DUBAI, October 28, 2008 (AFP) – Cheaper oil prices may damage the economies of non-oil producing Arab countries because of a fall in remittances and other cash inflows from the Gulf states, analysts said.
Remittances sent home by migrant workers contributed three billion dollars or 20 percent of gross domestic product in Jordan last year, according to World Bank statistics.
In Lebanon, remittances totalled 5.8 billion dollars or 23 percent of GDP and even in the larger economy of Egypt the 5.9 billion dollars in remittances were equivalent to five percent of GDP.
Not all of these remittances necessarily originated in the Gulf, but these countries have large communities in the region.
“They send home a lot of foreign currency,” economist Khaled Alloush, the Dubai-based representative of the United Nations Development Programme, said in reference to Arab expats in the Gulf.
The impact of an economic downturn in Gulf countries could be even worse for millions of south Asian workers, who make up the bulk of the labour force in the area.
Ibrahim Saif from the Carnegie Middle East Centre in Beirut said there could be a loss of jobs as lower oil prices cause producer countries to sc