Saudi remittances to Egypt and Syria nosedive as political instability continues
Political turmoil in Egypt and Syria has reduced the amount of remittances from Egyptian and Syrian residents in the Kingdom due to the uncertain political future of these countries.
Remittance from Egyptian residents was SR3 billion before the revolution in 2011. According to economic experts, the remittances were 30 percent less last year.
Five percent of Egyptian residents have stopped investing their money in their country due to the political instability following the revolution. However, Egyptian residents in the Kingdom annually transfer around SR2 billion to their families in Egypt, and they will continue to do so,” Taha Kosbah, economic adviser of Business Media, said.
“Egypt’s economy has also been affected by the return of 70 percent of Egyptian workers from Libya in 2011. They transferred annually about $100 million to their country,” Kosbah added.
Syrian residents in the Kingdom annually transfer around SR1 billion to their country. However, the political turmoil in Syria contributed to a reduction of their financial transfers by 20 percent in 2011, according to estimations made by economists.
Faroq Al-Khateeb, senior economy professor at King Abdulaziz University, predicted that there would be many Syrian residents in the Kingdom to invest their money in Saudi Arabia.
“Syrian residents would be involved in local business projects in partnership with Saudi businessmen. Syrian local investments are currently estimated at SR900 million,” Al-Khateeb said.
There are around 900,000 Egyptian residents and 100,000 Syrian residents in the Kingdom. The majority of them work in major companies as engineers, project mangers, accountants and doctors.
“I would normally invest SR100,000 annually in a business project in Egypt. Now I have to stop thinking of business activities until the country is stable again,” Mahmoud Al-Jammal, an Egyptian resident who works as an architect in Jeddah, said.
“Many Egyptian residents in the Kingdom invest their local savings in small and medium projects, such as restaurants, stock market and small construction companies. The business situation in my country does not currently encourage us to transfer our savings. However, I expect that my country will be stable after a short time,” Al-Jammal added.
“I am planning to open a restaurant in Syria. However, I am worried, due to my country witnessing a political turmoil. I cannot continue to transfer my money to Syria,” Ahmed Khattab, a Syrian resident working in the Kingdom, said.
“I have SR200,000 in local savings. I will invest it in the tourism sector in Syria after the turmoil there ends.”
- Cost of remittances from the U.S. fall to 10.19 percent in Q2
- Remittances and Migration crucial to combating macroeconomic imbalances and labor market issues in the MENA Region
- S&P report assesses risks to MENA countries' xxternal balances from falling remittances
- Israel - the real winner of the Arab Spring?
- The Arab Spring Economic Report