Pakistan’s central bank has recently informed that the country’s foreign remittances fell 19.3% year on year to $2 billion in the first month of the current fiscal year. The remittance inflows decreased by 7.3% month on month basis.
The overseas Pakistanis sent $2.2 billion in remittances to Pakistanis in July, mostly from Saudi Arabia ($486.7 million), the United Arab Emirates ($315.1 million), the United Kingdom ($305.7 million), and the United States of America ($238.1 million).
According to reports, use of unofficial channels for money transfer, Eid factor and difference between official dollar rate and grey channel were the main reasons for a sharp decline in monthly remittances in the past month. The State Bank of Pakistan has proposed certain changes in incentive schemes to attract more remittance and investment from overseas Pakistanis to maintain a healthy flow of foreign remittances which play a crucial role in stabilization of the economy.
Pakistan has been embattled with chronic economic challenges, while multiple factors including low foreign reserves, depreciation of currency, skyrocketing inflation and an all time high political instability coupled with global energy crisis and worst effects of war in Ukraine pushed the South Asian economy on the brink of an economic collapse. During such a crucial period, monetary assistance from friendly nations and remittances sent by the overseas Pakistanis were of great importance for a trembling economy to satisfy its dearly needed oil imports and repayment of loans that was vital to escape a default risk.
However, the recent 19% sharp decline in remittances plunged these figures to $2.03 billion in July compared to the previous year $ 2.51 billion for the same period, which is surely a big dent to the already dwindling economy. Remittances are an important source for foreign exchange and their steady growth and continuous supply not only helped Pakistan in maintaining an improved external economic outlook, support domestic consumption and to alleviate poverty from the country. There were record foreign remittances in the year 2020-2021 during the PTI era and money transferred by overseas Pakistanis touched to $ 30 billion per annum but those figures gradually declined due to volatile currency exchange rate and overseas Pakistanis shattering confidence over the coalition government.
Historically, domestic political tussle also played an important part in lowering foreign remittances as the PTI leadership called on its overseas supporters to short cut their remittances to hit hard on the PDM coalition government as they did in case of Pak-IMF deal through PTI governments in Punjab and the KP. The recent decline in the inflow of the overseas workers’ remittances through the official channels has raised serious concerns regarding Pakistan’s ability to sustain imports payments and timely fulfillment of foreign debt obligations.
Apparently, reduction in inflows of foreign remittances is likely to jeopardize the recent improvement that had been seen in the national economy after approval of a $3 billion standby arrangement with the IMF, while it will also badly affect the accumulation of foreign reserves and would increase dependence on foreign loans. In fact, the issue of foreign remittances is of grave concern for the wellbeing and economic survival of the country. This bulk of money earns by our patriot Pakistani overseas workers through their flash and fluid, and directly reaches Pakistan without use of any begging bowl.
Recently, Pakistani leaders traded their ego and national prestige with the global lender to receive $3 billion support that is insignificant as compared to the foreign remittances which Pakistan receives on a regular basis. Over the years, Persistent economic depletion, periodic economic slowdown and continued addiction of foreign loans is the unceasing dilemma of the Pakistani nation. It is a wake up call for Pakistanis and their so-called pro-claimed national leaders, who must forget politics and resist their ego for the sake of the country and its people, who are currently living in hot water and every passing day adds to their miseries and depravedness.
The global economic crisis had seriously hit all nations including the United States, the UK, China, France and others but domestic political unrest and corruption of the leaders are the fundamental issues that continuously undermines the recovery of certain economies like Pakistan. In the current scenario, charter of economy is the only way forward if Pakistani leaders can sit together to discuss current challenges and pursue a consensus policy to tackle the national issues on a permanent basis otherwise no single group can rescue the nation from this upheaval.
