ISLAMABAD: The World Bank (WB) has admitted that its 2016 report about US $4.9 billion remittances sent from Pakistan to India during 2016 was based on assumption and not the actual transaction.
In the report “Bilateral Remittances Matrix”, the World Bank had shown flight of more than $4 billion annually from Pakistan to India. But surprisingly, in another report (Annual Outflow Remittance Data) the World Bank shows that Pakistan’s outflow remittances for the whole world are just $269 million from 1970 to 2016.
The amount of more than four billion dollars has been actually calculated on the basis of a number of assumption including total number of people migrated from one country to another, migrant stock and per worker income. The World Bank in its Bilateral Immigration Matrix has mentioned that in year 2013, 1.39 million people migrated from India to Pakistan. Hence on the basis of assumption it calculated that these immigrants have remitted more than $4 billion to India. The international financial institution however later corrected its data and presented the actual figure when it was highlighted by the State Bank of Pakistan. Instead of verifying the data from World Bank and State Bank of Pakistan, the National Accountability Bureau (NAB) issued a premature statement making sure not to miss an opportunity to name and shame the politicians.
The World Bank has two data sets on the remittances; one contains bilateral remittances matrix and the other contains outflow & inflow remittances of the countries. Both the data sets of remittances have stark differences especially when it comes to the remittance outflow from Pakistan. A thorough analysis of the data suggests that the WB’s bilateral remittances data is an estimation of remittances based on number of people migrated from Pakistan to India.
The World Bank carried out two studies and presented reports on the latest statistics on immigration, emigration and skilled emigration. The first report was compiled in 2010 and the second updated report was compiled in 2013. According to the Bilateral Migration Matrix 2010, a total of 1.15 million people migrated from Pakistan to India whereas no one migrated from India to Pakistan. The second report which was updated in 2013 shows that 1.39 million people migrated from India to Pakistan and 1.126 million people migrated from Pakistan to India.
On the basis of this bilateral migration, the World Bank estimated the bilateral remittances and assumed that India received $4.6 billion in 2014 and $4.9 billion in 2016. However, the data set of World Bank containing outflow remittances show a total of $269 million remittances have been sent from Pakistan to other countries from 1970 to 2016.
The News carried out a thorough probe into the matter and analysed the previous reports of World Bank regarding bilateral remittances. According to the WB’s bilateral remittances for year 2010, not a single penny remitted from Pakistan to India, similarly 2011’s report also shows zero amount remitted to India from Pakistan whereas no money sent from Pakistan to India during year 2012. The unusual amounts reflected in the World Bank’s report were quoted after the updated Bilateral Migration Matrix 2013.
Though the World Bank’s own reports clearly reflect that before these migration studies there was zero outflow remittances from Pakistan to India but after the Bilateral Migration Matrix all of a sudden an unusual huge sum of $4.6 and 4.9 billion outflow remittances reported.
The World Bank though has made corrections in its data related to bilateral remittances between India and Pakistan for the year 2014, 2015 and 2016 after the State Bank of Pakistan pointed out flaws in the international financial institution’s report. However, according to the old data India received $4.69 billion remittances from Pakistan in 2014. Similarly, the same data shows Pakistan received $2.06 billion from India during the same year. The same data also showed that $236 million remittances were sent to Bangladesh and $195 million were sent to Afghanistan from Pakistan. Similarly, the World Bank data for the bilateral remittances between India and Pakistan shows that India received $4.9 billion from Pakistan in year 2016.
However, after the State Bank of Pakistan made correction in the World Bank’s estimation of bilateral remittances, the World Bank clarified about the exaggerated figures reflected in its report.
Though NAB has taken notice of this unusual amount outflowed from Pakistan to India now but it was initially highlighted by the media of both the countries in 2015. The same issue again surfaced in 2016 when the international financial institution published its annual report of 2016’s bilateral remittances. The State Bank of Pakistan then clarified it and highlighted the errors of World Bank’s report.
In October 2015, the State Bank of Pakistan clarified that the outflow and inflow of workers’ remittances to and from India, as per the balance of payments records, are negligible as $20 thousand and $327 thousand for 2014 respectively. The total payments and receipts to and from India, as per the balance of payments records, are $1,772 million and $479 million 2014 respectively.
Similarly, in September 2016 the SBP once again clarified that it must be noted that the factbook data on bilateral remittance flows are estimates (not the actual flows), which are based on a number of assumptions about migrant stock, per worker income, etc. The methodology used to estimate these numbers is based on a World Bank’s Working Paper by Ratha, Dilip, and William Shaw (South-South migration and remittances. No.102. World Bank Publications, 2007).
This methodology has serious issues, particularly in case of Pakistan, as also acknowledged by the authors themselves stating that “Interpreting the meaning of migrant stocks also presents some difficulties. Pakistanis in India and Russians in Ukraine became migrants following partition of the original country.” Thus the study is clearly flawed as the migrants at the time of Indo-Pak partition in 1947 had become citizens of Pakistan. Therefore, SBP categorically rejects such estimates as these are contrary to facts and do not make sense.
The actual balance of payments data shows that outflow of workers’ remittances from Pakistan to India were $116 thousands in FY16 and the inflows from India to Pakistan were $329 thousands. The value of Pakistan’s exports to India was $425 million, while imports from India amounted to $1,415 million, during FY16.
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