Crisis Hits Remittance-Dependent Nations

ARAB workers eagerly awaiting release from Iraq may feel safer after leaving the embattled country, but they may not be better off. Back home, the job prospects are dim. Most of the Arab guest workers in Iraq and other oil-rich Gulf states come from countries whose own beleaguered economies cannot absorb them. Since the mid-1970s, when higher-income oil exporters - Saudi Arabia, Kuwait, and the United Arab Emirates (UAE) - began ambitious development programs, millions of workers from the Arab world have flocked to the Gulf.

This largely worked to everyone's advantage. Rich Gulf states, whose indigenous populations were largely unprepared or unwilling to participate in the development of their own country, have employed others to do so. Governments with workers abroad were relieved of pressures to provide jobs, housing, and food subsidies for a portion of their populations.

Exporting labor proved essential for Egypt and Jordan, whose economies rely heavily on workers' remittances as sources of precious foreign exchange. Typically, one worker in the Gulf earns enough to support an extended family left behind.

For Egypt, whose 55 million population increases by 2.6 percent a year, workers are the main export. Egypt's unemployment is inexact, given the huge numbers of ``ghost workers'' - those registered on the government's lengthy payroll but absent from the workplace. Riad Ajami, a Middle East expert at Ohio State University, puts the jobless rate at 22 percent.

``It varies from year to year, reflecting the situation in the Gulf states. But remittances from our workers abroad - as much as $3 billion in a year - account for the greatest source of foreign exchange,'' says Ashraf El-Rabiey, a trade official with Egypt's Economic and Commercial office in Washington. Petroleum exports reap $2 billion annually, he says, followed by Suez Canal revenue and tourism, at $1 billion each.

Dr. El-Rabiey estimates there are 1 million to 2 million Egyptians in Iraq doing unskilled construction and agricultural work. By contrast, 200,000 Egyptians work in Kuwait as teachers, technicians, and in other skilled and semiskilled positions.

``Kuwaiti remittances are equal to those from Iraq,'' says El-Rabiey. ``That's indicative of the high level of Egyptian skills in Kuwait and that our workers in Iraq are not allowed to transfer what they wish to transfer back to Egypt.''

He says there are laws about foreign workers' rights to repatriate their earnings, but ``they're not respected by the Iraqis. Our workers must put their earnings in Rafidain Bank [Iraq's state bank] and even in Iraq their access to their money is limited.''

Professor Ajami says that the Gulf crisis jeopardizes every source of Egypt's foreign exchange. ``The Egyptians can expect at least a $2 billion loss of revenue,'' he says, including severed Iraqi trade, an economic slowdown in the Gulf that means fewer markets for Egyptian exports and reduced Suez Canal earnings due to less traffic. The greatest loss will be an end to earnings from Egyptian workers in Iraq.

The Iraqis can no longer afford to keep Egyptian workers, financially or politically, says Ajami. ``Egyptian President [Hosni] Mubarak's statements in recent days have been very tough toward Saddam,'' he says. ``Egyptians have discovered that their presence in Iraq is at best tenuous.''

Since lower world oil prices caused an economic downturn in the Gulf in the latter 1980s, workers have returned home from the Gulf in a steady stream. In Jordan, with runaway unemployment, this has been a particular strain.

``There are 524,000 workers employed in Jordan,'' says Ajami, ``250,000 Jordanians, many of them Palestinian, work in the Gulf. Their remittances totaled between $800 million and $1.1 billion a year - crucial for Jordan's balance of payments.''

But given Jordan's government and popular support for Iraq, says Ajami, ``Jordanians will be the first to go. ... Saudi Arabia, Kuwait, and the UAE would rather employ another non-Arab Muslim than an Arab, especially from Jordan.''

For every Kuwaiti worker there are three expatriates. In Saudi Arabia, out of 10 million residents, ``3 to 4 million are expatriate workers,'' says Ajami. Sixty percent of foreign labor in Saudi Arabia is Asian and just over 30 percent is Arab, he says.

In the Gulf, with the overwhelming number of expatriates, contrasts are sharp between rich and poor Arabs. As Arab labor continues to lose out to Pakistanis, Indians, and Filipinos who work for a lot less and present fewer political risks, says Ajami, Arab resentment will increase. ``Whatever the Arab workers thought of the Pan-Arab system, they have learned they are expendable.''