Yemeni Expatriates, Remittances and Sustainable Development

By: Moneer Al-Omari*

According to the General Directorate of Passports at the Saudi Ministry of Interior, about 450,000 illegal Yemeni immigrants have been allowed to correct their residency status in the kingdom and to legally work in public and private establishments in the Kingdom of Saudi Arabia by August 2015.

Based on the findings of the latest National Census for Population, conducted in 2004, there are over 1.8 million Yemeni expatriates and they by then accounted for about 5% of Yemen's overall population. This figure is, by all means, very high if compared to the world average of 3.2%.

Nevertheless, caution should be exercised when using these census statistics given  the fact that this census was conducted a decade or so ago and that there are no recent statistics about the accurate number of expatriates, especially when a large number of Yemeni people traveled outside the country for work over the last 10 years and also when the Yemeni government does not keep any records of expatriate nationals.

Some studies, however, suggest that there are currently over 3 million Yemeni expatriates who  are working outside the borders and this figure is relatively large, and hence they account for about 11% of the country’s overall population.

The World Bank statistics show that the overwhelming majority of Yemeni expatriates live and work in Saudi Arabia (about 1 million expatriates), followed by, and yet with a huge difference, UAE (60,000) and the USA (58,342). The three countries top the list as destination countries that receive international foreign workforce and immigrants.

The assets held by the Yemeni expatriates is estimated at 60 to 100 billion which is a huge figure compared to the country's decent GDP and budget. The savings by the expatriates' families are estimated to be billions in form of gold or cash and these savings are kept at homes.

Clearly, the consecutive political leaderships and governments have continuously failed to make use of this wealth or attract the Yemeni expatriates and immigrants to invest inside the country.

Brain Drain

The recent political and security problems have forced thousands of well-qualified Yemenis including doctors, engineers, intellectuals and university professors to leave the country in search for better opportunities and a secure life in GCC countries and beyond.

The growing security, political and economic instability has exacerbated over the last five years and this has led to a massive brain drain of highly qualified and experienced people.

Although they exist no accurate figures about such brain drain, experts believe that thousands of highly qualified people including doctors, engineers and university professors have left the country over the last few years, most specifically during the last two years.

Most of those highly qualified people prefer to go to GCC countries. Others, though a few, leave for Europe and America and some other countries.

Yemeni Emigrants

Yemenis used to go beyond the borders in search for better life and job opportunities. Yemeni expatriates and emigrants in the past went south-west to Africa including Djibouti, Ethiopia, Tanzania, Kenya, etc.  Others, especially from Hadramout, preferred to head to South-East Asia and today Yemen has large communities in Indonesia and some nearby countries. During the 50s and 60s, a good percentage of Yemeni migrated to the United Kingdom.

Early travels of Yemenis were meant for living in the destination countries. But this was not the case for most of expatriates during the second half of the 20^th Century where most people traveled for GCC countries, during the oil boom, in search for work opportunities.

As is the case with expatriates, there exist no accurate statistics about the number of Yemeni emigrants who have already acquired the nationality of the destination countries. A large number of those emigrants who have their origins in Yemen forms now the second or even the third generation. 

Nevertheless, some statistics put the figure at 5 million and most of these emigrants live in South East Asia, East Africa, etc. Some of those emigrants, especially in South East Asian countries, are successful businessmen and others have assumed leading political posts in their host countries.  

Links and connections with the origin country, Yemen, for the majority of these emigrants are nonexistent. This is because the government has done little or nothing at all to link such people to their origin country.

Although there is no official data on the volume of assets held by the Yemeni emigrants, some experts stress that they have huge financial and non-financial assets. Should the economic and political conditions were good enough, those emigrants could have come and invested their money inside Yemen. 

Expatriates’ Remittances

Remittances by Yemeni expatriates abroad are estimated to be $3.4 billion of which 90% goes to consumption and spending on education and healthcare services. Only 10% goes to investments.

The jobs of expatriates abroad provide a source of income for the expatriates themselves and their remittances are a source of income for their families behind at home. These remittances have also a positive impact on the national economy since they provide a source for hard currency, state revenues and contribute to the country's economic and social development.

According to a World Bank study, Yemen ranks fifth among the least developed countries in terms of the magnitude of expatriates' remittances and it is ranked 7^th in the MENA region, after Lebanon, Egypt, Morocco, Jordan, Algeria and Tunisia respectively.

Expatriates' remittances are highly important and they positively impact the national economy. These remittances are also a source for hard currency and it is widely held that such remittances in foreign currency have helped prevent the depreciation of the Yemeni currency, the Rial.

When only 20% of poor people benefited from the international donor support, the remittances touches very directly on the lives of poor people, which means that remittances are more effective and better targeted than donor support.

Given the fact that the estate failed to offer the right facilitation and incentives, about 50% of remittances are sent through informal channels and this negatively affects the national economy.

Although most of these remittances go for supporting the families of these expatriates back home and they are mostly meant for consumption and spending on healthcare and education services, the majority of expatriates prefer to invest their savings and deposits in building own houses. Very few emigrants would opt for investing. However, most these investments are channeled to real estate, given this sector does not have inherent risks.

  

Politics and Expatriates

Politics has a negative effect on expatriates. This can be evidenced by the 1^st Gulf War. The crisis motivated GCC countries to fire over one million Yemeni workers in 1990 and 1991 in retaliation for the Yemeni regime backing Saddam Hussein whose army invaded Kuwait in August 1990.   

The collective return of millions of Yemenis has heavily strained the ailing national economy and put further strain on the underdeveloped infrastructure and the limited public services (schools, healthcare facilities, road infrastructure, etc.).  

Yemen's political stance during the Gulf War was therefore blamed for the first exodus ever of Yemeni expatriates in GCC countries when over 1 million Yemeni expatriates, including thousands of families, were forced to leave these GCC countries and get back home.

For this reason, experts stress that the country’s foreign policy and decision-making should be sensitive to the interests of expatriates in the destination countries and that politics should serve the best interest of national economy and not vice versa. 

Expatriates and Government 

Given the importance of this segment of Yemeni people, Yemen has recently introduced the Ministry of Expatriates' Affairs, but the Ministry is paralyzed and it is not playing any significant role in looking after the interest of expatriates, solving their problems or providing them with facilities and incentives to invest their money inside the country.

For this reason, experts direct sour criticism to the government for failing to pay enough attention to expatriates and to attract Yemeni emigrants and expatriates to invest in Yemen. They are also very critical of the role of the Yemeni embassies abroad. They stress that these embassies should play a substantial role in looking after expatriates, resolving their problems in the destination countries together with providing advice in terms of investment opportunities at home.

In return, the officials at the Ministry of Expatriates’ Affairs attributed this to the limited resources allocated to their ministry and the lack of interest on the part of the government.

Those officials further hold that it is difficult to develop sound policies for targeting and attracting immigrants and expatriates because they do not have accurate statistics and no census of expatriates and emigrants has been conducted. 

Recommendations

In order to revitalize the economy, the government should level the playground. Security, political and economic stability should be restored, given economic and security stability are preconditions for attracting investments.

The Law of Investment issued in 2010 is criticized by many experts who believe that more efforts should be made to amend it and to make it more compatible with the international standards, while making use of the success stories of countries that managed to excel in attracting investments. Additionally, Public-private partnership should be strengthened and the law for public-private partnership should be quickly passed.  

The law should provide unlimited incentives, facilitation and tax exemptions to Yemeni expatriates and migrants in order to attract them to invest inside the country.

Exporting skilled labor force to neighboring and other destination countries is thought to be important. However, a large proportion of expatriates lack the necessary qualification and skills required by the labor markets in destination countries.

Given the changing nature of the labor markets in neighboring countries and their search for skilled labor force, it is important to invest in qualifying and training those expatriates before sending them to those markets.

The government, donors and research institutions should work towards extensively studying the regional labor markets. They should also work towards providing facilitation, support and advise which are deemed necessary for encouraging expatriates to invest inside the country.

Reforming the whole state system, providing facilitation and incentives to expatriates and immigrants together with channeling remittances to investments are deemed necessary for achieving sustainable development.

* Moneer Al-Omari is the Director of the Social Research and Development Center (SRDC). He is also a member of the Yemeni Journalists Syndicate (YJS). He can be reached on: alomari@srdcyemen.org.  

Source: http://www.yemenpost.net/Detail123456789.aspx?ID=100&SubID=8321&MainCat=5