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Expatriates send $667.5m in seven months... can more be done?

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    Expatriates send $667.5m in seven months... can more be done?

    Another very welcome step which hopefully bodes well for Pakistan's economic prospects. It is estimated that between 8 to billion dollars is sent home by overseas Pakistani's each year, though only 1 billion of that comes through normal banking channels. What can the government do to encourage all the billions to come through legal channels and thereby better benefit the national economy?

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    Expatriates send $667.5m in seven months

    By Mohiuddin Aazim


    KARACHI, Feb 22: The foreign exchange sent by overseas Pakistanis rose to $667.5 million in the first seven months of the current fiscal year from $549.3 million in a year-ago period.

    The State Bank statistics show an increase of 20 per cent in home remittances from various countries, including the United States, between July-January 2000-01 as compared to the remittances received in July-January 1999-00.

    Home remittances from Kuwait jumped to $106.8 million from $68 million chiefly because of compensation paid by Kuwait to Pakistani Gulf War affectees.

    But the increase of $38.8 million is a little over one third of the $118.2 million rise in total home remittances of the first seven months of the fiscal 2000-01. That is there has been a rather general upward trend in inflow of foreign exchange through home remittances.

    Bankers say what has helped them attract more foreign exchange through home remittances is a progressive improvement in delivery of the amount sent back home. The state-run as well as the private banks claim they have cut the time taken in the delivery of remittances to 24 hours in the cities and 48 hours in the rural areas. But this claim is hard to digest given the common complaints about delay in the delivery of remittances.

    The statistics show the largest amount of remittances ($189 million) came in from Saudi Arabia followed by the United Arab Emirates ($137 million) and Kuwait ($106.8 million) during the period under review. In the same period of fiscal 1999-2000 home remittances from Saudi Arabia were slightly higher at $190 million; followed by $98.8 million from UAE and $68 million from Kuwait.

    In the first seven months of the current fiscal year remittances from the USA and Dubai have risen significantly compared to the same period of last fiscal year. Remittances from the US rose from $44.8 million in July-January 1999-2000 to $74 million in July-January 2000-01 and those from Dubai went up from $58 million to $95 million.

    Remittances from the UK also increased from about $44 million to about $49 million. Overseas Pakistanis based in Canada, Norway and Abu Dhabi also sent back home slightly higher amounts of foreign exchange in the first seven months of this fiscal year than they had remitted in the same period of last fiscal year.

    And those based in Japan doubled the home remittances-from $0.9 million to $1.98 million.

    Home remittances averaging around a billion dollars per year are the second biggest source of foreign exchange earnings for Pakistan after exports.

    Bankers and financial analysts say home remittances can be increased manifold to help the country meet its foreign exchange liabilities. But the authorities have so far failed to do this.

    Senior bankers estimate that overseas Pakistanis send back home $8-$10 billion every year of which only $1 billion or so comes through banking channel and the rest through Hundi. They say the share of official remittances can be raised significantly by reducing the difference between interbank and kerb market exchange rates and by offering some incentives to those remitting money through banks.

    Over the years home remittances coming through the banking system has fallen not only because of lower interbank exchange rates and inefficient bank services but also due to falling confidence in Pakistan's documented economy. The freezing of foreign currency accounts in May 1998 shattered this confidence so badly that home remittances fell from $1.2 billion in fiscal 1997-98 to only $875 million in 1998-99. In fiscal 1999-2000 home remittances rose to $913 million after partial revival of the confidence. Senior bankers and financial analysts say the figure may cross a billion dollars mark in the current financial year.

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    http://www.dawn.com/2001/02/23/top9.htm

    #2
    legally or illegally money from gulf is going to come back to pakistan. i do not know what pak can do to attract flow of funds from USA or canada. they can open schools for nrp's like schools for nri kids in india. parents who are worried about impact of evil society in west may send kids to these schools while themselves staying back in evil society. some money must be coming for jihad in pak. but that is an old horse and i dont think more money can come for it. pak has some picturusque locations, particularl in northern areas where some resorts etc. can be opened and beer etc. maybe allowed for foreign tourists. i would say that even open the casinos if they are exclusively for foreigners like in nepal. let people spend money in the way they are used to.

    i donno about pak but tourism in india is in bad shape because of indian govt.s attitude. foreigner has to pay more money for every location he visits, wheter taj mahal or konark and not every foreigner has so much money. go to any big city in india and hotel rates start comparing with anywhere in world. that is ridiculous. couple it with inrastructure and people have no reason to visit india. its a pity. even china, which is such a monotonous place, attracts more tourists.

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      #3
      The money coming into pakistan is great relif. It is 'free' forex. We have to make the banking system more profitable then the underground system. The problem was that before the 1st Nawaz govt we had a fixed exchange rate. Now we have a partially fixed rate since the nuke testing. This way certain things like petrol, edible oils, basiclly essentials are imported at the 'govt rate' that is cheaper then the open market rate. The reason for the subsidy is that the essentials will be too expensive if they are imported on the open market rate. The open market rate depends the supply of forex in the country. If people remit money, ie wend forex into pakistan the open rate will fall. The more they do this officially, the more money will be available in the banks for them to loan it to other ppl, the price of the forex will fall. So over all once official process becomes cheaper and more reliable then the traditonal 'kunda' (I think its called) method the cheaper our imports will become and the better off we are.

      In response to the NRI, pakistan has the equivalent OPF (Overseas Pakistanis Foundation) and they have an all girls school in Islamabad, so that overseas children can study in pakistan, especially the girls.

      Pakistans tourisim has been hit hard by things like osama bin laden and kashmir and secular killings. But due to the fact that we have amazing montains (K2, Nammga Parbat, Malka e parbat) and crater lakes like lake saiful maluk we have a lot of european mountain freaks. THe funny thing is that when i was in Kaghan I met a groub of swiss mountain bikers! I was amazed. The tourisim options are endless in Pakistan but have to be focused properly. To let all u guys konw, citizens of every country except India and Nigeria can get a 3 month visa in the airport and that has reduced some of the redtape for tourism. With some political stability I hope things will become better, Insha'Allah

      Comment


        #4
        i donno about pak but tourism in india is in bad shape because of indian govt.s attitude. foreigner has to pay more money for every location he visits, wheter taj mahal or konark and not every foreigner has so much money. go to any big city in india and hotel rates start comparing with anywhere in world. that is ridiculous. couple it with inrastructure and people have no reason to visit india. its a pity. even china, which is such a monotonous place, attracts more tourists.

        I agree the hotels are very expensive. Moreover Indian have to learn how to be courteous and helpful, babus in the tourism are so downright rude and they have no idea what good service means. Even the air-line offices in India give out terrible service, maybe something to do with Indian mind set.

        Although, i agree with charging more for the visit to the monuments..while in England the fees to enter most places was between 15 to 20 pounds. Our monuments such as Kutab Minar are in bad shape and ten thousand of people are using it all the time because of the cheap entry...it should be a life time experience for an individual not an everyday affair.

        I have heard that local in Agra use TajMahal as meeting place. With this kind of heavy usage we will not have the monuments for very long.

        I am sure Pakistan has some very scenic and beaustiful places they can develop as tourist spots.




        [This message has been edited by Rani (edited February 24, 2001).]

        Comment


          #5
          Thought this is as relevant as worries about tourism in India. lol!

          E-greenbacks pip petrodollars in forex pie, balance shifts to West
          HT Correspondent
          (New Delhi, February 25)

          DROVES OF Indian infotech professionals employed overseas are playing a major role in boosting the country's foreign exchange reserves by remitting huge sums of money via private transfers to their homeland.

          Not only has the Infotech boom contributed to forex inflows, it has also led to a shift in the origin of these funds, with the balance tilting considerably in favor of the United States as against the earlier dominance of the Middle East.

          The shift, not only reflects the increasing proliferation of Indian infotech professionals in the Western hemisphere, but holds promise of a new era of economic diplomacy that can safely junk its traditional "Arab blinkers".

          In addition, software service exports have emerged as the second largest source of invisible inflows of foreign exchange. These continued to maintain an upward trend in 1999-2000 and 2000-01. Gross invisible receipts rose by 17.7 per cent from $ 25.78 billion in 1998-99 to $ 30.32 billion in 1999-2000. The Economic Survey has attributed this growth to the continued buoyancy in private transfers and software service exports. Private transfers expanded by 18.8 per cent to $ 12.29 billion in 1999-2000 from $ 10.34 billion in 1998-99. It adds that this figure has been augmented by the inclusion since 1996-97 of local redemption of non-resident Indian (NRI) deposits. During 1999-2000, this amounted to about $ 4.1 billion.

          The survey states that private remittances averaged over $ 8 billion a year during the two year period from 1998 to 2000, as against an annual average of $ 5.9 billion during the previous four years.

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