Expatriates’ remittances and tourist receipts take opposite direction

Jordanian expatriates’ remittances and receipts from incoming tourists are two major sources of foreign currencies. They act as engines of economic growth. Both are considered strong indicators to measure the level of economic activity and help predict the direction and rate of economic growth.

During the early part of this year, these two indicators took opposite directions. Tourist receipts declined, while remittances continued to grow.

Central Bank statistics indicate that expatriates’ remittances during the first four months of this year reached $1.12 billion, a growth rate of 3.4 per cent year-on-year.

If expatriates’ remittances continue to flow back home at this rate, as expected, they may reach $3.6 billion this year, the equivalent of JD2.6 billion or 10 per cent of the gross domestic product (GDP) of remittances feeding the Central Bank reserve of foreign exchange.

On the other hand, the number of incoming tourists during the first three months of this year declined by 12 per cent, causing a 15 per cent reduction in receipts.

Tourists are very sensitive to the state of security in the region. Foreign tourists consider that the Middle East is not safe. They do not evaluate the state of security in each country separately.

Expatriates’ remittances are supposed to be influenced to some degree by the prevailing economic circumstances in the Gulf countries. In this respect, it was noticed that the Gulf economies were not affected by lower prices of petroleum in the world market, as predicted.

Large-scale projects and the volume of public expenditure continued as usual by reaching to the huge reserves accumulated.

Jordanian expatriates in the Gulf states are not engaged in construction and other activities that may be directly affected by the fluctuations in the economic situation. They are mainly engaged in education, administration, security and other technical jobs.

Receipts from incoming tourists and expatriates remittances are of the utmost importance for the Jordanian economy. But while the government’s ability to enhance remittances is very limited, indeed, it can do much to promote tourism, especially from Gulf states whose citizens used to spend summers in Syria and Lebanon. They now prefer Jordan for their vacations, not only because of the proximity that allows them to come driving, but also due to the excellent medical services available at reasonable costs.

Jordan also remains attractive for its nice weather, security, cultural festivals and freedom to own real estate.

Some countries export labour, such as Egypt, others import labour, such as Saudi Arabia.

Jordan is at once a major exporter and an importer of manpower, on a relatively large scale.

Jordan is blessed with a surplus of technical and managerial personnel of high calibre, but lacks energetic labourers for construction, agriculture and other manual jobs.

Guest workers in Jordan send back home some $500 million a year, one-seventh of receipts from Jordanians working abroad.