One is displaying that chip on the shoulder again !

[veiledsentiments]

True... but I have to say that I agree with plumpy on this one. If they don't want to money to be spent outside the country, perhaps hiring locals to do all this work is the answer. Otherwise, if they want to continue to import expats to do all the dirty work for them, they shouldn't be whinging about what said expats do with their limited remuneration.

VS

[scot47]

They are more likely to replace teachers with locals than get the "Shebab" to start working as cleaners !

Watch out for your job being Saudi-ised. That day will come.

[jaffa]

Like plumpy says, if they bring in such an insane law only the truly desperate will stay.

It's all about jealousy. The (worthless) Saudi secretaries where I worked steamed with rage over my way better salary, but, hey, I was doing something, they weren't. And when I finished up my finances with the bank, the tellers couldn't disguise their anger.

[MixtecaMike]

[scot47]

I await the arrival of the Moors and Saracens.

[bertonneau]

According to the Saudi Aramco accountant that works where I work, at present oil price levels and at the rate Saudi is pulling money out of their reserve currency fund they will be broke in about 2 years. This obviously depends on a lot of factors. Given the huge amount of oil available on the market it seems unlikely unless something catastrophic happens that oil is going to be jumping too high in the next decade. Enjoy what's left of the Saudi cash cow ride here, it seems soon to come to an end. Wages are already going down and will continue to. I think PlumpyNut is spot on, but time will tell.

[plumpy nut]

If true (not so sure) Allah be Merciful.

[nomad soul]

More on the topic...

Expats in KSA remitted SR1.4 trillion in 22 years
By Khalil Hanware, Arab News | 13 August 2015
Source: http://www.arabnews.com/featured/news/790656

JEDDAH: Expat remittances from Saudi Arabia rose by five percent or SR4.1 billion to SR81.6 billion in the first six months of this year compared with SR77.5 billion in the same period last year, local media reported.

Expatriate workers in the Kingdom have sent home around SR1.42 trillion in the past 22 years (From 1994 to end-June 2015), according to data and analysis carried out by Al-Eqtesadiah. Last year (2014) saw the highest-ever value of expatriates’ remittances, which surged by 3.6 percent or SR5.3 billion from SR148 billion in 2013 to SR153.3 billion.

Commenting on the latest figures, London-based James Reeve, deputy chief economist and assistant general manager at Samba Financial Group, said: “The increase is not large enough to have a major effect on the Kingdom’s balance of payments, which is dominated by trade.”

Said Al-Shaikh, group chief economist at the National Commercial Bank, told Arab News: “The pace of economic growth will moderate over the coming few years which will mean the demand for labor will be lessened compared to huge demand from 2004 to 2014. Accordingly, the level of growth in remittances will slow down.” He said: “The increasing Saudization will also lessen the rate of growth of remittances.”

John Sfakianakis, Middle East director at Ashmore Group, commented: “Expatriate workers have for decades assisted the development of the Saudi economy. The development and construction of the Kingdom wouldn’t have happened had it not been for foreign workers since the early 1970s. Arab workers as well as millions from the subcontinent and Asia have helped the country move forward.”

In June this year, the Al-Eqtesadiah report stated that expatriates in Saudi Arabia transferred an amount of SR13.2 billion to their home countries, down three percent or SR413 million from the SR13.6 billion recorded in the same month last year.

(End of article)

[MixtecaMike]

[bertonneau]

As I said, time will tell, but when an accountant from what I refer to as the "Mother Ship (Dhahran Campus)." that basically runs this entire country tells me that, I'm going to listen. I think in 2-3 years we are going to be watching things happen here that these people as a whole are oblivious to. Prince Al Talal warned of this a few years back, but about no one seems to be listening, so get your cash while you can. It's not going to happen overnight, but as food, rent, gas and all prices start to rise and Saudis continue to Saudize as fast as they can they are in their pathetic way preparing to brace for what is probably going to be the sh*tstorm that's going to hit this place in a few years. Throw on top of that a population that's doubling at an insane rate and it's inevitable. It's actually a good thing. These folks are simply going to have to live by their own means again and as a more regular market based economy, but it's simply not going to do much for our paychecks or jobs. UAE and Kuwait are already starting to impose taxes on businesses that didn't exist before. Saudi will come soon.