Remittances in GCC Countries



Remittances in GCC Countries

Introduction

Remittances, in their most common usage, are the transfer of a portion of a migrant worker's wages back to his or her family. A more encompassing definition of remittances includes so-called social remittances: the sending of products (foodstuff, electronics, automobiles, etc.) and the transfer of ideas formed and beliefs adopted from migrant destination workplaces to native communities. In this entry, remittances will refer to the simple monetary definition.

Remittances are an important geographic phenomenon due to the sheer volume and extent of monetary flow from more affluent to poorer nations and the fact that they are disproportionately received by poorer members of these developing countries. Such wealth transfer allows households to make important economic decisions concerning health, education, occupation, and daily living conditions. In many poorer nations, remittances have been shown to effect broadscale poverty and mortality reduction through increases in household income and better access to health care.

With the rest of the world, Arab countries are in the world economic crisis. However, its impact, its influence is still very different, depending on each country and each sector. The Arab world is not a homogeneous reality. On the contrary, in the specific economic, political, geographic, social, population and culture of each country's characteristics, a region, in particular, varied, and the heterogeneity and complexity. The crisis in the Arab world, highlighting this complexity.

Discussion

The impact of the international financial collapse began in the fall of 2008, preliminary, based on its openness and participation in international financial markets is only relative, in some Arab countries. However, the decline in global demand, are a number of countries and industries have a significant impact on the merger in 2009. The slowdown spread, on the one hand, through the collapse of the international financial system, investment and credit constraints, but also by the decline in oil prices and reduce, in particular global trade, exports, tourism and remittances. In this sense, the IMF said in its October 2009, the main transmission mechanism "crisis" in the region has been "reduce remittances, foreign investment and exports (2004) final report.

The area affected is not one but several crises, from the importance of different aspects and different forms and extent, highlighting the structure and development of outstanding. Chief among these challenges is still extreme.

Remittances and Development

It has long been argued that remittances have not lived up to their potential as catalysts for development in poorer countries. Many early studies on the topic concluded that the bulk of remittances are used for family maintenance and consumption rather than as seed money to start businesses. While it is indisputable that remittances fuel consumption, some argue that their delivery to poorer communities does spur development as they cycle their way through local and regional economies. Even when remittances are used to fuel conspicuous consumption, it is argued that secondary and tertiary recipients (local vendors and suppliers) of remittance income will use this infusion of money to create or expand their businesses, which will have a positive impact on local ...