Gulf Cooperation Council: From “Gone to Gulf” to “Gone to America”, a remittance story unfolds

Bobby Ghosh, writing for Bloomberg in 2020, warned that the phrase “Gone to Gulf” for one in two incomes in Kerala was showing its dark side, with Arab businesses losing staff in huge numbers during the pandemic.

The latest data now shows that the United States of America has overtaken the United Arab Emirates as the country from which Indians send the most money home. Contact-intensive, outdoor-intensive jobs were lost in the Gulf at the height of Corona, but in the United States, where Indians have IT and white-collar jobs, shipping s went more or less smoothly.

The United States has overtaken the United Arab Emirates as the main country of origin of remittances, accounting for 23% of total remittances in 2020-21, shows a research paper by Soumasree Tewari and Ranjeeta Mishra of the Department of Economics and Policy Research, Reserve Bank of India (RBI).

“This corroborates the World Bank (2021) report citing an economic recovery in the United States as one of the important drivers of remittance growth in India,” the researchers said.

Family comes first, especially in Covid

India has become the country whose inhabitants have sent the most people home despite the pandemic. India received $87 billion in remittances in 2021, the top recipient of remittances, and well ahead of countries like China and Mexico, according to a World Health Organization report in July from last year. India accounted for 12% of total global remittances in 2021.

“This implies that countries with a severe impact of Covid-19 received greater support than others for the maintenance of overseas diaspora families,” the RBI economists said. “This finding validates the altruism motive of remittances.”

The WHO report says remittances are an “important and positive” economic outcome of migration for migrants themselves and for family and friends left behind in their countries of origin.

Once migrants have had access to economic opportunities, they often send money home. Remittances represent a large part of the global movement of funds. Despite forecasts that remittances would plummet due to the COVID-19 pandemic (partly due to travel restrictions and the economic downturn), remittances have proven resilient.

“Remittances are now more than three times greater than official development assistance and more than 50% greater than foreign direct investment, excluding China. This underscores the importance of remittance flows in supporting spending in recipient countries during times of economic hardship,” the report said.

Gulf silver drop

“… the share of remittances from the GCC (Gulf Cooperation Council) region in India’s inward remittances is estimated to have increased from over 50% in 2016-17 (latest period studied ) to around 30% in 2020-21,” the research from RBI economists said.

This is easily explained by the loss of jobs.

“Much of the flow of remittances is linked to jobs and economic conditions in host countries,” said Madan Sabnavis, chief economist at

said ET. “Remittances from the Gulf region were near zero due to the downturn and many faced job losses. But in the United States, where most Indians are employed in IT and other white-collar jobs, the employment situation was more stable during the pandemic restrictions.In addition, the US government also assisted its individual residents with cash transfers that made it easier for them to financially support their loved ones left behind. country.”

Remittances from the UK and Singapore also increased significantly. The US, UK and Singapore accounted for 36% of total payments in 2020-21, according to research by RBI economists.