Are immigrant remittances flows in Gulf Countries Sources of Capital for development?

[Name of instructor]

Abstract

Workers' remittances have become an important source of capital for the developing countries. Many nations take advantage of remittances in order to develop and maintain their economic stability. The paper starts with the introduction, followed by the objectives of this study and hypothesis. The paper will also examine the recent trends of remittances in developing countries. The paper will also focus on the impact of remittances from the gulf countries in other developing nations of the world. The last section will contain the impact of worker remittances on host and home country, followed by the conclusion.

Table of Contents

Introduction1

Objectives of the study2

Hypothesis3

Overview of immigrant remittances in gulf countries3

Recent trend in remittances in the gulf countries3

Remittances as sources of capital in gulf countries6

Literature review10

Impact of workers' remittances from the GCC in other developing countries10

Impact of workers' remittances on home countries13

Impact of workers' remittances in host countries15

Methodology15

Conclusion17

References18

Are immigrant remittances flows in Gulf Countries Sources of Capital for development

Introduction

The economic remittances are an important growing source of foreign exchange for various developing countries of the world. Currently, the remittances received by the developing countries are double than the aid provided to them by the international monetary fund. Over the years, the developing countries have experienced a huge increase in the remittance inflows from the international and developed countries. These remittances contribute to the foreign reserves of many developing nations all around the world. These remittances amount more than the official aid and the private capital inflows provided to the developing countries. Therefore, remittances have become an attractive source of foreign earning for most of the developing countries. Remittances inflows are more stable and have a positive impact of the economic growth of the developing countries. (Johnson & WhiteLaw, n.d)

According to the world bank and the international monetary fund, the remittances sent through formal and informal channels are 50% more than the official aid provided to the developing countries. Since remittances are based on the personal transaction from migrant's accounts to their friends and families, they also tend to fulfill the needs of their recipients. Remittances not only contribute to the development t of many developing nations, they also have the ability to reduce poverty and promote human development. Remittances help in increase the income of many households in many developing countries. Remittances, by provide monetary benefits to the poor people, they also have an impact on the poverty and the welfare through the indirect multiplier effect and also through the macroeconomic affects. (Chaudhary, 1993)

Regression analysis has been conducted in many developing countries and it has been concluded that remittances have a positive impact on the economic growth of the country. It also serves a huge source of investments that can be further utilized for development in various areas of the nation. Remittances have always been associated with increase household investment in education, health and entrepreneurship. All of these factors have a tremendous high social return in most circumstances. At the macroeconomic level, ...