Brexit to reduce remittances and exports, improve foreign investment: ICST

The Islamabad Chamber of Small Traders (ICST) on Thursday said Brexit will reduce remittances and exports but improve foreign investment in Pakistan. Volatile international currencies will make debt servicing easier for Pakistan, it said.

Some of the 1.2 million Pakistanis living in the UK may opt to come back which will hit remittances as UK is the third largest source of remittances after Saudi Arabia and the UAE, said the Islamabad Chamber of Small Traders Patron Shahid Rasheed Butt.

He said that the UK is the third largest investor in Pakistan after China and UAE and it will increase investment in Pakistan following the Brexit.

Shahid Rasheed Butt said that Pakistan should take steps to counter the impact of dwindling remittances which provide good budgetary support.

Overseas remittances play a critical role in boosting forex reserves and balancing trade deficit by 90 per cent; therefore, steps must be taken to ensure its smooth flow, he said.

He said that many oil exporting countries are facing economic crisis but remittances continue to increase which should be a matter of concern.

Existing laws prohibit government agencies from asking about the source of remittances which help corrupt elite to clean their ill-gotten money, he noted.

Increasing remittances has nothing to do with the trust of people on the economic policies otherwise exports and investment would not have been dwindled to an alarming level, he added.

Sliding oil prices have destabilised the budgets of many countries compelling them to cut development expenditures while expecting increased remittances from sliding economies is self-deception, said Butt.