When the news broke last week, it spread throughout the global expat community like wildfire. And what caused this furore? It appears that the celebrated Adel Fakieh, Minister of Labour, announced that the government was considering capping the remittances of expatriates to their home countries. In layman’s terms, the Saudis are going to put a limit on the amount of money you can send home. Surely not, I hear you say, but it’s the truth – well, it is at the proposal stage – but there is no doubt it, they’re coming after your money!
The government had raised the issue because it was/is concerned that the 8 million expat workers in the kingdom are not spending the bulk of their incomes inside the country which it says is hurting the Saudi economy. Oh dear, it’s hurting their economy! And what does all this money total? Remittances from Saudi Arabia to other countries last year were reportedly around SR100 billion ($27 billion).
What all this boils down to is the Saudi economy is on shaky ground. Okay, it may have the biggest oil reserves in the world but if we are entering a recession, there won’t be the same demand for oil and oil sales will drop and therefore a drop in oil revenues into the country. So one way to reduce the balance is to stop expats sending all their money home thus forcing them to spend more money in the country. Is this real? Can the massively, stinking rich Kingdom of Saudi Arabia really hurting that bad?
What annoys me is that if it hadn’t been for the efforts of the millions of foreign workers in the country, Saudi Arabia would be a backward State on a par with any country in sub-Saharan Africa. As one who spent five years in Saudi, I feel that in a miniscule way, I also contributed to the development and success of the country. But if I were still working there, and if this madness is passed into law, then I’d be on my bike to hell out of there! I mean Saudi Arabia is generally regarded as one of the worst countries for an expat to make a living. And to have to put up with having limitations on how much of your salary is sent home, then I think I’d be looking for alternative employment.
One Saudi commentator summed it up thus: “According to 2010 statistics, there are about 8.4 million foreign workers in the country, representing 31 percent of the entire population. A total of six million workers are employed in the private sector. This shows the extent to which foreign workers are contributing to the growth of the Saudi economy,” he said. “The Minister of Labour has not clearly outlined what is going to happen, whether it is a system to monitor all bank accounts of foreign workers and capping financial transfers, or whether it will be some form of legislative oversight to prevent violations of the country’s labour laws.”
Is this all about greed, then? It sure as hell is and as is the case with all those Middle East Kingdoms/Sheikdoms - whatever you want to call them - the ruling families absolutely glorify in unbridled riches beyond most of our dreams. So let's put it into perspective. Saudi Arabia's current weekly revenues from the sale of oil could reach more than $14.5bn a week if world crude prices continue their upward trajectory and reach a level of $120 a barrel, as predicted by Goldman Sachs.
Saudi crude production hovers around 10.7 million barrels-per-day (bpd) but by the end of this year, sustainable capacity is due to be increased to 12.5 million bpd.
Peter Burnett chief executive of UBS Investment bank in the Middle East and North Africa, which has just received a licence to operate in the kingdom, says: 'They have petrodollars flowing in and are in the process of enormous wealth creation.'
Saudi's GDP increased to 11.9% this year and this is reflected in Saudi oil exports reaching SR1.13 trillion ($302 billion), and non-oil exports to total SR150 billion ($40 billion) in 2011. This is the highest oil export figure for Saudi Arabia in its history. In other words the Kingdom of Saudi Arabia is enjoying a daily income of $1 billion a day! But, guys, they still want your expat money - so the choice is simple, if this voracious law is passed, you either stay in the Kingdom and maybe only send back about 80% of your earnings, or you do the sensible thing, find alternative employment and do a runner . . .
No comments:
Post a Comment