AMMAN
— After reaching an all-time high of $3.7 billion in 2019, remittances coming
from Jordanian expatriates have dropped significantly as a result of COVID-19
and the disruption that took place in the global economy, according to data
from the
Central Bank of Jordan.
اضافة اعلان
The
continuous inflow of expat remittances is vital to the overall health of
Jordan’s aid-dependent economy. According to an article by Reuters, remittances
compromised 10 percent of the country’s
GDP. Many Jordanians, struggling with
unemployment in the Kingdom, have historically found refuge in higher-paying
jobs in the Gulf that allow them to send funds back to family at home.
General
Manager of Specialized Leasing Company, which is part of the Housing Bank
Group, Amjad Al-Sayeh, told Jordan News that local businesses have been affected
as a result of the drop in remittances.
“Cash
flow is vital to the health of any economy. Jordan already struggles from a
problem in cash liquidity,” said Sayeh. “Remittances coming from expatriates
were keeping us afloat, especially for us who work in housing, an industry that
is highly dependent on money coming from Jordanians abroad.”
The
decrease in expats’ remittances to Jordan, which was estimated to be 9.8
percent by the end of 2020 according to the Middle East Monitor, compared with
the 2019 value, has been attributed to the global economic recession, driven by
COVID-19. The recession took its biggest toll on rentier economies — economies that derive a substantial portion of
their wealth from foreign investment.
Saudi
Arabia, a rentier economy and the largest source of personal remittances to
Jordan, according to a report issued by the Jordan Strategy Forum in 2018, was
forced to lay off tens of thousands of their workers, many of whom were
Jordanian expats. Reuters has linked these lay-offs to the drop in remittances
to Jordan.
A
local professor at the Al-Hussein Technical University told
Jordan News how her
family was impacted first-hand by the decline in personal remittances coming
from Saudi Arabia.
“My
husband works in a government-owned petroleum company in the neighboring Gulf
country. A big percentage of our personal spending as a family is dependent on
the money he sends us,” said the professor, who asked to remain anonymous. “While
he was not laid off like many others, he still had to endure continuous
postponements in salary payments. Last year was very tough for us.”
In
a phone interview with
Jordan News, president of the Jordan Society of
Investment’s housing section, Kamal Awamleh, similarly spoke on the impact of
the decline in remittances on his sector.
“Percentage
wise, 25 percent of cash flows coming from expatriates go into the housing
industry in the form of purchase of property,” he said. “We were able to
witness first-hand the steep decline in remittances coming in last summer,
where demand for property did not increase as much as it usually does during
the summertime.”
But
Awamleh was optimistic that the downward trend in remittances would soon shift.
“With borders opening up, and the economies of our two biggest sources of
remittances — Saudi Arabia and United Arab Emirates — entering the recovery
phase as oil prices rise, we feel very optimistic that the numbers will
eventually return back to their pre-pandemic levels.”
Kamal’s
statement is backed by data on the Trading Economics website. After dropping to
a low of JD466.7 in Q3 of 2020, remittances in Jordan are on a slow but steady
increase, reaching JD498.8 in Q1 of 2021, a 6.4 percent increase.
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