RIYADH, 17 November 2003 — Expatriate workers in Saudi Arabia drained a staggering SR285.3 billion ($76 billion) off the Kingdom’s economy during its last five-year development plan, senior economists and bankers said here yesterday, but the remittances from Saudis do not lag far behind.
“The high costs of recruiting Saudis should not dissuade the government from taking measures to force the private sector to hire Saudis and gradually dispose of foreign workers,” said Ihsan Buhulaiga, a well-known economist and member of the Shoura Council.
A study conducted by Buhulaiga has revealed that such measures are needed to achieve the government’s target of creating more than 800,000 jobs for Saudis during the present 2000-2005 development plan.
But it is not only expatriates who repatriate funds. “Saudis have also been remitting money abroad,” said Brad Bourland, chief economist of the Saudi American Bank (SAMBA), while quoting figures from the Saudi Arabian Monetary Agency (SAMA).
Bourland told Arab News that the personal remittances sent by expatriates totaled SR39.2 billion last year while the total personal remittances by Saudis exceeded SR21 billion during the same period. He added that remittances sent by expatriates to their home countries have declined since 2001.
Asked about the reasons for remittances from Saudis, Bourland said that many Saudi citizens who have been remitting money to foreign countries on a regular basis have children studying abroad. He added this wealth could contribute to the national economy if the volume of remittances was gradually reduced.
“Indians alone, who represent the largest foreign community in Saudi Arabia, have been remitting SR15 billion annually to India,” said a senior manager at Saudi Hollandi Bank. Total remittances from Indians from the six-nation Gulf Cooperation Council (GCC) exceeded SR37 billion annually. This has been a substantial help to the Indian economy, he added.
Remittances sent by other major foreign communities in Saudi Arabia are also sizable. In return, investment from foreign workers in the Kingdom has been negligible, according to a Saudi banker. He also said the final employment figures at the end of the sixth five-year plan period showed that the target of employment of Saudis was not met.
“We should not forget that Saudi Arabia is spending billions on foreign labor,” Buhulaiga said in his study. “Remittances sent by the foreigners account for nearly 68 percent of the total funds allocated during the sixth plan to achieve its targets of development and employment of Saudis.”
Buhulaiga, the author of several books on the Saudi economy, said such transfers constituted a serious drain on the domestic economy as the Kingdom is struggling to cope with a sharp decline in its oil income and consequent fiscal deficits.
Heavy transfers by Saudi Arabia’s foreign community of more than seven million people have allied with receding oil income and a rapid growth in its population and development needs to put pressure on its budget and current account and force the government to borrow to bridge the shortfalls.
The government is also under heavy pressure to find jobs for its growing citizenry to prevent unemployment from spiraling out of control and causing social upheaval.
Unemployment is officially put at 9.66 percent “and it could further widen unless the government takes serious measures to spur economic growth and force the private sector to employ Saudis and reverse its attitude toward the less costly foreign labor,” said the study.
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