Pakistani expats need right conditions to invest at home

Remitters should be encouraged to acquire assets, set up businesses, educational and health facilities for their families or in areas they belong to. They need to be integrated into national development programmes.



By Waqar Mustafa (Wide Angle)

Published: Mon 5 Aug 2019, 9:27 PM

Last updated: Mon 5 Aug 2019, 11:29 PM

With 1.6 million Pakistani expatriates in the United Arab Emirates being the top remitters for June, the last month of the fiscal 2019, sending home $356 million, Pakistan has closed the year raking up $21.84 billion in remittances, according to the country's central bank. Up from last year's $19.91 billion, the country has earned around $640 million more than the target of $21.2 billion for the year, ranking it as the fifth highest remittance receiving country in the world. Feeling elated, Imran Khan, the prime minister of the cash-strapped South Asian country, has in a tweet appreciated overseas Pakistani workers - most of them in the Gulf and the Middle Eastern countries - for sending more remittances through banking channels.
Pakistan has acted tough against illegal (hundi and hawala) remittance operators prompting its nearly 10 million offshore natives in the Gulf, the Middle East, Europe, the US, the UK, Malaysia, Norway, Switzerland, Australia, Canada, Japan and other countries to remit money through legal channels, including banks. Illegal ways deprive the country of legitimate taxes as well as foreign exchange. The country has now dished out several incentives aimed at attracting more remittances from overseas Pakistanis. Freelance and information systems services have been allowed to transact up to $1,500 per individual per month. Pensioners can now receive up to Rs250,000 per individual per month.
Residents can easily receive direct payments from overseas Pakistanis to pay for utility bills, education fees of Higher Education Commission-accredited institutions, superstores, insurance companies and credit card bills. Remittances received by 'reputed' real estate builders or developers and housing societies from overseas Pakistanis on account of purchase of property such as residential and commercial houses, plots, flats and buildings, etc. have also been allowed except remittances for equity or participation in an enterprise. The government will pay an incentive of Rs2 for the use of mobile wallet on each transaction of $1 remittance as airtime; this amount was previously one rupee. For foreign exchange companies and banks that bring in 15 per cent more remittances than the previous financial year, an incentive of Rs1 will also be granted against each $1 incremental remittance transaction. A survey will also be done of Pakistani workers employed abroad, especially in Middle Eastern countries, for their feedback on improving the home remittance processes. The State Bank of Pakistan has also allowed foreign currency exchange companies to initiate work on directly attracting worker remittances from countries such as Spain from where the inflows remain nominal. The exchange firms would offer incentives in 'cash and kind' to the Pakistanis in these countries to convince them to send remittances through them.
Attracting remittance needs a holistic approach. The country needs to crack down on illegal intermediaries. It should educate workers on the legal process for migration and provide subsidised services for low-income migrants to find employment with good employers.
Legal channels need to reduce remittance transfer costs to match theirs with those of the illegal ones. Banks should offer higher interest rates for migrants so that they increase their deposit base, savings and credit.
Remitters should be encouraged to acquire assets, set up businesses and set up educational and health facilities for their families or in areas they belong to, for fostering higher and inclusive growth. They need to be integrated into national development programmes.
Their investments need to be secure from threats such as land grabbing and red tape. The government has promised setting up special courts to take up and settle within a month non-resident Pakistanis cases of land grabbing. The earlier the promise is kept, the better. Also the government has launched an app, "Call Sarzameen", to help Pakistanis abroad with visa, work, legal, and family issues.
Prime Minister Imran Khan calls overseas Pakistanis the "greatest asset". That they are, of course! But these assets need an atmosphere conducive to their growth both abroad and at home. Only by building their trust can Pakistan earn, develop, and prosper more.
Waqar Mustafa is a multimedia journalist and commentator based in Lahore, Pakistan


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