Remittances climb to 12pc in first 8 months of fiscal year.

Byline: S. Kamal Hayder Kazmi

Economists noted that during the last three decades, Pakistan received a significant amount of workers' remittances, which are sent by millions of Pakistanis working in the international markets. For capital deficient countries, like Pakistan, they have stated that workers' remittances are considered to be a major source of foreign exchange for any economy. These remittances have an optimistic impact on our economy by enhanced balance of payments situation and reduced dependence on external borrowing. These significant flows of remittances also assisted the country recover from the adverse effects of oil price shocks, declined in the unemployment issue, and enhanced standard of living of recipient households.

Present statistics published by State Bank of Pakistan (SBP) that the remittances sent home through overseas Pakistani workers grew 12 percent to $14.35 billion in first eight months (July-February) of the current fiscal year 2018-19 because of efforts made to encourage people to send the money through proper banking channels. It is also recorded that they had sent $12.83 billion in the same period of previous fiscal year. Experts also said that the growth in remittances is in line with SBP's projections and government's attempts to push overseas workers to send remittances through proper legal channels. Furthermore, Pakistanis living in Western states like United States and the United Kingdom are a big source of remittances besides those living in Middle Eastern states counting Saudi Arabia and the United Arab Emirates (UAE).

It is also noted that the present Government of Pakistan had introduced a crackdown on the illegal Hawala/Hundi operators to encourage the inflow of remittances by legal channels in the country. There was no other choice with the government but to take action as unlawful operators were the source of money laundering and terror financing. The crackdown has also assisted the Government of Pakistan to meet the targets given through the Paris-based Financial Action Task Force (FATF) to tackle money laundering and terror financing.

The economists also stated that workers' remittances no doubt have become the second foremost source of monetary flows to developing states and our country has experienced fluctuations in economic indicators in the past that hindered the flow of workers' remittances. Moreover, it is also recorded that the introduction of a mobile phone application (M-Wallet) by...