According to a report from Washington, financial experts and agents at a presentation on money transfer to Pakistan by a reputed American exchange firm urged Pakistani expatriates to remit earnings back home by legal means or formal channel, which is not only transparent, accurate and safe but also provides instant boost to the national economy by generating healthy activity and creating new employment opportunities.
As for the demerits of illegal channels, such as 'Hawala' or 'Hundi', they observed, and rightly so, that though evidently benefiting individuals to a certain extent, these hardly serve the country and its people. The importance of the presentation was evident from the active participation in it by the Pakistan Post Office (PPO) and the National Bank of Pakistan.
Recalling that the US exchange firm commenced operations in Pakistan in 1997, and subsequently introduced an expanded network of service from 2002 to an increased clientele, a high official of the firm said that both PPO and NBP gave full co-operation in its operations and facilitated money transfer at high levels of efficiency and accuracy, with saving of time and money on a wider network with lower service charges.
In joining hands with a foreign private firm in an effort towards promoting increasing use of legal channels of remittances to the country, both the NBP and the PPO have set an example, in a way, of private-public co-operation which other government departments may find opportune to emulate.
For, as the NBP Executive Vice-President is reported to have revealed on the occasion, out of the bank's 1,200 branches, 654 offer the firm's services, as the bank enjoys the trust of the masses with assured security, while its expanded network ensures speed and accuracy in the process. As he pointed out, home remittances constitute an important source of revenue for Pakistan, on which depends the livelihood of a large number of families in the country. As against this, the use of informal channels for money transfer greatly reduce the number of beneficiaries.
Recalling that until recently the Pakistani emigrants mostly remitted their money by illegal means, but trend has now been halted, so much so that out of Rs 8 billion remittances, Rs 4 billion only are now transferred by legal means.
The welcome change in the trend of foreign remittances, mostly from the United States, is largely attributable to considerable straightening of the formal economy in Pakistan, thanks to widespread reforms, in the wake of October 1999 change.
The enabling role the NBP and the PPO are playing in money transfer in collaboration with a private foreign agency, would have remained unthinkable without macro-stabilisation of the country's economy, as reflected in impressive GDP growth, large-scale industrial production, low interest rates, along with all round improvement in the performance of the banking and financial sector.
Little wonder, all this put together will appear to have also made for an increase of Rs 4.2 billion in the home remittances of the expatriate Pakistanis. This increase, though, can also be viewed as linked to certain other factors.
This has reference to the increasing urge for homecoming among overseas Pakistanis in large numbers in the aftermath of the US 9/11 incidents, which marked the beginning of a world-wide change, the United States in particular, ushering in hard times for Muslim immigrants of all origins.
The uncertainties thus created for them in the shape of close monitoring of their monetary transactions, seem to have prompted many among them to transfer money back home through legal means and legitimise it for understandable reasons. However, the ratio of legal to illegal transfers of money still leaves a great deal to be desired. For while increasing legal transfers can prove instrumental in the growth of formal economy from reduction in the quantum of black money in it, its reduced presence will still continue to feed evils like smuggling, drug trafficking and proliferation of weapons, besides the menacing spread of terrorist activity in one form or the other.
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