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Saudi Arabia

More and Better Jobs: Are Fiscal Stimulus Packages Helping?

Raj Nallari's picture

 

Global GDP growth and as well as GDP growth in each of the regions were lower in 2009 compared to 2007. More specifically, specifically, negative growth rates were observed during 2009 in developed countries & European Union, Central and SE Europe & CIS countries and to a lesser extent in LAC, while the growth rates for East Asia, South Asia, Middle East, North Africa and Sub-Saharan Africa were positive in 2009 but lower than in 2007.

 

Reflecting this, all regions experienced higher unemployment rates, with the highest being in the developed economies & EU, Central and SE Europe & CIS and LAC economies, which again all had negative GDP growth rates in 2009. The ILO estimates that the global crisis has led to 34 million more unemployed and the World Bank estimates that about 60 million people may have been pushed into poverty.

Is Russia the second-largest sender of remittances? Or is it Saudi Arabia?

Ani Silwal's picture

Saudi Arabia was the second largest sender of remittances (after the United States) from 1988 to 2006. In 2007 and 2008, it was displaced by Russia as the second largest sender of remittances (figure 1). Flows from Russia have increased rapidly in recent years, reaching $26.1 billions in 2008. However, this rapid growth was interrupted in 2009, when remittance outflows fell by 29% to $18.6 billions in 2009. We don't have 2009 outflows data for Saudi Arabia yet but based on inflows data from Bangladesh, Pakistan, and the Philippines, Saudi Arabia's remittances outflows have not fallen much. Saudi Arabia was likely the second largest sender of remittances in 2009.

There are two possible explanations for why remittances from Saudi Arabia have been more stable than those from Russia (see Migration and Development Brief 12 for details). First, oil prices are more closely related to economic activity (thus, better employment prospects for migrants) in Russia than in Saudi Arabia. As major oil-exporters, both countries benefited from the surge in oil prices in the last few years. But only in Russia did remittance outflows move closely with oil prices (figure 2). This was not the case in Saudi Arabia, which has had ambitious development plans for a while and an aggressive counter-cyclical fiscal policy. Second, Russia’s borders with its neighbors are much more porous than those of Saudi Arabia, which enforces immigration quotas strictly. Russia’s porous borders have allowed migrants from neighboring countries to move in an out in response to changes in labor demand.


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