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Tuesday March 19, 2024

Despite denial by WB, SBP: SC’s amicus curiae still believes in $4.9 billion remittances to India

By Waseem Abbasi
May 11, 2018

ISLAMABAD: To the surprise of many, a known Pakistan economist still believes that $4.9 billion transaction from Pakistan to India indeed took place as claimed in the NAB’s controversial press release a few days ago.

Farrukh Saleem, an economy and financial analyst who was appointed amicus curiae by the Supreme Court in the Pakistan International Airlines (PIA) losses case, told The News on Thursday that his conviction is based on the World Bank’s report.

The myth was debunked by none other than the World Bank (WB) itself, State Bank of Pakistan (SBP) and almost all other economists but Dr Farrukh Saleem claims that since the figure is mentioned in WB’s Migration and Remittances Factbook 2016, he believes it’s genuine.

However, in its clarification issued on the same day when the National Accountability Bureau (NAB) announced to probe the matter, the WB itself admitted that the figure of $4.9 billion is just an estimate based on various assumptions quoting a statement by the SBP.

“The figure of remittances from Pakistan to India, during the years 2010, 2011 and 2012 stood at zero. The figure of remittances from Pakistan to India during the years 2013, 2014 and 2015 stood at $4.669 billion, $4.794 billion and $4.693 billion, respectively,” he tweeted after the WB clarification.

His tweets generated lot of response on social media. But Dr Farrukh gracefully chose to avoid answering most of critics on social media. When he was told by The News that economy experts are laughing at the NAB’s claim terming it biggest blunder in the history of the corruption watchdog, he still insisted that there was nothing wrong with the claim that billions of dollars were sent to India from Pakistan.

Dr Farrukh however clarified that the World Bank neither mentioned money laundering allegations nor the name of Nawaz Sharif in its report and according to him this was the only mistake in the NAB’s press release.

When asked on Thursday whether he still believes that $4.9 billion could be transferred from Pakistan to India, he said: “There is no question of my belief or opinion. You need to read the World Bank Factbook which clearly states that money was sent to India. It gives three figures $4.669 billion, $4.794 billion and $4.693 billion for the year 2013, 2014 and 2015.”

When he was informed that the World Bank estimates were made based on various assumptions, Dr Farrukh said the Factbook does not mention assumptions anywhere.

“The book mentions source of data which is IMF balance of payments statistics database (2015),” he said.

Dr Farrukh also quoted the World Bank to defend the data’s validity: “Caveats on the Quality of Data: The Factbook has arguably the most comprehensive collection of data and facts on migration and remittances that are available.” On the other hand, a top economy writer of Pakistan Khurram Husain seems to be on a different universe on the same issue.

“Let’s put it in plain words first: there is no $4.9b worth of remittances going from Pakistan to India. The number is a mere estimate of what the sum could be, if we assume that all those who migrated from India to Pakistan back in 1947 were in fact economic migrants, much like those who have migrated from Pakistan to the Gulf or to Saudi Arabia are,” Khurram Husain wrote in his article in Dawn on Thursday.

Dr Farrukh however did not agree with Khurram Husain. “Yes the issue was raised by Dawn but the question is why the World Bank mentioned zero transfer of remittances to India in 2011 and 2012?” he asked. To a question, he added that in 2013, the PML-N came to power and the money transfer to India started.

“If they were counting people migrating from India as economic migrants, the migration happened in 1947 and why did they only gave figures from 2013 onward?” he questioned again. But the State Bank had categorically stated in its statement issued in September 2016 that 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, the SBP categorically rejects such estimates as these are contrary to facts and do not make sense.

However, Dr Farrukh still does not seem to agree with World Bank, State Bank or all other economic experts of Pakistan.