Muscat: Expatriates living in Oman have found it difficult to send money back home, with rising costs due to the economic downturn leading to a decline in overseas remittances.
According to the Central Bank of Oman's Annual Report for 2016, expatriate remittances through money transfer houses showed a decline of 6.5 per cent last year, as compared to 2015.
After crossing the OMR four billion mark in 2015 — about OMR4.2 billion was remitted overseas that year — the number fell to OMR3.95 billion in 2016.
Before last year, remittances had been showing steady growth, climbing from OMR2.13 billion in 2010 to 2.77 billion in 2011, which then climbed to OMR3.1 billion in 2012, OMR3.5 billion in 2013 and OMR3.96 billion in 2014.
However, the total number of overseas bank transfers out of the country continued to grow, jumping to 37.3 per cent from 30.8 per cent over the span of a year. That figure currently stands at slightly more than OMR4.4 billion, up from OMR3.3 billion the previous year.
"A large chunk of the gross domestic saving was remitted out of the country in the form of current transfer i.e., remittances by the expatriate workers in Oman (about OMR4 billion) and investment income i.e., net interest and dividend paid on external liabilities," said the report, which was released online by the CBO.
"Oman's gross national saving as percentage of GDP dropped to 20.1 per cent in 2015 compared to gross domestic saving rate of 39.5 per cent, implying leakage of savings out of the country to the extent of 19.4 per cent of GDP," the report went on to say. "Gross national saving rate at 20.1 per cent was lower than the domestic investment rate (33.8 per cent), leading to disinvestment of foreign assets abroad as net inflows under capital and financial accounts fell short of the current account deficit."
The remittances going overseas would've certainly helped the Sultanate, had that money been used inside the country: the report stated that Oman's budget deficit increased by half a billion Omani Rials, from OMR 4.2 billion in 2015 to OMR 4.7 billion last year.
"The huge amount of money spent on overseas remittance is negatively affecting the Sultanate," said Nasser Al Khamisi, a Shura member, speaking to Times of Oman. "They are wasted investment opportunities for Oman. It absorbs the country's wealth as it makes a big chunk of the Oman budget."
"Expats with less than OMR600 salary should be allowed to bring their families into the country," he added, "Families need to use transportation, schools hospitals and other services which will ultimately reduce remittance and generate revenue to the country in addition to providing jobs for Omanis."
A large chunk of remittances come from blue-collar expat workers in the Sultanate. They often leave their families in their home nations in search of work, and remit a very significant portion of salaries earned.
Statistics show that Bangladeshis are the biggest expat labour community in Oman, accounting for 694,499 followed by Indians with 691,775.
At the end of 2016, according to the report, there were 16 exchange establishments licensed for money exchange and remittance business as well as 36 exclusive money changing firms in Oman, with the former having 317 branches at the end of the year.