Plenty of ways to attract USD

Inflows can stem from remittance cards, IT exports, tourism, skills programme

KARACHI:

Plenty of our deep-rooted problems are getting exposed day by day. Most pertinent (if not the only one) being our inability to earn enough dollars to pay import bills.

Our very dear bright former SBP deputy governor, Murtaza Syed, continues to contribute by writing to help the masses understand and hoping policymakers pay heed. One key point he highlights “spending beyond means” needs to be further delineated. However, for a change, let’s look at how we can “earn as per means”.

There indeed are various ways for the state to attract dollars even in a dire situation as worse as today’s.

One, Naya Pakistan Certificate (NPC): There is inordinate delay in revising the returns offered on both PKR and USD instruments. While domestic T-bill yields are kissing the 20% mark, rupee NPCs still yield a paltry 15sh% for a year. How difficult it is to link it to your monetary policy rate to re-price immediately.

Similarly, the dollar-yielding NPC rates were revised upwards after enormous delays. However, that needs to be further optimised in conjunction with current global market dynamics.

Lately, Egypt raised global debt at nearly 11% yield having a better credit rating than ours. There is no harm if we were to borrow at 9-10% from overseas Pakistanis with additional benefit for rupee conversion. The reduced tax rate incentives must continue for both instruments.

Two, Loyalty Remittance Cards: Pakistanis spending X amount of money back home via remittances should be rewarded with credits, with 2-3% of tax credits on incremental inflows with concrete benefits.

Instead of a VIP queue at airport and NADRA offices, a holistic plan is needed to lure them to put money back home. The intent is to use Pakistan for their banking needs and make it easier to borrow from them.

Y amount of remittances received by each council, district and tehsil should be reinvested for betterment of the local area in terms of infrastructure, economic zoning, education and healthcare. Masses should visibly see the impact of their work benefiting their immediate family and community at large.

Three, Overseas Pakistanis Justice Courts: There should be dedicated courts to hear legitimate legal cases of overseas Pakistanis pertaining to civil and criminal nature with a time-bound trial to be concluded.

These attorneys and judges should be monetarily incentivised further to address the grievances with digital e-courts, saving precious dollars of people residing abroad who find it difficult to secure holidays to come back and rot within our inefficient judicial system.

Four, IT exports: Relentless efforts are needed by all government departments to grow IT exports come what may. Our educational system is not able to produce enough good-quality IT graduates with exportable skills.

To carry the burden of 240 million people, it is vital that hundreds of thousands of graduates are produced each year by top-tier IT institutes and hired by global or domestic IT giants to integrate with the global workforce by remaining competitive and efficient.

IT schools deserve much more tax credits and subsidised loans than the inefficient textile giants. Each student with a globally certified skillset shall get cashback and so should the teaching body training these young minds.

A dedicated comprehensive webpage needs to be developed where entire Pakistan can showcase their skillset similar to Fiverr, Upwork and other websites. Why have we not brought Paypal yet?

Five, boosting domestic tourism: Overseas Pakistanis with valid hotel reservation, taxi bookings and shopping receipts should be given tax breaks on airfare, hotel stay and domestic shopping.

With a sharp plunge in PKR from 170 to 290 against USD in a year, a lot of middle class is bereft of purchasing power to go abroad for holidays, barring the elite.

A few four to five-star hotels with peaceful security and adventure resorts can attract hundreds of millions of dollars of inflows and stop outflows simultaneously.

Pakistan is gifted with beautiful scenic spots that can offer value for money refuge to people escaping monotonous lives. New smart cities should be set up by hiring global architects to create an environmentally friendly, no carbon emissions zone with everything within 15 minutes’ walk distance.

Six, advanced manufacturing hub: In India, Foxconn has announced $19 billion worth of investment and the global semiconductor market pivots from China and Taiwan to India. Moreover, Apple is said to have created 100,000 jobs in India for hiring the young top talent.

Geopolitics notwithstanding, we have been working for years to develop policies for automobile, petrochemical and refinery sectors without success. Even our iron-clad friend chose to invest $7 billion in Hungary to develop a battery plant overlooking his next-door neighbour marred by IMF’s plan, debt burden, domestic circus and imprudent policies.

Pakistan has been caught in a quagmire to pick favourites for top slots without creating global linkage that allows tech giants to transfer technology and hire thousands of our graduates.

Seven, circular skill programme: Pakistanis having studied and worked abroad should get tax credits if they are working back home and if they decide to set up a business in Pakistan to encourage globally trained human resources to give back to the country.

Pakistani scholars teaching at top global universities should be brought back with competitive after-tax salaries in an educational institute that serves masses at large. In fact, they may be allowed to conduct digital classes in today’s day and age and pass on their valuable experience and expertise to the younger generation.

We add 6-7 million people to our population every year; how on earth will we find enough job opportunities?

We are pushed to the wall economically due to our inefficiencies, incompetency, delayed decision-making, no alignment of interest, political patronage and meddling, old-school policies and the lack of long-term innovate visions.

We’re trying the same CEOs to run the country who have taken high debts, not skilled employees, put shareholders in deep losses and themselves enjoy lavish perks while employees have salary cuts.

Genuine democracy demands fresh ideas, fresh faces, fresh solutions and a political reset. We genuinely need a 15-year plan and collective willingness of policymakers to fix the house.

If you watch TV talk shows, it shows political bickering, revenge and tug of war. That is exactly what our country’s leaders are busy doing. Masses can live on charity and hope.

The train driver is as reckless as he can be while passengers’ lives are at stake. Facing poor prospects, 28 people lost their lives at the Italian coast trying to find a better future that we couldn’t offer. All of us are responsible and should introspect.

The writer is an independent economic analyst

 

Published in The Express Tribune, March 6^th, 2023.

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