Pakistan stood among the top markets where airline funds have been blocked from repatriation, according to the trade association of world's airlines – International Air Transport Association (IATA) – which shared the development in a press release on Wednesday.
The statement added Pakistan has blocked $225 million of airline funds for repatriation. Nigeria has blocked $551 million, while Venezuela has to settle $3.8 billion of airline funds that have been blocked from repatriation since 2016, it said.
The IATA represents some 300 airlines comprising 83% of global air traffic.
As per IATA, Pakistan is among the top five nations in the world that have blocked airline funds (excluding Venezuela).
Other countries on the list are Bangladesh, Lebanon, and Algeria, which have blocked $208 million, $144 million, and $140 million, respectively. The aviation body shared that airline funds are being blocked from repatriation in more than 27 countries and territories.
IATA warned that the amount of airline funds for repatriation being blocked by governments has risen by more than 25% ($394 million) in the last six months.
"Total funds blocked now tally at close to $2 billion," informed IATA, which called on governments to remove all barriers to airlines repatriating their revenues from ticket sales and other activities, in line with international agreements and treaty obligations.
“Preventing airlines from repatriating funds may appear to be an easy way to shore up depleted treasuries, but ultimately the local economy will pay a high price. No business can sustain providing service if they cannot get paid and this is no different for airlines,” Willie Walsh, IATA’s Director General, was quoted as saying in the press release.
“Air links are a vital economic catalyst. Enabling the efficient repatriation of revenues is a critical for any economy to remain globally connected to markets and supply chains,” he added.
The development comes as Pakistan faces depleting foreign exchange reserves, with funds held by the central bank standing at a low level of under $8 billion.
Pakistan is currently engaged in talks with multilateral partners and international lenders for inflows to shore up its forex reserves. A falling level of reserves has already taken toll on the country's currency that has depreciated over 21% this calendar year alone.
The Prime Minister's Office (PMO) has also reportedly sought a report from the Finance Ministry on pending foreign exchange approvals from the State Bank of Pakistan (SBP), well informed sources told Business Recorder.
Earlier, it was also learnt that hundreds of containers carrying perishable food items remained stuck at Karachi port owing to "non-availability of foreign exchange as per commercial banks".
In a letter, a copy of which is available with Business Recorder, the trade association informed the Ministry of Commerce on Tuesday that 417 containers carrying vegetables i.e. onion, ginger and garlic worth approximately $5.5 million or Rs1.23 billion were stuck at various terminals of Karachi sea port owing to non-availability of foreign exchange as per statement of commercial banks.
The consignments were reportedly cleared after the commerce ministry's intervention.