Economic growth from remittance [Archives:2005/895/Business & Economy]

November 17 2005

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If there is one thing Yemen continues to export throughout its lifetime that would be people. Yemeni immigrants continue to stretch across the globe with an estimation of over 6 million Yemenis abroad, spreading from Southeast Asia, to the United States of America. An example that can illustrate the magnitude of this Yemeni phenomenon was in the forced return of around 800.000 immigrants from neighboring Gulf States at the time of the 2nd gulf war.

Yemen is an exorcist country in the sense that it drives its citizens to migrate to other parts of the world in search of better wages to pay for a better life for their selves and for their families back home, even if it meant illegal migration and having to cross borders risking their very own lives. Usually these illegal immigrate belong to the 10% of the population (around 2 million) who live on as little as 3% of the country's GDP of 16200 million (i.e. 486 million $US), meaning that each individual of these 2 millions have to survive on approximately 66 cents per day.

Yemeni immigrants are a part of the global movement of poor migrant workers who leave home and travel to richer countries searching for employment. Worldwide it is estimated that the total amount of remittance reaches a staggering two hundred billion dollars a year, out of which Yemen's share is 1,437 million US$.

One out of every ten people on the planet either sends or receives money from abroad. And unlike all other forms of financial aid that travels into developing countries, remittances go directly to poor people who need it the most, therefore assuming that at half of all remittance sent to Yemen goes to the poorest 10%, this allows each of these 2 million to live on 1.65 US$ per day, but still not enough.

For remittance receivers, remittances create a safety net that feeds, clothes, and provides medical attention for impoverished families, putting less obligation on the state to look after the poorest layers of the community and more freedom on the state to engage in any kind of less responsible activity or wasting the country's resources.

Remittances have been around for generations upon generations, however, the government has to be doing a much better job than they have been doing over the past 20 years, it is important to underscore that remittances are not a substitute for sound economic policies that aims at improving the lives of poorest families which do not receive any remittances and have to survive on 66 cents per day.

In addition to that, there is a critical shortage of jobs and a considerable gap between rich and poor. In 2002 the richest 10% of the population consumed 26 % of the country's wealth while the poorest 10% merely survived on 3 %. Therefore success for youngsters from the poorest 10% means either resorting to crime or immigration to bigger cities and wealthier countries in search of a better life in a different country, leaving their wives, children and families behind, who would, in turn, become dependent on remittance money for mere survival.

Nevertheless, Consider youngsters who resemble half of the population; how can a million impoverished young men and women strive for a better life at all? This, in itself, might explain the drastic increase in crime in Yemen, and several tremendous social impacts such as family dislocations, touristy and temporary marriages, child trafficking and gang-like activates coupled with the rise of organized crime factions.

There is a pattern in Yemeni worker immigration, for example, the people of Hadhramout have deep routes in Southeast Asia in countries such as Indonesia and Malaysia, while others from Ibb & Taiz have immigrated to the United States of America, in fact, there is a considerable community of Yemeni immigrants in Detroit, Michigan, where good wages allow their remittance to be substantially considerable and make a difference in the lives of their families and communities back home through investments, as over 80% of all investments in Yemen are done by Yemeni immigrants as an attempt for wealth creation.

The government of Yemen have systematically cried out for Yemeni immigrants to invest back in the country in various sectors, today total investments in Yemen are as little as 1.1% of the economy and factors such as poor governance and corruption continue to discourage Yemeni immigrants even further from investing in Yemen; the country that repelled them and forced them to leave in the first place, indicating the very little trust immigrants have in the current economic policies of the country.