An increasing exodus of expatriates from the Gulf region is being ascribed to a rise in the cost of living, including housing and electricity expenses, The Jerusalem Post reported on Monday.

The five Gulf Cooperation Council countries – Bahrain, Kuwait, Oman, Qatar and Saudi Arabia – employ about 21 million expat workers out of a total workforce of 29 million people.

Mahmoud Khattab, an accountant from India working in Bahrain, said he had to send his family back to India. 

“I get 500 dinars [$1,325] as a monthly salary, and I cannot live with my family here,” Khattab said. “The rent rose from 150 dinars to 250, and the electricity bill rose after removing the subsidy, from 20 dinars to 120 dinars.”

The government in Bahrain has replaced many of its state subsidies with cash assistance, but this is only allocated for citizens. Electricity bills are more than nine times higher for expatriates than for citizens. 

Generally, many expatriate workers send their families back to their home countries as a result of the increasing living expenses. 

Saudi economic expert Abdullah al-Otaibi attributes the exodus of expat workers from Saudi Arabia as “a correction to the market, not an expulsion of expatriates. There is a major distortion in the market.”

According to al-Otaibi, last year’s reforms in Saudi Arabia that made living expenses higher for foreigners dropped the unemployment in the country from 15% to 11%.

“Expats work in the same jobs as Saudis, but with lower salaries,” al-Otaibi said. “The Saudi has obligations and likes to live a good life. As for the expatriate, he is coming for a few years to save what can be collected from the money and then return to his country. This is money that goes abroad.”

It is estimated that foreigners in the Gulf sent $127 billion in remittances to their home countries in 2021, compared to $116 billion in 2020.

Ahmed Alwan, a Kuwaiti economic analyst, appeared to agree that the market has been “imbalanced” and is undergoing corrections.

“The percentage of foreign remittances from the Gulf countries is among the highest rates in the world compared to the gross domestic product,” Alwan said. “In Kuwait, it is close to 8.5%, and in the Gulf countries it ranges between 8% and 13%. It cannot be that all these sums go abroad.” 

Alwan noted that the flow of finances abroad “caused a major imbalance in the economy of the GCC countries.” 

“Artificial intelligence solves many things, and many jobs for expatriates can be dispensed with,” he said. 

Several experts agreed that nations cannot be expected to subsidize foreigners who send most of their incomes back to their countries of origin.

“Prices are going up and the immigration of foreigners led to a major imbalance in the labor market in the [United Arab Emirates] and the [whole of the] Gulf states,” said Omar Ahmed, a UAE-based Egyptian economic analyst. “This was largely reflected in prices and the high cost of living, which led to expatriates raising their prices and salaries, and this was reflected in inflation. Gulf countries will not support expatriates [with subsidies]; this is clear.”

Osama Ahmed, a Bahraini economist, said that no countries provide support to expatriates. “This is not new, especially since budgets are limited,” he said.

Qatari economist Hamad al-Marri said that host countries cannot be expected to subsidize foreign workers’ income as it goes abroad.

“We in Qatar may be different, as the number of citizens is few and cannot cover all these jobs, but in return, there are high salaries paid to expatriates, sufficient for their livelihood, and we are not responsible for their desire to accumulate funds before returning to their countries.” 

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