ISLAMABAD: The recent debt payment problems of the Dubai World could lead to tightening of credit in the region, pointing to downside risks for South Asian migrants, working in the Gulf and reduced flow of remittances to their home countries, World Bank says in its latest report.
‘Should a significant portion of the stock of expatriate workers return home with accumulated savings due to downturn in the Gulf, near-term remittances inflow may likely rise,’ according to ‘Global Economic Prospects 2010: Crisis, Finance and Growth in Developing Countries.’
The debt payment problems suggest economic activity in the Arabian Gulf economies could surprise on the downside in the event of protracted problems, it says.
The report says remittances inflows – which provided a cushion for the region – could fail to recover in the event of a prolonged global recession or a jobless economic recovery, potentially coupled with tighter immigration controls.
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