The Pakistanis working abroad remitted over $1.404 billion during the first month (July 2013) of the current fiscal year, FY14.
The State Bank of Pakistan reports on Tuesday showed an “impressive” growth of 16.57 percent or $199.68 million compared with $1.204 billion the dollar-hungry country received during the same month of last fiscal year, FY13.
The remittances received from most of the countries showed growth, said the central bank. The month under review saw inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounting, respectively, to $410.73 million, $252.41 million, $233.06 million, $221.93 million, $161.44 million and $38.59 million.
Last year in July, the overseas Pakistan had remitted $349.66 million, $240.54 million, $215.30 million, $148.49 million, $140.36 million and $30.83 million from the above destinations. The remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries were counted at $86.23 million as against $79.53million received in the same month of FY13.
The central bank tends to attribute the ongoing upward trend in worker remittances to the government’s efforts to channelise the inflow of foreign exchange through legal channels, mostly the banks. It may be recalled that in order to provide an ownership structure in Pakistan for remittance facilitation, the government of Pakistan through the State Bank and the ministries of overseas Pakistanis and finance had launched a joint initiative called Pakistan Remittance Initiative (PRI) in April 2009, said the SBP.
“This initiative has been taken to achieve the objective of facilitating and supporting faster, cheaper, convenient and efficient flow of remittances,” the State Bank said.
The SBP, the banking regulator, backed by the federal government, has long been striving to curb the menaces of “hundi” and “hawala” that ensures the inflows of remittances through undocumented routes. As the cash-strapped government is desperately looking for ways and means to expand the country’s narrowed tax base, some economic observers propose that the workers’ remittances be documented and taxed to get additional revenues.
If brought into the tax net, the sending of worker remittances by the Pakistani workers abroad would fetch a handsome amount to the national kitty as billions of dollars are remitted annually. The last fiscal witnessed the dollar-starved country receiving record remittances that were counted in excess of $ 13 billion.
Negatives like poor foreign investment, excessive IMF repayments and an unfavourable balance of payment are currently testing the nerves of economic managers who are running from pillar to post to persuade the international donors and lenders to doll out at least $11 billion to Pakistan to avert any possible default on its international financial obligations.
The country’s liquid foreign reserves have already contracted to an alarming level of $ 10.230 billion by August 2, said the State Bank. Of this total the central bank holds only $ 5.142 billion. The commercial banks possess $ 5.088 billion.