Incentives needed to boost foreign inflows

FPCCI chief says overseas Pakistanis can play pivotal role in improving economy

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar has recommended more incentives for overseas Pakistanis to further boost foreign remittances, besides enhancing investment in the country.

These views came on the back of declining foreign inflows by overseas Pakistanis that have slowed down in August from the record high of previous two months, though remaining strong at over $2 billion.

He said that if the government assists overseas Pakistanis and provides them with incentives, they can play a pivotal role in boosting Pakistan’s economy through their remittances and investments for the socio-economic prosperity.

He appreciated the government’s efforts to announce incentives for global and domestic banks and remittance-transferring firms to make inflow of foreign currencies faster, cheaper and more convenient.

The FPCCI chief was of the view that remittances flows are the only hope of supporting the current account balance, as GDP is expected to decelerate in FY21 amidst low volumes of foreign direct investment and declining trend of exports, which have dipped by almost 20% in August.

The president warned that high workers’ remittances in June-August have been received on the back of temporary factors, including the impact of lockdown restrictions on transferring funds.

Remittances remained high, as overseas Pakistanis continued to send money through formal banking channels in the absence of parallel illegal channels like hundi and hawala and temporary suspension of international flights amidst Covid-19.

Nisar added that structural reforms can help revive Pakistan’s economic growth with a major focus on incentives for overseas Pakistanis workers and industrialisation.

He suggested that overseas Pakistanis invest in the housing sector, agriculture, transportation and other industries, which have huge potential. “The government has failed to attract foreign investment because of the cumbersome process of approvals of projects, which discourages the investors,” he added.

Nisar observed that Pakistan has not been able to achieve its full export potential and product diversification owing to limited access to raw-material and to this effect the application procedures for temporary import schemes should be simplified so that exporters can achieve price competitiveness and product diversification.

He also called for lowering import duty on smuggling prone items, increasing the share of direct taxes in revenue and decreasing the slab of indirect taxes to achieve key economic targets set for the year 2020-21.

He said that both exports as well as the local industries should be facilitated. He was of the view that rules, regulations and procedures for industrial sectors should be easy so that it could play its due role in the economic stability of the country.

Published in The Express Tribune, September 27^th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.