Lifeline inflows

Remittances are Pakistan’s economic lifeline. And the good point is that they are forthcoming in all humility. Notwithstanding the adverse impact of inflation and rise in oil prices on the country’s economy, remittances have really come in as a cushion. According to the SBP, the same surged 10.2% in October 2021 to $2.5 billion on a year-on-year basis. The prime factors behind this confidence is, of course, prompt measures to consolidate the confidence of expatriates in the state of economy, as well as the central bank’s efforts to open up formal channels for disbursement. The fact that foreign exchange is flowing in at above $2 billion per month since June 2020 is worth appreciating.

While the global economy had plummeted in the wake of the coronavirus pandemic, what kept alive the flow of remittances to Pakistan is altruistic means to the end-user. The elimination of middlemen made a lot of difference. The government’s incentives for banks also played a critical role in increasing the receipts. They have set in an element of sustainability and enabled the government to literally bank on the precious medium earnestly. The sense of patriotism, however, is in need of being eulogised too as Pakistan recorded a sustained uptrend in receipts. This sentiment of the national economy should draw more incentives from the government, and the expatriates facilitated in all avenues of their legal recourse in terms of investment in big-ticket projects and real estate. This is how wealth generation can be assured for an economy which is picking up at around 4%, and has been able to shrug off its circular debt.

Rupee’s depreciation is another ingredient behind the surge of remittances. Geo-strategic analysts also believe that upheavals in Afghanistan might have aided the increase in the pace of inflows, contrary to the assumption that unrest on the western frontier is eroding forex reserves. This is why the proposed National Remittance Loyalty Programme, to be launched soon, attains immense significance in extending financial incentives. The Roshan Digital Account, Roshan Apni Car, Apna Ghar and the Roshan Samaji Khidmat are steps in the right direction. Buoying forex is inevitable to stay afloat.