For many developing nations expat remittances form an essential part of the economy. It is not unusual in many parts of the world for adults to leave their country of origin in order to seek paid work abroad. In many developing countries it is easier to find work – especially jobs that pay a reasonable sum – by relocating abroad.
Whether they stay short-term or long-term, the goal is often the same. The expats from developing nations don’t move abroad necessarily for a “better life” for themselves, as much as creating one for their family back home. They live on as little as possible while working abroad, instead opting to send as much money “home” as possible – a process known as “expat remittance”.
In such a way those unable to work “back home” are able to keep their heads above water. Aged parents in countries without a national welfare system, for example, or a partner looking after children, can all be the beneficiaries of these expat remittances. Without these sources of extra income many more people would struggle to survive in developing nations than already do.
The long and short of this situation is that anything which affects these remittances can have a serious impact on the quality of life in many developing nations. Something as minor as a currency fluctuation or as major as a change of employment law can often spell disaster for people surviving on the very edge of existence.
According to some sources the current news on expat remittances is worryingly bad, and is set to worsen in time too.
A number of experts have revealed that expat remittances are slowing down now, and are expected to show growth of only 0.9%; the lowest figure since the recent economic meltdown. The risk is that these sums of money could stall, or even start dropping over the coming years.
The simple reason for this change is the slowing economy in many of the major expat employer countries. Russia and the United Arab Emirates are two excellent examples, both of which employ vast numbers of workers from abroad.
Sadly, a fall in global oil prices has meant fewer employment opportunities and lower salaries for many expats who rely on such opportunities. The Russian currency has also fallen victim to this downturn, making wages earned there worth even less when transferred overseas.
Experts now suggest that with oil revenues falling, major world powers like the UAE need to start rapidly investing in other industries if they are to maintain their recent growth trends. Doing so will not only help to keep their economies strong, but hopefully will also provide opportunities for expat workers. In doing so, expat remittances can continue to thrive, and help to support those less fortunate individuals in developing nations.