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Expatriates’ remittances show positive growth

May 15,2016 - Last updated at May 15,2016

The flow of remittances of Jordanians working abroad was expected to decline, especially when the majority of expatriates are in the Gulf states whose economies are badly affected by the shocking drop in oil prices, which is the main source of income for the Gulf countries.

Practically, no actual reasons existed for such reduction in remittances, as not a single expatriate lost his/her job as a result of economic difficulties.

On the contrary, there seems to be more demand for Jordanian experts in the Gulf, in the engineering, medical, security, education and other fields.

Not only did Jordanians not lose their jobs due to the petroleum crisis, none was subjected to a reduction of the monthly pay either. 

Why, then, should the remittances decline?

One does not need to argue about the impact of low petroleum prices on remittances as long as the Central Bank figures tell that expatriates’ remittances were 1.3 per cent higher in 2015 than in the previous year.

Expatriates’ remittances are a major source of income. They are the most important source of badly needed foreign currency.

They feed the Central Bank reserve of foreign exchange and reduce the gap in the current account of the balance of payments.

Part of remittances goes to savings accounts or investments in real estate, but the bulk makes regular income for around 350,000 families.

Annual remittances are estimated to reach JD2.7 billion or $3.8 billion. This amounts to 10 per cent of Jordan’s gross domestic product, a source that exceeds all other sources of foreign exchange, including foreign loans, tourism receipts, incoming flow of foreign investments and national exports.

On the negative side, this business of expatriation is causing Jordan to lose its best qualified personnel on which the country spent a lot to educate and train.

In this respect, one can see the remittances as the economic return on the cost of investment in people.

A preliminary study by this writer, made several years ago, found that the return on the cost of education and trading is equal to 9 per cent a year.

Using this result, one can estimate the cost of the investment made in half-a-million expatriates to be to the order of JD30 billion.

On the other side of the coin, the extensive attrition of qualified personnel on this scale will eventually make Jordan face a problem.

These expatriates will sooner or later come back to the country when Jordan’s labour market will not be ready to accommodate them.

Perhaps we should not worry ahead of time. 

The future is in constant change. 

We might be able to adjust and overcome the problem of unemployment and the resulting distortion in the structure of the labour force, as we will have a huge surplus in skilled labour ready for export to the Gulf and shortage in manual labour for which we depend on guest workers from Egypt and Syria.

Jordan is one of the rare countries which is at the same time an exporter and an importer of labour.


It sends some 40 per cent of its labour force abroad and imports more than one-third of its domestic labour market.

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