Billions more sent home in remittances Read article
Billions more in remittances sent home by workers
Foreign workers have been sending home some Dh10 billion (US$2.72bn) a month since the start of the year, as much as Dh1.5bn more than in the same period last year, as an improving economy and unrest in parts of the Middle East help spur the money transfer industry.
An extra 10 to 15 per cent more money has been remitted abroad in the first quarter compared with the same period last year, said Mohamed al Ansari, the chairman of the UAE's Foreign Exchange & Remittance Group (FERG), which represents companies involved in the money transfer sector.
"There's a good percentage going to the Indian subcontinent but there's been increased flows to the region. History shows when there's unrest and fluctuations in currencies it attracts money in and out," said Mr al Ansari, who is also the chairman and managing director of Al Ansari Exchange, one of the biggest providers of exchange services in the Emirates.
The Indian subcontinent and the Philippines, traditionally the biggest destinations for foreign transfers, were responsible for the bulk of outward remittances in the first quarter, he said.
But evidence also suggested more people were sending money home to support families and friends in countries in the Middle East and North Africa region beset by recent protests or conflict. Transfers from workers overseas are a vital source of funding for economies seeking to rebuild after unrest.
Flows to countries afflicted by unrest had picked up, particularly to Egypt, as well as Morocco, Syria and Jordan, said Mr al Ansari. Fewer expatriates in the UAE from Tunisia and Libya meant there was less money flowing to those countries, he said.
Volumes of remittances also provide a useful gauge of the health of economies in source countries.
Increasing remittances mirror other recent data pointing to improvements in the UAE labour market. Job creation in the non-oil private sector accelerated last month at its fastest for 15 months, according to HSBC's purchasing managers' index (PMI).
Remittance flows grew by more than 10 per cent last year as the economy stabilised. Job losses as a result of the financial downturn led to a drop of between 10 and 15 per cent in remittances in 2009, compared with 2008.
* with additional reporting by Gregor Stuart Hunter