Pakistan receives $1.375b as Workers’ remittances from Overseas
PakistanTimes.net Staff Report

KARACHI: Pakistan received an amount of $1.375 billion as workers’ remittances during the first four months of the current fiscal year (July to October 2005), registering an increase of 4.34 percent.

The country received $1.317 billion in the corresponding period of the last fiscal year. The monthly average remittances for the period (July-October 2005) is $343.79 million as compared to $329.49 million during the same period last year.

The inflow of remittances during the first four months from United States, Saudi Arabia, United Arab Emirates, GCC countries (Bahrain, Kuwait, Qatar and Oman), United Kingdom, European Union countries amounted to $391.80 million, $232.59 million, $196.28 million, $181.19 million, $148.68 million, $39.73 million, respectively. Last year Pakistanis living in these countries sent $407.42 million, $205.62 million, $214.01 million, $166.12 million, $115.91 million and $31.30 million, respectively.

Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during July to October period amounted to $177.79 as compared to $175.53 million in the corresponding period of last year.

Inflow Mounts

The inflow of remittances into Pakistan form almost all countries of the world increased last month as compared to October, 2004. During the last month, Pakistani workers remitted $372.50 million as against $334.80 million in October 2004, depicting an increase of $37.70 million or 11.26 percent.

According to the break up Pakistan received workers’ remittances during October, 2005 from USA ($108.47 million), Saudi Arabia ($58.27 million), UAE ($54.56 million), GCC countries including Bahrain, Kuwait, Qatar and Oman ($50.40 million), UK ($37.72 million), and EU countries (12.88 million).

In October last year Pakistan received $93.61 million, $47.10 million, $52.88 million, $41.37 million, $41.09 million and $6.94 million. Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during October 2005 amounted to $49.28 million as compared to $51.39 million during the same month last year.

In the last fiscal year ending in June 2005, net remittances from overseas Pakistanis rose to $4.153 billion from $3.826 billion a year earlier, thus showing an increase of 8.5 per cent.

Hundi or Havala

Central and commercial bankers and executives of foreign exchange companies say that Pakistan can generate $6 billion to $8 billion remittances from overseas Pakistanis. But what keeps the official inflow of remittances far lower than this level is that much of it finds it way into the country through illegal and informal modes of transfer including Hundi or Havala.

Time and again the SBP has warned exchange companies allegedly involved in this business and has also taken some actions against some of them. But it seems the central bank needs to do a lot more to bring the remittances flow to the official channel. Policy makers hope that remittances during the current fiscal year would remain slightly below $4 billion.

Pakistan largely depends on inflows from overseas Pakistanis to bridge its trade deficit. The country’s imports rose to around $19 billion while the exports could be increased to $14 billion, leaving a huge gap of $5 billion.●