Money from abroad

There is some progress to report on the promise by the PTI that it would be able to encourage overseas Pakistanis to send billions to Pakistan. While it seemed that the promise was that the money would start flowing as soon as Imran Khan became prime minister, the government has quickly realised that this is not happening. It is now working on announcing a special package for overseas Pakistanis to encourage them to double their remittances. Prime Minister Imran Khan believes the package could help increase the flow of remittances from $20 billion to around $40 billion. If it happens, this would place Pakistan second behind India in the value of remittances that are injected into its economy, but this is also what makes such a stunning increase to be tenuous at best. Where will the extra $20 billion per year come from? And, if it exists, where is the evidence? Expatriates can be assumed to have any amount of money that one wants to imagine because the documentation simply does not exist. For example, would a Pakistani worker in a construction project in Dubai have more money to repatriate than he already does? What about a Pakistani worker at a shawarma restaurant in Spain?

Many Pakistanis who work abroad are already doing their best to support their families. In many cases, this means living in terrible conditions to make sure that whatever savings they have are sent back home. The richer Pakistani expatriates are likely to be saving to ensure that they can buy their homes or fund their children’s education. One would suggest that the first step before announcing such a package should be to check whether the capacity and desire to repatriate more exists at all. This should be the task for the Ministry of Finance, FBR, SBP and Nadra as they work out how to improve remittances. Once there is a clearer idea of how much extra remittances can be sent back, it would be important to remove the hindrances. One of the key hindrances remains the state of the Pakistani economy. For example, if the value of the Pakistani rupee continues to fall, then the incentive of sending money back to Pakistan is reduced. One could send fewer dollars for the same spending capacity and preserve the value of the foreign currency one earns until the rupee stabilises. Moreover, sending more money into a weak economy does not sound like a good investment. It would be important to protect the property of overseas Pakistanis. A more well-rounded approach to the issue should be taken. To begin with, the government could protect the rights of Pakistani workers abroad more than the previous government, which abandoned thousands of Pakistani workers in Saudi Arabia. As it stands, Pakistanis working abroad have little reassurance that they are valued by the Pakistani government. Remittances are meant for their families, not the country. Perhaps that can change, but it needs a lot of work.