The Iran War which has left the global supply chain into crisis has left billions of dollars in remittances at risk for the gulf region. The blockage at the Strait of Hormuz has choked exports, and raised import costs and strained supply chains.
According to an estimate, the migrant workers in the six Gulf Cooperation Council countries had sent an estimated $124 billion home in 2024. The money was aimed at supporting families from Asia and the broader Middle East to Africa.
Since the onset of the war, the remittances continued to fade away. Western Union Company reported an acceleration in outbound remittances from the Middle East during the early phase of the conflict.
The United Arab Emirates (UAE) alone accounts for about one-fifth of inward remittances for India. Money sent home by overseas workers rose more than 28% in the three months through March. Other neighbouring countries like Bangladesh and Sri Lanka also reported increase.
As reported by Bloomberg, the remittances grew at their slowest pace in almost four years in April in Philippines. This has left a worrying sign for a country where such inflows account for about 10% of GDP and where about 2.4 million citizens work in the Middle East.
Further, for Kenya, the Central Bank of Kenya data show private transfers from Gulf states rose in March as some 500,000 workers rushed to send money home at the onset of the war, before falling 18% in April. Kenya derives about 10% of its annual remittances from its citizens in the Gulf.
Gulf region has always remained a key driver for remittances globally. According to IFAD, a United Nations agency, migrants have sent over $5 trillion to low- and middle-income countries over the past decade.
For many developing economies, remittances support consumption, stabilize exchange rates, finance imports and ease external financing pressures.
South Asia accounts for about 9 million workers in the Gulf region.
Remittance Of $124 Billion Stuck At Largest Migration Corridors Due To Iran War
