By Thalif Deen
UNITED NATIONS, Jun 23 1996 (IPS)

Foreign workers in Saudi Arabia send more money home to developing countries than all the financial aid provided by the world’s largest single donor, according to a new U.N. report.

The “Summary of Economy and Social Developments in the Middle East Region” reports that the outflow of worker remittances from Saudi Arabia increased from an estimated 15.2 billion dollars in 1994 to 17.2 billion dollars last year.

In contrast, Japan, the world’s largest single donor, provided 14.5 billion dollars in development aid last year followed by France (8.4 billion dollars), Germany (7.5 billion dollars) and the United States (7.3 billion dollars).

Mahbub ul Haq, who until last year served as principal author of the annual U.N. Human Development Report, says remittances from emigrants have become a major source of income for developing countries.

“They are better than development aid because they have no conditions attached and do not have to be repaid,” Haq told IPS.

Between 1990 and 1995, remittances from foreign workers in Saudi Arabia totaled about 100.3 billion dollars, an average of 16.7 billion dollars annually.

Among the major beneficiaries of this outflow are the Philippines, Egypt, Bangladesh, India, Pakistan, Sri Lanka and Jordan — countries that provide millions of skilled and unskilled workers to Saudi Arabia, Kuwait, Bahrain, the United Arab Emirates, Oman, and Qatar.

In some countries such as India, Morocco, Pakistan, Tunisia, Turkey, and Yemen, annual remittances outweigh official development assistance (ODA) by a third or more, according to the last year’s U.N. Human Development Report.

On an average, Turkey has been receiving about three billion dollars annually in worker remittances, compared with 1.5 billion dollars in ODA. In India, the estimates are 2.5 billion dollars and 1.8 billion dollars, respectively.

The 1994 Human Development Report points out that international migration has grown significantly in recent years. About 80 million people now live in foreign lands, and their numbers are rising steadily.

The Middle East, despite charges of deplorable working conditions, has been the biggest single market for Third World labour.

The new U.N. report on the Middle East — which will be presented to the Economic and Social Council at its meeting in late June — says the outflow of worker remittances has been so heavy that it continues to affect Saudi Arabia’s current account.

However, the growth of the oil sector, which accounts for more than one-third of the kingdom’s gross domestic product and more than 90 percent of its exports, boosted the economy last year, reducing the country’s internal and external imbalances.

Egypt is one of the largest beneficiaries of worker remittances, earning 4.7 billion dollars last year — up from 4.6 billion dollars in 1994. The total development and military aid which Egypt receives annually from the United States is almost half the earnings from Egyptian expatriates working in the Middle East.

According to the report, worker remittances to Jordan increased by 13 percent in 1995, rising from 1.12 billion dollars in 1994 to 1.26 billion dollars. From 1990 to 1995, Jordan’s total hard- currency earnings from remittances was 5.2 billion dollars.

Lebanese expatriates reportedly remitted about six billion dollars during the past two years, while the Gulf countries received two billion dollars in remittances.

“Although the Gulf countries are all labour receiving countries,” the report says, “unemployment is rising among the indigenous population in some of these countries.”

Factors contributing to this phenomenon include particularly high population growth rates, the preference of nationals to work only in the public sector, and a mismatch between qualifications of job seekers and the skill requirements for available jobs.

In an analysis of the overall economic developments in the Middle East, the report says the rise in oil prices led to increases in oil revenues in all of the 10 oil-exporting countries in the region. After falling by 5 percent in 1994, oil revenues in the region rebounded last year, growing by an estimated 9.3 percent. Total earnings from oil amounted to about 78.4 billion dollars, up about 6.6 billion from 1994.

Most of this increase, however, is attributed to the 8.7- percent increase in oil prices last year, not increased production.

The region’s gross domestic product, excluding Iraq which is still under a U.N. embargo, is estimated to grown by 2.8 percent last year, after expanding by just 0.8 percent in 1994. The total foreign debt of the Middle Eastern countries, according to the report, was unchanged in 1995, remaining at the 180 billion dollars.

“The region’s economy needs to grow at higher rates in order to register positive per capita growth rates,” the report warns, “and to be able to accommodate the rising number of new entrants into the labour force each year.”

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