Oil's Plunge Spills Over

When energy prices fall, consumption stocks in oil-importing economies should do well. Or that's what economic theory says. But ever so often, the prediction falls flat, particularly in emerging and frontier markets. And that's because of a roughly $100-billion-a-year variable that savvy investment managers tend not to overlook: worker remittances.

The Middle East employs some 29 million immigrant workers in everything from construction to retail trade, and of course, oil. Collectively, those workers sent $98 billion back to their home countries in 2014. Such inflows are a big deal for the receiving economies. Remittances from the energy-rich region add up to almost 5 percent of GDP in Pakistan and Lebanon. In Egypt, emigrants send home more than three times the revenue from the Suez Canal, World Bank data show. A big chunk of that comes from the six countries of the Gulf Cooperation Council: Saudi Arabia, Kuwait, Qatar, Bahrain, Oman, and the United Arab Emirates.