Ex­pats remit $13.3 bil­lion in just 7 months

The Pak Banker - - FRONT PAGE -

Pak­ista­nis re­sid­ing in for­eign coun­tries con­tin­ued to send higher re­mit­tances back home as more people went abroad and the Fi­nan­cial Ac­tion Task Force (FATF) con­di­tions forced them to utilise le­gal re­mit­tance chan­nels.

Over­seas Pak­ista­nis re­mit­ted $13.30 bil­lion in first seven months (Jul-Jan) of cur­rent fis­cal year, which was 4% higher than the $12.77 bil­lion re­ceived in the same pe­riod of last year, the State

Bank of Pak­istan (SBP) re­ported. Alone in Jan­uary, the re­mit­tances in­creased 9% to $1.9 bil­lion com­pared to $1.74 bil­lion in the same month of pre­vi­ous year, it added.

"Over­all, a con­tin­ued growth trend is now emerg­ing in re­mit­tance in­flows," Arif Habib Limited Head of Re­search Sami­ul­lah Tariq told The Ex­press Tri­bune. Re­mit­tances from two leading Western coun­tries - the US and the UK - were ris­ing con­tin­u­ously since Pak­istan was im­ple­ment­ing anti-money laun­der­ing (AML) and com­bat­ing fi­nanc­ing of ter­ror­ism (CFT) rules of the global fi­nan­cial trans­ac­tion watch­dog - the FATF, he said.

Re­mit­tances from the US and the UK grew 11% and 6% re­spec­tively and cu­mu­la­tively ac­counted for over 32% of the to­tal re­mit­tances of $13.30 bil­lion in first seven months of cur­rent fis­cal year 2019-20. On the other hand, the growth in re­mit­tances from Saudi Ara­bia and the UAE, which were the top two coun­tries in terms of re­mit­tances, slowed down.

"The two oil-pro­duc­ing and ex­port­ing coun­tries are facing eco­nomic head­winds since in­ter­na­tional oil prices have failed to main­tain the up­trend in re­cent months," Tariq said. "The sit­u­a­tion has im­pacted the growth in re­mit­tances to Pak­istan, though most of the ex­pa­tri­ate Pak­ista­nis re­side in the two Mid­dle Eastern na­tions."

Econ­o­mist Dr Shahid Hasan Sid­diqui crit­i­cised the Pak­istan Tehreek-e-In­saf (PTI) gov­ern­ment for util­is­ing re­mit­tances to fi­nance the huge trade deficit. "Had the gov­ern­ment in­vested re­mit­tances in dif­fer­ent sec­tors of the econ­omy like ex­port-ori­ented in­dus­tries (such as tex­tile and oth­ers), the eco­nomic growth would have been hov­er­ing around 8% (com­pared to the nine-year low growth of 3.3% in the pre­vi­ous fis­cal year)," he said.

Sid­diqui was of the view that the gov­ern­ment should have adopted the strat­egy of in­creas­ing ex­ports rather than de­creas­ing im­ports to fix the fal­ter­ing econ­omy. Be­sides, he ex­pressed doubt whether the growth in re­mit­tances was nat­u­ral or it came through du­bi­ous ways. "The (pre­vi­ous) gov­ern­ment had found sus­pi­cious re­mit­tance trans­ac­tions. How can a driver send over a mil­lion dol­lars in wages back home in a year?" he said. People send out­ward re­mit­tances through il­le­gal chan­nels of hawala/hundi to set­tle ac­counts of over/un­der-in­voic­ing in im­port and ex­port, he said. "This money is some­times routed through home re­mit­tance chan­nels (into Pak­istan)," he said.

SBP Gover­nor Reza Baqir said last month the over­seas Pak­ista­nis were in­creas­ingly us­ing in­for­mal chan­nels to send re­mit­tances to the coun­try. "We are see­ing that the use of for­mal chan­nels for send­ing money [by ex­pa­tri­ates] is not grow­ing as much as the use of in­for­mal chan­nels," he said.

Dur­ing Jan­uary 2020, the in­flow of work­ers' re­mit­tances from Saudi Ara­bia in­creased 7% to $433 mil­lion com­pared with the in­flow of $404 mil­lion in Jan­uary 2019. The re­mit­tances from UAE rose 13% to $395 mil­lion in the month com­pared to $350 mil­lion in the same month of last year. The dis­patches surged 35% from US to $335 mil­lion com­pared to $272 mil­lion. They im­proved 1% to $299 mil­lion from UK com­pared to $295 mil­lion.

Pak­ista­nis dis­patched 12% higher re­mit­tances at $186m from GCC coun­tries (in­clud­ing Bahrain, Kuwait, Qatar and Oman) com­pared to $167m. They sent 10% higher funds from EU coun­tries at $47 mil­lion com­pared to $43m. Re­mit­tances re­ceived from Malaysia, Nor­way, Switzer­land, Aus­tralia, Canada, Ja­pan and other coun­tries dur­ing Jan­uary 2020 inched down 1% to $211m to­gether as against $213m re­ceived in Jan­uary 2019, the cen­tral bank re­ported.

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