ISLAMABAD: Overseas Pakistanis living in the UAE and Saudi Arabia sent all-time record remittances to home topping $19.9 billion that are 6.38 percent higher than the government’s target for fiscal year 2016.
According to the SBP spokesman, on a full-year basis, in FY-16 Saudi Arabia contributed 30 percent of total remittances amounting to $6 billion, compared to $5.6 billion in FY-15 while remittances from the UAE rose to $4.36 billion, Khaleej Times reported.
The government of Pakistan set a target of $19 billion in FY-2016. The value of remittances in FY-15 was $18.72 billion, State Bank of Pakistan (SBP), the central bank, reported over the weekend. The remittance forecast for FY-17 is 10 per cent higher than the actual amount received in FY-16. Saudi Arabia and the UAE are expected to stay as lead remitters, followed by the UK and other GCC countries, the SBP spokesman told Khaleej Times. The remittance boom has helped Pakistan meets its forex needs comfortably.
The significance of the remittance inflow is manifold as these form a key component of the balance of payments in a forex-short country, which has to watch out its foreign exchange reserves and foreign trade at all times.
It is also significant because the record-high inflow of remittances took place at a time when low international oil and commodity prices have forced many countries to reduce their development funding and cut down employment of foreign workers.
Financial market analysts and economists have cheered the larger inflow of remittances despite the fact that the subsidy allowed on the remittance business was reduced from July 1, 2015 when the government had decided to slash the actual subsidy from the then prevailing SR25 for each remittance transaction to SR20. It had also increased the minimum transaction amount to qualify for the rebate to $200, or its equivalent in other currencies, from $100.
An official spokesman said, “The government is considering different proposals to substantially boost foreign remittances and foreign exchange reserves. The Gulf region is to be effectively tapped by exporting the maximum manpower. The government is expecting good opportunities of manpower export during Expo 2020 in Dubai. Moreover, massive new construction plans in Saudi Arabia will also provide opportunities for Pakistani manpower export.
Like other Gulf countries, Qatar stands prominently in offering a number of incentives to Pakistan. Qatar is going to host Fifa World Cup in 2022 and has created a huge budget for this purpose.
Qatar will require substantial infrastructure development where Pakistani engineers and workers are expected to find employment opportunities, which will support the inflow of remittances into Pakistan.
