The Role of Immigrants’ Remittances in Yemen’s Economy [Archives:2001/09/Business & Economy]

February 26 2001

Mohammed Hatem Al-Qadhi
Yemen Times
[email protected]
At last, the recommendations of several conferences on Yemeni immigrants and the importance of establishing a bank for them, seem to have materialized since a preparatory committee was established. It is headed by the famous Yemeni businessman Salem Ba-Ala, chairman of the Arab-Kenyan Association, besides including 20 other businessmen. Sources at the Ministry of Immigrants’ Affairs said that the ministry is preparing a draft study in collaboration with the Yemeni Central Bank about this project.
The idea of establishing a bank for immigrants has been one of the topics highlighted at several meetings and it’s potential role in the development process was discussed at the First Conference of Yemeni Immigrants 1999, Fifth Conference of Businessmen, 2001 and also at the immigration seminar held last January wherein several issues concerning immigrants, their investment and role in building up Yemeni economy etc. were discussed.
Yemen has around 4 million immigrants living in different parts of the world. They play a very significant and pivotal role in improving the economy of their country through their remittances which are a main provider and contributor to Yemen’s development and investment process since the 26th September Revolution. Those immigrants conducted several trade and investment projects all over Yemen let alone the activation of internal and external trade drive. Reports from the Ministry of Immigrant Affairs point out that the total amount of their remittances during the period between 1990-1998 reached $ 10 billion and 199 million and it has been estimated at $65 billion during the last three decades, around $ 30 billion of which flowed to the country from Saudi Arabia alone. Then comes Kuwait, UAE and Qatar.
But the Second Gulf War caused by the arrogance of the Iraqi leadership and the Somali civil war reduced the remittances due to the return of around one million immigrants. This put Yemen in a fix and exercised a lot of pressure on the already fragile economy of Yemen. The official statistics indicate that the immigrants’ remittances have gone down from $ 1,5 billion in 1990 t0 $227,4 millions in 1992. However, they improved since 1994 for the total amount of remittances registered at the Central Bank of Yemen moved up to $753 millions. This is because some of the returnees were allowed to go back to Saudi Arabia and other Gulf countries plus the remittances of those who stayed in Saudi Arabia during the past ten years.
We notice that around 81% of Yemeni immigrants live in Arab countries, mainly in Saudi Arabia which has 700,000 i.e. 81% of the immigrants in Arab countries. There are 500,000 in the United Arab of Emirates. The rest, 19%, are in other foreign countries.
It is now very clear that these remittances have a significant role in building up the economy of Yemen. They played a role in relieving the deficiency in the trade account to the tune of 71%. They also played a role in financing imports in 1990 to the extent of 79% and the exports in 1987 amounting 93%. This figure went down to 49% in 1996.
Economic studies also indicate that the remittances have a role in pushing forward the GDP for they added around 2% to it during the period between 1992 and 1997. This important contribution of remittances became visible during the degradation of the gross national product(GNP). The GNP was 20% in 1993 while the GDP reached 26% in the same year. Similarly, in 1994 the GNP picked up to 22% and the GDP was riding high, reaching 30%. The role of these remittances’ contribution to the GDP was at its best during 1995, 1996 and 1997. It hit the highest level in 1996, that is 22,2%.
As a matter of fact, these figures make clear how important the role of immigrants is in supplying the Yemeni economy with hard currency. Therefore, establishing a bank for them has become a must as it will serve these people, include their remittances as well as finance their projects and investments. However, the project of the bank should not remain only in the form of the preparatory committee. That is to say, it should materialize soon and see the light of day. The government can do a lot in this regard if it is taking the idea seriously. We should not leave everything for immigrants to handle. This is one point. The other is that the government should offer the immigrants more facilities and privileges and be always in good contact with them, not only when we think of their investments and remittances. It should provide a good atmosphere for them so as to enable them to invest their money. In fact, it should make Yemen SAFE to attract more investors from abroad, not merely Yemenis but foreigners as well. It should also do something to relieve the plights of the returnees who are now jobless, begging in the streets so that those living abroad would feel that their government takes care of its people in their joys and agonies.
However, I can see in the visits of the Minster of Immigrants Affairs, Dr. Ahmad Al-Beshary, a silver lining as regards keeping in touch with immigrants, listening to their agonies and aspirations as well as assuring them that they are adored members of the society and that their role in the development of their country is indispensable.