An official of the State Bank of Pakistan has informed a meeting of the National Assembly Standing Committee on Finance that an amount of more than $7.9 billion has been sent abroad during the last five years. Under the Protection of Economic Reforms Act 1992, the government allows its citizens to take dollars out of the country through foreign currency accounts. However, the individuals require special permission if they want to remit money out of the country for investment. The official also informed the committee that foreign currency account holders are permitted to bring, hold and take out money under certain conditions and they can buy dollars from the open market and send the currency abroad for investment. Another point came to light in the meeting is that Pakistanis have invested $6.6 billion in Dubai real estate market. The foreign currency account holders are apparently free to buy property abroad without any check from the government.
At least $601 million were sent abroad for business and investment during the last three years alone. Another news broke in the meeting was the establishment of the first offshore company in 1992 and foreign currency accounts holders are enjoying immunity since then. The State Bank has been authorized to grant permission to establish businesses abroad if the potential investment is up to $5 million. However, if the investment crosses this slab, the Economic Coordination Committee is the authority to grant the permission. As a matter of fact, there is no harm in investing abroad as hundreds of Pakistanis have invested in Dubai, Sri Lanka, Bangladesh and Malaysia. However, the point to ponder for the government is: why it could not create conducive environment not only to contain the local investors, but also attract foreign investors in the country.
The money sent abroad through legal means is peanuts and just a tip of the iceberg as the actual amount is many time more. The money sent abroad through illegal means falls under the category of money laundering. The national wealth is sent abroad in the shape of dollars and gold and only a few are arrested in the process. A renowned case of a super model is an eye-opener for the nation as how money is made to fly from the country. If the government wants to keep the money within the country, it should create investment opportunities and give tax relief. Investors only take interest in places where their money is safe. The country holds very poor place in the ease of doing business index. The data available with the government shows that lion share of the investment went to Dubai; therefore, we have to revise our economic policies to stop capital flight.
