Another year, another set of remittance figures from the GCC. At $153.5 billion, the total remittance outflow from the Gulf Cooperation Council (GCC) countries remains staggering. But scratch beneath the surface, and there’s more to the story than just big numbers.
For the first time in recent years, GCC remittances dropped by 0.4% in 2023. Not exactly earth-shattering, but it does break the upward trend we’ve seen in previous years. In 2022, remittances had climbed by 1.2%, and in 2021, they saw an even healthier 3.8% growth. So, what’s causing the slowdown?
GCC’s Remittance & Workforce Data (2023)
To put things into perspective, here’s a breakdown of the key numbers:
| Category | Value |
|---|---|
| Total remittances from GCC (2023) | USD 153.5 billion |
| Change from 2022 | -0.4% |
| Change from 2021 | +1.2% |
| Percentage of citizens in the total labor force | Largest globally |
| Share of remittances in GCC’s GDP (2023) | Dropping trend |
| Decline in remittances’ share of GDP (2023) | -2.8% |
| Total labor force in GCC | 31.8 million |
| GCC’s rank as a remittance source | 54.2% |
| Male workforce percentage | 79.7% |
| Female workforce percentage | 7.6% |
| Increase in the number of working women since 2011 | 5.6 million |
| Percentage of the total population in the labor force | 23.4% |
| Private sector employment of Gulf workers | 83.5% |
| Public sector employment of Gulf workers | 14.2% |
| Increase in number of working women since 2011 | 800,000 |
The GCC’s Role in Global Remittances
Despite this dip, the GCC still remains the largest source of remittances in the world, surpassing even the United States. This makes sense—millions of expats from South Asia, the Philippines, and Africa send money home every month, fueling their home economies. However, the bigger question is whether this trend is sustainable.
The GDP Factor: A Shrinking Contribution
One of the more interesting insights from the report is the declining contribution of remittances to the GCC’s GDP. The share of remittances in the region’s overall economy has been falling steadily—dropping by 2.8% in 2023 alone. This suggests that while remittance volumes remain high, the GCC economies are growing in other areas, reducing the relative impact of these outflows.
This shift isn’t necessarily bad—it could indicate more localization of jobs and a stronger reliance on internal economic activity rather than expat-driven labor. But it also means that the countries receiving these remittances may need to brace for a future where these inflows are less of a safety net.
Labor Market Insights: The Expat Dependence
The GCC labor force stands at 31.8 million, with expatriates making up the bulk of it. Men dominate the workforce at 79.7%, with women lagging far behind at 7.6%. Notably, the number of working women has increased by 800,000 since 2011, which is a positive step toward gender inclusivity.
However, a major trend is the continued preference for public sector jobs among Gulf citizens. While 83.5% of expatriates work in the private sector, only 14.2% of Gulf nationals do. Most Gulf citizens remain in government jobs—a long-standing challenge for economic diversification.
The Other Side of the Story: The Underground Market
But there’s another side that I think we should look at—not ignore. The grey economy. The Hawala market. The underground transfers. The Hundi networks. Call it what you want, nomenclature notwithstanding, but there is a parallel financial system where a huge amount of money goes out of the GCC through informal channels.
Why?
Because of foreign exchange restrictions placed on many receiving countries, there’s often a premium on the dollar, AED, Kuwaiti Dinar, or Saudi Riyal in those markets. That extra 1% or 1.5% premium may seem small, but for a labor-class worker sending money home every month, it makes a big difference. The psychology is simple—why settle for less when you can get more? That’s why they use trusted networks to send money, ensuring it reaches home through unofficial, yet highly efficient, channels.
Then there’s another angle—crypto.
For the middle class, upper middle class, and traders, cryptocurrencies like USDT and USDC have become a seamless way to transfer wealth. Instead of dealing with remittance fees and currency conversion losses, they park money into stablecoins and move it across borders without ever touching traditional banking rails.
On paper, it looks like Dirhams or Riyals were deposited at an exchange, but the money never really moves in a cross-border sense—it just changes hands in a different format. This is huge in markets where the demand for dollar-pegged crypto is high—think of people in Pakistan, Bangladesh, and parts of Africa who need stable currencies to preserve wealth and conduct trade with the US, Canada, or Europe.
So, does this matter? Absolutely.
The equation isn’t as simple as it looks.
Take Pakistan, for instance. Despite all odds, it’s experiencing a boom in remittances, while Bangladesh, on the other hand, is facing a sharp decline. Same region, the same Gulf source markets, but very different outcomes. What’s happening? The answer likely lies in a mix of formal and informal remittance channels, currency policies, and emerging financial strategies like crypto.
A Bigger Shift on the Horizon?
There’s also a strong push toward workforce localization. GCC countries are actively trying to move national labor into the industrial sector while reducing over-reliance on expatriate workers. Whether this works in the long run is yet to be seen.
The broader lesson? The GCC economies are evolving. Expats will still play a crucial role, but long-term trends suggest a shift toward more self-sustaining labor markets, strategic economic diversification, and less reliance on remittance-driven financial flows. For countries dependent on Gulf remittances, this should serve as a wake-up call—future inflows might not be as generous as they once were.
And with crypto and underground markets filling the gaps, official remittance figures might not tell the whole story any more.
Time to start planning for a post-GCC remittance world? Maybe.
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This page was last updated on March 18, 2025.
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