Saudi Arabia to put limit on money transfers by foreign workers

Labour minister says the cap, likely to affect the 3 million Egyptians living there, is necessary to keep much-needed capital in the Kingdom

Saudi Arabia is planning to place a limit on money transfers by foreign workers, the country's labour minister Adel Fakieh told Saudi news channel website Al-Arabiya on Sunday.
Under the proposed 'salary protection' programme, the government will limit the amount expatriate labour can send as remittances to ensure they keep the bulk of their salaries inside the Kingdom.
"About nine out of 10 workers in the country are foreigners. This has led to millions of riyals being transferred back to their home countries, harming the local economy," Fakieh said.
The total amount of expat transfers in 2011 is expected to reach US$26.67 billion, marking a growth of some 2.5 per cent on the previous year.
The minister gave no indication of what the eventual limit on remittances would be.
The Labour Ministry also recently put a 20 per cent ceiling on the proportion of guest workers to Saudis in employment, in its latest bid to stem unemployment among Saudi nationals.
Around 3 million Egyptians live and work in Saudi Arabia and are estimated to send $1 billion in remittances from the country every year.
In the 2010/122 financial year the total remittances of Egyptians living abroad amounted to $12.6 billion, almost 30 per cent higher than in FY2010/2009.
Saudi Arabia in ranked second in the list of the world's largest remittance-sending countries, behind the US, according to the World Bank. In the year 2000, it was in 16th place, a reflection of the huge influx of foreign workers to the Kindom over the last decade.
Foreign labourers comprise around 87 per cent of total private sector employment in Saudia Arabia, according to figures reported by Al-Jazeera.
Sectors such as construction and retail are dominated by expats who comprise more than 90 per cent of the workforce in these areas.