Grim figures 

Alarming SBP data on declining foreign remittances 

The State Bank of Pakistan’s recently released statistics on the troubling trend of falling foreign inward remittances as compared to the past financial year – the first time such decrease has been noted in over a decade – must cause sleepless nights to already insomniac policy makers. Foreign remittances – the backbone of our foreign currency reserves (now nearly equalling the country’s also steeply declining exports) had not witnessed a drop even in times of acute financial crisis in the Middle East, such as the region’s export staple, oil, tumbling from over 100 dollars a barrel to below fifty, in the UAE property bust, or during the financial crisis in Dubai, which was at one stage unable to meet its over $50b debt, and had to be bailed out by Abu Dhabi. These unforeseen events adversely impacted the workforce of other Asian countries too, but for Pakistan, with its economy plagued by a massive current account deficit and other well-known negatives, not of speak of its investor-scaring politics, foreign remittances were and are an easy shortcut towards enhancing its stressed foreign exchange reserves, and a vital part of the always strived for but seldom-achieved budget-balancing act.

Weak hearted observers and the country’s financial well-wishers, beware. Gloomy statistics speak for themselves: Financial Year 2016, total remittances received from the diaspora worldwide, $19,916m, FY 2017, total inward remittances, $19,303m, a 3.08 percent drop, translating into a red-flag $613m, lesser amounts than which are cavalierly borrowed by our financially dehydrated but still spendthrift government at high rates for short terms. Saudi Arabia represents an 8.35 percent annual drop ($472m) to $5.49b, UAE 1.27 percent to $4.3b, other GCC countries 4 percent to $2.32b, while remittances from USA and UK have also declined.

Our tangled political crisis, with the Finance Minister also sucked in, the split among the GCC over Qatar, and volatile conditions prevailing elsewhere in the region augur ill for job opportunities for our workers and inward remittances. Who, then, will bell the elusive remittances cat?