The problem is it's not really a pay rise for the locals, because it's a closed loop system.
What it does mean is that we get a burst of inflation with more cash printed (60% public sector pay rises) chasing almost the same amount of commodities, goods and service. Thus causing price inflation if there is not any government price controls.
In a system without taxation and limited internal competition or production it can be a tricky situation for any economy, with all the extra readies sloshing about.
Personally I would like to see a pension/savings fund instead of a pay rise. This would be able to keep up with inflation in the home country rather than adding to domestic money supply. I believe the other two major players in the region offer this...
