Times of Oman
Nov 26, 2015 LAST UPDATED AT 10:40 PM GMT
Expat remittances not likely to fall in near future in Oman: Bank source
July 18, 2014 | 12:00 AM
Photo supplied

Muscat: The amount of money that foreign workers in Oman send to their home countries each year is not expected to decrease in the near future, given the country's current needs for an expat workforce, according to a bank source.

Speaking to the Times of Oman, the source noted that the increase in remittances from the expatriate community in Oman is 'natural', considering the large number of foreign workers in the private sector.

A recent report by the Central Bank of Oman (CBO) showed a 12.6 per cent growth in remittances from the Sultanate, standing at OMR3.502 billion in 2013, compared to OMR3.109 billion in 2012.

"Like other GCC (Gulf Cooperation Council) countries, business in Oman is growing and there is a need for expatriates, especially in the construction sector," the bank source said.

The number of expat workers in the private sector was some 1,527,000 workers in 2013, compared to 1,316,000 in 2012.

"The trend is expected to continue and you cannot expect a sudden decrease in foreign remittances in the near future. The amount may be reduced only after the percentage of expatriate workers is reduced to 33 per cent, as decided in the recent plans," he added.

Training nationals
He also said that the deeper implication of the latest statistics is that there is a need to train nationals in all sectors so that the Omanisation process can be implemented properly.

Commenting on imposing taxes on remittances, he said, "Nothing is clear yet, but there is a possibility of applying new rules."

The authorities should be approached to see whether they plan to introduce a remittance tax in the future, he said.

A remittance tax was recently proposed by the financial committee of the Majlis Al Shura as an alternative source to reduce the budget deficit, but later Darwish bin Isma'eel Al Balushi, Minister Responsible for Financial Affairs, said a tax was unlikely to be introduced by the Oman government due to its negative effects.

"It requires detailed study, especially when countries in the region do not introduce such a tax," the minister said in January.

Global trend
The World Bank's latest issue of the Migration and Development Brief, released in April, said that international migrants from developing countries are expected to send $436 billion in remittances to their home countries this year, despite deportations from some
host countries.

This year's remittance flows to developing countries will see an increase of 7.8 per cent over the 2013 volume of $404 billion, rising to $516 billion in 2016, according to revised projections from the latest issue of the brief.

Global remittances, including those to high-income countries, are estimated at $581 billion this year, from $542 billion in 2013, and expected to rise to $681 billion in 2016.

During 2013, remittance flows were generally robust in all regions, except Latin American countries, the Middle East and North Africa (MENA), thereport said.

India tops
India remained in the top spot, with $70 billion in remittances in 2013.

In the Middle East and North Africa (MENA) region, remittances are estimated to have fallen by 2 per cent in 2013, as a drop in remittances to Egypt more than offset modest growth in the rest of the region.

Despite oil prices remaining firm and underpinning the economies of the Gulf Cooperation Council (GCC) countries, departures and deportations from Saudi Arabia and other disruptions are hurting remittance flows.

About 300,000 migrants returned to Egypt from Saudi Arabia in the second half of 2013, precipitated by a sharpened labour inspection campaign and set amnesty period.

To get in touch with the reporter elham@timesofoman.com

Subscribe to our newsletter and be the first to know all the latest news