LAHORE: Federation of Pakistan Chambers of Commerce and Industry President Mian Anjum Nisar on Saturday stressed the need for more incentives for oversees Pakistanis to further escalate foreign remittances, besides enhancing investment by Pakistani expatriates as the inflow of foreign currencies has slowed down in August from the record high of previous two months though remaining strong at over $2 billion.
If the government assists overseas Pakistanis and provides them incentives, they can play a pivotal role in boosting Pakistan's economy through their remittances and investments for the socio-economic prosperity, said the FPCCI President in a statement. "The Pakistan Remittances Initiative (PRI) has started giving results following the reopening of businesses in major countries of Europe, the US and the Middle East, leading to improvement in remittances' inflow for the third consecutive month from June to August contrary to the anticipation of 12 percent drop in remittances to five Asian nations, including Pakistan, in the second half of 2020 by the top global credit rating agencies," he added.
It is a good step that the government has allowed overseas Pakistanis to open and maintain bank accounts in local and foreign currencies in Pakistan through mobile and internet banking under the new digital account initiative which will definitely improve the inflow of workers' remittances and foreign exchange reserves through the digital account, he added.
Mian Anjum Nisar said that foreign remittances flows are the only hope which can support the current account balance as the GDP growth is expected to decelerate in FY21 amidst low volumes of foreign direct investment declining trend of exports which have dipped by almost 20 percent in August. He warned that high workers' remittances in June-Aug have been received on the back of temporary factors including the impact of lockdown restrictions on transferring funds.
Remittances remained high as overseas Pakistanis continued to send money through formal banking channels in absence of parallel illegal channels like Hundi and Hawala and temporary suspension of international flights amidst Covid-19.
He lamenting the gloomy picture of Pakistan's position in the region with regard to its GDP growth and said that upward trend in remittances to Pakistan from overseas workers is a positive news for the country's economy, as the overseas workers sent $2.095 billion in remittances in August 2020, reporting 24 increase than August last year. For the first two months of this fiscal year, Pakistan's remittances are up 31 percent over the same period of last year. Quoting the data, he said that inflows from Saudi Arabia increased by 18 percent to $593 million in August. Inflows surged by 51 percent to $202 million from the United States while they grew by 67 percent to $302 million from the UK.
The oversees Pakistanis can invest in housing sector, agriculture, transportation and various other industries, which have huge potential. The government has badly failed to attract foreign investment because the persisting process of approval of projects discourages the investors, he added.
He asked the bureaucracy to mould simple procedures by revisiting the existing processes so that the investors could be facilitated. He called for lowering of import duty on smuggling prone items, increasing the share of direct taxes in revenue and decreasing the slab of indirect taxes to achieve the key economic targets set for the year 2020-21.
Copyright Business Recorder, 2020
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