Islamabad [Pakistan], November 22 (ANI): Remittances from Saudi Arabia, UAE, UK and US make up 68.5pc of Pakistan's yearly remittances. But lately, remittances from the first three countries, with a share of 57.7pc in the total pie, have been falling with little chance of a reversal of this trend, primarily due to economic and expatriate labour market conditions of host countries.
If the declining trend continues, total remittances in FY23, ending in June, would remain close to USD 30 billion, lower than the USD 31 billion that flowed in FY22, reported Dawn.
Remittances continue to decline. In July-October this year, these remittances fell to USD 9.9 billion, down 8.6 per cent from USD 10.827 billion in July-October last year.
Overseas Pakistanis working in Saudi Arabia, UAE and UK are sending less foreign exchange back home than last year. From July-October this year, remittances from these countries fell by 11.7 pc, 9.2 pc and 8.3 pc, respectively, according to the State Bank of Pakistan (SBP).
Expat Pakistanis in Saudi Arabia are falling because expatriate workers from other countries, including India, are outnumbering expatriate Pakistanis in professional/managerial jobs, reported Dawn.
This may frustrate hopes of keeping FY23's current account deficit somewhere around USD 10 billion, more so if stagnant exports don't grow much in the remaining eight months of the fiscal year.
In the first four months of the year (July-October), merchandise exports grew just about 1 pc to USD 9.549 billion, reported Dawn.
Moreover, due to political uncertainty back home growing number of resident Pakistanis continue to invest in the UAE's real estate and retail sectors.
The decline in remittances from the Saudi Arabia (from USD 2.785 billion in July-Oct 2021 to USD 2.459 billion in July-Oct 2022) can also be partly explained in the context of labour export. In the last two years, 292,153 Pakistani went on a work visa to Saudi Arabia; in 2019 alone, 332,764 workers went there, reported Dawn.
The number is growing rapidly (429,649 in 10 months of 2022). But larger export of workforce takes time to translate into thicker remittances. Pakistan must make serious efforts to ensure that the export of workforce to the UAE returns to the levels where it was before the outbreak of Covid-19, reported Dawn.
During July-October 2022, remittances from the UK slipped to USD 1.368bn from more than USD 14.92 billion during July-October 2021. But the reasons for this decline are different.
Also, the government and the SBP have recently taken some initiatives to curb inflows of remittances through illegal channels besides cracking down on those money changers involved in this activity. But the policymakers must not overlook that remittances coming in through banking channels keep falling for obvious reasons, reported Dawn.
Limiting the amount of foreign exchange that people can purchase from the exchange companies and requiring these companies to keep verifiable records of the deals also make sense as the country is braving a foreign exchange crisis. (ANI)