x Abu Dhabi, UAESaturday 22 July 2017

Cost of remitting money is cheapest in the Middle East, World Bank says

The average cost of sending $200 home is about 9 per cent globally, but falls to 6.6 per cent in the Middle East, or almost half the cost of remittances in sub-Saharan Africa.

The cost of sending money home is cheaper in the Middle East than anywhere else, a World Bank study has found.

The world’s 232 million international migrants are expected to remit earnings worth US$550 billion this year, according to the World Bank’s Migration and Development Brief.

The developing world would receive about $414 million in migrant remittances this year – a 6.3 per cent rise on last year, the report said.

The average cost of sending $200 home is about 9 per cent globally, but falls to 6.6 per cent in the Middle East, or almost half the cost of remittances in sub-Saharan Africa.

India receives more in remittances than any other country, with an estimated inflow of $71bn. China is in second place at $60bn, followed by the Philippines at $26bn.

Egypt receives more remitted funds than any other economy in the Middle East.

“Remittances to Egypt have nearly tripled since 2009 to reach $20bn in 2013 and are now three times larger than revenue from the Suez Canal,” the report said.

The displacement of refugees in Syria might be a likely spur to future inward remittances as people send more funds to relatives at home, the report said.

In 2010, the last year of official data from the country, Syria received $1.6bn in remittances.

The World Bank also highlighted the recent “unwelcome development” of so-called lifting fees by many banks on incoming transfers.

This means that the fee paid by the recipient is additional to the one already paid by the sender.

So the total cost of sending $200 from the United States to Kenya can be as high as 16 per cent.

Some 19 million migrants from the Middle East and North Africa are now living abroad, according to UN data released last month.

It shows there are some 712,000 Egyptians now living in the UAE and a further 1.7 million in Saudi Arabia.

Last week Bloomberg News reported that the Ministry of Finance had sent a circular to banks proposing a levy on remittances, citing unidentified banking sources.

But local business have dismissed any such plan as unfeasible.

“The country has a free economy,” Yousef Obaid Al Nuaimi, the chairman of Ras Al Khaimah Chamber of Commerce and Industry, told The National last week. “Any person who works in the country, employee or owners, when they first came they came knowing it was a free economy without taxation. So I do not think this idea would be welcomed.”

The Ministry of Finance was unavailable for comment.

scronin@thenational.ae