KARACHI, SEPT 26 – Federation of Pakistan Chambers of Commerce and Industry President Mian Anjum Nisar has recommended more incentives for oversees Pakistanis to further escalate foreign remittances, besides enhancing investment in the country by Pakistani expatriates, as the inflow of foreign currencies by overseas Pakistanis has slowed down in Aug from the record high of previous two months though remaining strong at over $2 billion.
He said that if government assists overseas Pakistanis and provides them incentives, they can play a pivotal role in boosting Pakistan’s economy through their remittances and investments for the socio-economic prosperity.
“The FPCCI is happy that the Pakistan Remittances Initiative (PRI) has started giving results following the reopening of businesses in major countries of Europe, the US and the Middle East, leading to improvement in remittances’ inflow for the third consecutive month from June to Aug contrary to the anticipation of 12 percent drop in remittances to five Asian nations, including Pakistan, in the second half of 2020 by the top global credit rating agencies,” he observed.
Mian Anjum Nisar observed that the government’s present efforts are appreciable, announcing incentives for global and domestic banks and remittance-transferring firms to make the inflow of foreign currencies faster, cheaper and more convenient under the PRI. It is good step that the government has allowed overseas Pakistanis to open and maintain bank accounts in local and foreign currencies in Pakistan through mobile and internet banking under the new Digital Account initiative, which will definitely improve the inflow of workers’ remittances and foreign exchange reserves through the digital account, he added.
He said that foreign remittances flows are the only hope which can support the current account balance, as the GDP growth is expected to decelerate in FY21 amidst low volumes of foreign direct investment declining trend of exports which have dipped by almost 20 percent in August.
The FPCCI President warned that high workers’ remittances in June-Aug have been received on the back of temporary factors, including the impact of lockdown restrictions on transferring funds.
Remittances remained high, as overseas Pakistanis continued to send money through formal banking channels in absence of parallel illegal channels like Hundi and Hawala and temporary suspension of international flights amidst Covid-19.
He, lamenting the gloomy picture of Pakistan’s position in the region with regard to its GDP growth, said that upward trend in remittances to Pakistan from overseas workers is a positive news for the country’s economy, as the Overseas Pakistani workers sent $2.095 billion in remittances in August 2020, reporting 24 increase than August last year. For the first two months of this fiscal year, Pakistan’s remittances are up 31 percent over the same period of last year. Quoting the data, he said that inflows from Saudi Arabia increased by 18 percent to $593 million in August. Inflows surged by 51 percent to $202 million from the United States while they grew by 67 percent to $302 million from the UK.
He noted that structural reforms can revive Pakistan’s economic growth with major focus on incentives for oversees Pakistanis workers and industrialization.
He remarked that oversees Pakistanis can invest in housing sector, agriculture, transportation and various other industries, which have huge potential. The government has badly failed to attract foreign investment because the persisting process of approval of projects discourages the investors, he added.
He asked the bureaucracy to mould simple procedures by revisiting the existing processes so that the investors could be facilitated.
Mian Anjum Nisair called for continuation and consistency in long-term policies once it is announced, as changes and revisions hurt the industrialists’ plan of production and purchases and booking of orders which is made according to the policy announcement.
Mian Anjum Nisar observed that country has not been able to achieve its full export potential and product diversification owing to limited access to raw-material and to this effect the application procedures for temporary import schemes should be simplified, so that exporters could be able to achieve price competitiveness and product diversification.
He called for lowering of import duty on smuggling prone items, increasing the share of direct taxes in revenue and decreasing the slab of indirect taxes to achieve key economic targets set for the year 2020-21.
He said that both export as well as the local industries should be facilitated. He was of the view that rules, regulations and procedures for industrial sectors should be easy so that it could play its due role in economic stability of the country.