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.
Although the amount of remittance outflows from Russia is impressive, it is more modest when we look at per capita numbers. Remittance outflows divided by the population were much higher from Saudi Arabia ($880) than those from Russia ($184) in 2008. The similar figure for the United States was $158.
Figure 1: Remittance outflows (annual) Figure 2: Remittances from Russia & oil prices
Source: IMF Balance of Payments Statistics and World Bank's Development Prospects Group
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