Growth imperatives: Can remittances catapult Pakistan’s economy?

ISLAMABAD:

Pakistan has long revelled in the remittances stashed in the state coffers by its overseas nationals. In the past 50 years alone, more than 10.13 million Pakistanis have gone abroad in search of greener pastures, revealed an official document.

The document obtained by The Express Tribune mentioned that overseas Pakistanis remitted a total of $59.07 billion in foreign exchange to Pakistan in the last two and a half years.

In the fiscal year 2019, $21.73 billion were earned in foreign exchange while the number rose to $23.13 billion in 2020. 

Speaking on the subject, Special Assistant to the Prime Minister on Overseas Pakistanis Sayed Zulfiqar Abbas Bukhari said Pakistan has been receiving record remittances under the PTI government.

“The volume for the first time has crossed $2billion for six consecutive months and we are still counting.”

The SAPM continued that despite the pandemic and its economic fallout, Pakistan exported considerable manpower to foreign countries. He claimed that under the PTI rule, a record one million citizens have been facilitated by the ministry to migrate for employment abroad.

“The Ministry of Overseas Pakistanis and Human Resource Development is now expanding its horizon of manpower export to countries other than the GCC states. We are in close contact with South Korea, Romania, Germany and Japan. In this regard, I will soon make an important visit to Japan in March this year.”

The official report also mentioned that during the first six months of the current financial year, Pakistan received Rs1.20 billion from US, Rs1.87 billion from UK and Rs3.95 billion from Saudi Arabia, Rs2.95 billion from UAE, and Rs1.27 billion from European countries.

The report stated that during the last 50 years, more than 5.6 million Pakistanis have gone to Saudi Arabia on work visas, 3.929 million to the United Arab Emirates and 806,000 Pakistanis went to Oman.

Under the Bureau of Immigration, 194,425 Pakistanis went to Qatar, 181,547 to Bahrain, 1,83,635 to Kuwait and 1,10,934 to Malaysia on work visas.

The document stated that 4.359 million went abroad under the bureau of immigration.

The highest number of Pakistanis, 54.93 million, went abroad from Punjab to find employment. Under the Bureau of Immigration, 1,032,000 Pakistanis went from Sindh, 2,748,000 Pakistanis from Khyber Pakhtunkhwa, while the tally of registered immigrants from Balochistan reached 117,000.

Managing Director of Overseas Pakistanis Foundation (OPF) Dr Amir Sheikh said that overseas Pakistanis are the backbone of the national economy. He said that the OPF has been taking all possible steps for the betterment of the expats.

Former advisor at the Ministry of Finance, Dr Khaqan Najeeb, said the recent restrictions on travel and Pakistan Remittance Initiative have helped divert remittances to formal channels. “The increase in formal inflows has been instrumental in generating current account surplus. The current account surplus has led to a build up of forex reserves and a liquid foreign exchange market.”

Dr Khaqan felt that a departure of skilled workers such as engineers, doctors and accountants has increased over the years.

“This brain-drain may have weakened Pakistan's capacity in areas such as innovation, business growth and development of human capital by depriving it of important skills and workforce.”

Speaking to The Express Tribune, economist Nadeem Hussain said the central bank’s new rules have encouraged the overseas Pakistanis to send their hard-earned money back home.

“Now, this is a healthy sign for the economy, but it is also an overemphasised part in terms of total economic growth.

“To boost remittances, our foreign office has a huge role to play for the relaxation of visa regimes, especially when the developed world is being vaccinated and we haven’t been able to start the process yet. This would starkly affect our access to the labour markets.”