Remittances, which are essentially the money earned abroad and sent home by expatriate workers to their families, are the backbone of some economies outside the Gulf.
Remitted funds are mainly used to cover the costs of basic expenses of dependents, including housing, food, education and medical bills. They also boost investments, savings, retirement and emergency funds that migrants set aside to secure their financial future.
Between April in June this year, foreign workers in Dubai and the rest of the UAE moved Dh44.4 billion in funds to their home countries, according to the latest figures released by the UAE Central Bank.
A huge chunk of the money, more than 55 per cent, landed in the pockets of beneficiaries and personal bank accounts of expatriates from India, Pakistan and the Philippines.
India bagged the lion’s share (39.6 per cent) of the transferred funds or approximately Dh17.6 billion, followed by Pakistan, which received 8.5 per cent or an estimated Dh3.8 billion, and the Philippines, capturing 7.1 per cent or Dh3.2 billion.
Remittances from the UAE to other Asian countries, particularly India, have recently spiked as expatriates take advantage of the strengthening of the US dollar. Due to the rise in the American currency, foreign workers are able to send more money out of their dirhams.
“Remittances to Indian have been on a rise since the beginning of this year and this trend is likely to continue,” Sudhesh Giriyan, COO of Xpress Money, said in August.
Top 5 remittance destinations for UAE
(Value of money transferred overseas between April and June 2018)
1. India: 39.6% (Dh17.58 billion)
2. Pakistan: 8.5 % (Dh3.77 billion)
3. Philippines: 7.1% (Dh3.15 billion)
4. Egypt: 5.4% (Dh2.39 billion)
5. United States: 4.4% (Dh1.95 billion)
Total personal remittances: Dh44.4 billion
The figures released by the Central Bank are based on outflows reported from the exchange houses and banks across the UAE. The data showed that total expat remittances in the second quarter were higher by 8.8 per cent or Dh3.6 billion compared to the same period of 2017.
Currency exchange outlets handled the biggest share of remittance transactions, at 78 per cent, while banks only processed 22 per cent of the money transfers.
The UAE is home to millions of foreign workers, accounting for the majority of the country’s 9.27 million population. A big proportion of the expatriate communities are from Asia and non-Arab countries.
According to the Central Bank report, the most important country of destination for remittances during the second quarter of the year was India, and this correlates with the huge share of Indians in the UAE population.
Data from the Federal Competitiveness and Statistics Authority showed that as of October 2008, 82.7 per cent of the employees in UAE belong to Asian non-Arab countries.
Source: Gulf News