Tag: Overseas Pakistanis

  • World Bank forecasts 7% growth in Pakistan’s remittances for 2024

    World Bank forecasts 7% growth in Pakistan’s remittances for 2024

    Remittance flows to Pakistan are expected to rebound and grow by approximately 7 per cent, reaching $28 billion in 2024, with a further increase of 4 per cent to around $30 billion in 2025, according to the World Bank’s ‘Migration and Development Brief 40’ released on Wednesday.

    In 2023, Pakistan experienced a 12 per cent decline in remittance inflows, dropping to $27 billion, due to weak economic conditions, including a balance of payments crisis. Despite these challenges, Pakistan emerged as one of the top five recipient countries for remittances in 2023.

    “The top five recipient countries for remittances in 2023 are India with an estimated inflow of $120 billion, followed by Mexico ($66 billion), China ($50 billion), the Philippines ($39 billion), and Pakistan ($27 billion),” the report stated.

    Despite the global demand for labour in countries like the USA and those within the OECD, Pakistan’s internal economic struggles caused remittances to drop.

    The World Bank noted that many remittances were likely sent through informal channels in 2023, due to robust labour market conditions in destination countries.

    “Recent economic crises in Pakistan highlighted that delays in reforms not only deterred Foreign Direct Investment (FDI) but also negatively impacted formal remittance flows,” the report added.

    Home remittances play a crucial role in supporting Pakistan’s external account, stimulating economic activity, and supplementing the incomes of remittance-dependent households.

    During the first 11 months of FY24, workers’ remittances recorded an inflow of $27.093 billion, a 7.7 per cent increase compared to $25.146 billion during the same period in FY23.

    The report also revealed that with a share of 8 per cent of GDP, Sri Lanka and Pakistan are tied as the second most remittance-dependent countries in South Asia. Overall, remittances to South Asia grew by 5.2 per cent in 2023, reaching $186 billion, though this growth rate slowed from 12 per cent in 2022.

    This growth was primarily driven by India, which saw a 7.5 per cent increase to $120 billion, supported by strong labour markets in the United States and Europe.

    The slowdown was partly due to reduced outflows from GCC countries, impacted by declining oil prices and production cuts. Remittance flows to South Asia are projected to grow by 4.2 per cent in 2024.

    The World Bank highlighted that the economic conditions in South Asia’s largest recipients—India, Pakistan, and Bangladesh, which collectively receive 91 per cent of the region’s remittances—will be crucial in driving remittance growth.

    However, a weak economic recovery in Pakistan and Bangladesh poses a significant risk, potentially leading migrants to favour informal money transfer channels, thus reducing formal remittance growth.

  • Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    In May, overseas workers’ remittances soared by 54.2 per cent compared to the same period last year, reaching $3.24 billion, according to the latest data from the State Bank of Pakistan (SBP).

    This significant increase from $2.1 billion in May last year indicates a substantial boost in remittances.

    Month-on-month, there was a notable 15.3 per cent increase in remittances, totaling $2.81 billion in the previous month.

    Cumulatively, in the 11 months of the fiscal year 2023-24, total remittances amounted to $27.09 billion, showing a 7.75 per cent increase from $25.15 billion received in the same period last fiscal year.

    Saudi Arabia retained its position as the leading contributor, with remittances amounting to $819.28 million, marking a 56.4 per cent increase from the previous year. The UAE followed closely, with remittances of $668.48 million, showing a staggering 99.0 per cent year-on-year increase.

    Remittances from Pakistani workers in the UK surged to $473.22 million, a significant 54.4 per cent increase from the same month last year. Meanwhile, inflows from the USA amounted to $359.55 million, up by 39.8 per cent year-on-year.

    Additionally, remittances from Pakistanis working in EU countries witnessed a substantial 36.4 per cent year-on-year increase, reaching $339.99 million, according to the data provided by SBP.

  • New tax rules: Discounts for overseas Pakistanis, higher costs for importers

    New tax rules: Discounts for overseas Pakistanis, higher costs for importers

    In a recent development, commercial importers of new mobile phones are set to miss out on any concessions following the issuance of the new valuation ruling.

    Conversely, a significant benefit has been extended to incoming international passengers, particularly overseas Pakistanis, who can now avail themselves of a depreciation of up to 60 per cent on used or refurbished mobile phones.

    The Directorate of Valuation Karachi’s latest ruling, numbered 1834 of 2023, is positioned to ease processes for overseas Pakistanis.

    However, it paints a different picture for commercial importers dealing with new mobile phones, who are now obligated to pay duties and taxes based on relatively higher customs values.

    The new ruling encompasses several additional models to refine the assessment of duties and taxes.

    Regrettably, the ruling does not offer any respite for commercial importers, placing the onus on them to adhere to the heightened customs values.

    In contrast, overseas Pakistanis stand to benefit from the increased depreciation rates outlined in the ruling, reaching up to 60 per cent for phones up to five years old brought in by incoming international passengers.

    Under the provisions of the new ruling, customs values for used or refurbished mobile phones imported by legitimate passengers will be assessed, considering the allowance for depreciation as stipulated in the provided tabulated values.

    For brands and models imported in commercial quantities but omitted from the annexure, clearance collectorates are advised to assess them under Section 81 of the Customs Act, 1969.

    Subsequently, a reference should be forwarded to the Directorate for the final determination of their values, according to the ruling.

    Sources indicate that overseas Pakistanis will find relief in the ruling due to the augmented depreciation rates, offering a substantial advantage for phones up to five years old.

    Meanwhile, commercial importers are left without any reprieve, as the new models of mobile phones will incur higher prices compared to their less-aged counterparts.

    This policy aims to curtail under-invoicing margins for both existing and new models of branded mobile phones.

  • Human trafficked beggars from Pakistan arrested in alarming numbers abroad

    Human trafficked beggars from Pakistan arrested in alarming numbers abroad

    The Senate Standing Committee on Overseas Pakistanis was briefed on a concerning issue whereby a significant number of beggars are being trafficked abroad. Zulfikar Haider, the Secretary of the Overseas Ministry, brought this matter to light during a Senate panel discussion centred on the migration of both skilled and unskilled labourers from Pakistan.

    Haider revealed that an alarming 90 percent of beggars apprehended in foreign countries happen to be Pakistani nationals. This predicament has led to a notable strain on foreign jails, with reports from the ambassadors of Iraq and Saudi Arabia attesting to the overcrowding of their detention facilities due to these arrests.

    During the course of the discussion, Secretary Haider also pointed out a troubling trend where Japan has emerged as a newfound destination for such beggars.

    According to ARY News, Senator Rana Mehmoodul Hasan highlighting the varying demands placed on Japan for skilled workers from different countries, including India, Nepal, and Pakistan, each sending a distinct number of individuals to meet these demands.

    Senator Hasan further raised the issue of unemployment among engineers in Pakistan, highlighting that a staggering 50,000 engineers in the country are currently without employment opportunities.

    In the context of the Middle East, the senator provided statistics, noting that approximately three million Pakistanis reside in Saudi Arabia, while another 1.5 million have sought employment in the UAE, with an additional 0.2 million in Qatar.

    It is imperative to underscore that beggar syndicates are also exploiting minors, subjecting them to harsh weather conditions for personal gain. These syndicates have devised new tactics to extract money from people, contributing to a distressing trend whereby the number of beggars has doubled within a mere three-year span, as per recent reports.

  • Remittances to Pakistan decline by 19.3% to $2 billion in first month of fiscal year

    Remittances to Pakistan decline by 19.3% to $2 billion in first month of fiscal year

    Pakistan has experienced a notable decline in remittances during the first month of the current fiscal year, as data released by the central bank reveals a year-on-year drop of 19.3 per cent, amounting to $2 billion. This concerning trend was further accentuated by a month-on-month reduction of 7.3 per cent.

    In the month of July, remittance inflows from Pakistanis residing abroad amounted to $2.2 billion. The distribution of these remittances showed that Saudi Arabia held the top spot with a contribution of $486.7 million, followed by the United Arab Emirates with $315.1 million. The United Kingdom and the United States of America followed closely with $305.7 million and $238.1 million, respectively.

    Economic analysts anticipated this decline in remittances for the month of July, given the post-Eid ul Adha period. The reduction was expected, as Pakistani expatriates tend to increase their cash transfers back home during festive seasons. Interestingly, it seems that some of these remittance inflows have been diverted to the grey market due to more favourable exchange rates for dollars.

    Samiullah Tariq, the head of research at Pak-Kuwait Investment Company, shed light on this shift: “In my view, as this was the month after Eid ul Adha, flows were relatively subdued. Some Pakistanis are opting for unofficial channels to transfer money.” The continuous devaluation of the Pakistani currency is also impacting investment sentiment among overseas Pakistanis, discouraging them from contributing more significantly to the economy.

    The recent release of these remittance statistics coincides with the International Monetary Fund’s (IMF) approval of a $3 billion bailout package for Pakistan. The nation’s economy had been teetering on the edge of default due to mounting debt obligations. Governor Jameel Ahmad of the State Bank of Pakistan (SBP) reassured that the SBP remains committed to upholding its obligations, including maintaining a controlled difference between the interbank and open market exchange rates, as specified in the agreement with the IMF.

    Fahad Rauf, the head of research at Ismail Iqbal Securities, voiced his concern over the decline in remittances: “The extent to which remittances have declined is indeed worrying. Unofficial channels offering higher rates have played a role in this scenario.” He also highlighted the SBP’s efforts to attract more remittances through proposed changes in incentive schemes, including a 50 per cent increase in the reimbursement rate for Saudi Riyal conversions.

    The SBP’s latest monetary policy statement forecasts the current account deficit for fiscal year 2024 to range between 0.5 per cent and 1.5 per cent of the gross domestic product. This projection takes into account both evolving domestic and global economic conditions. The SBP remains optimistic about the prospects of multilateral and bilateral inflows following the IMF’s stand-by arrangement, which is expected to bolster external buffers and address short-term external financing requirements.

    As the nation navigates through these challenges, the market-determined exchange rate will continue to play a pivotal role as the first line of defence against external shocks, further supporting the buildup of reserves. With a cautious eye on global commodity prices and a moderate domestic economic recovery, Pakistan aims to manage its imports and strengthen its economic stability.

  • Remittances in June 2023 decline by 21.4%, hitting $2.2 billion: SBP

    Remittances in June 2023 decline by 21.4%, hitting $2.2 billion: SBP

    In June 2023, remittances experienced a year-on-year decrease of 21.4 per cent, falling to the $2.2 billion mark compared to $2.8 billion in June 2022, according to data released by the State Bank of Pakistan (SBP).

    Simultaneously, cumulative remittances sent by overseas Pakistanis for the 12-month period ending on June 30, 2023, diminished to $27 billion, reflecting a 14 per cent decline in the financial year 2022-23 when compared to the record-high inflows of $31 billion reported in the previous financial year.

    In terms of monthly trends, remittances received by the country from overseas Pakistanis increased by 3.85 per cent from $2.102 billion in May to $2.18 billion in June 2023.

    The primary sources of remittance inflows during June 2023 were Saudi Arabia ($515 million), the United Kingdom ($343 million), the United Arab Emirates ($325 million), and the United States ($272 million).

    Moreover, proceeds from expatriates residing in European Union countries showed an 11 per cent month-on-month increase in June 2023, amounting to $272 million. Similarly, remittances from other GCC countries (Bahrain, Kuwait, Qatar, and Oman) totaled $271.9 million.

    The decline in inflows reported for FY23 can be attributed to various austerity measures implemented by the coalition government and the banking regulator. These measures included high taxes on cash held in banks and exchange companies, aimed at increasing remittance collections.

    Import restrictions, coupled with unfavorable domestic economic conditions during FY23, had a detrimental impact on remittance inflows. These factors resulted in reduced demand and led to a diversion of a significant portion of expatriate inflows towards informal currency exchange channels.

    Fundamentally, the contraction in imports caused by policy measures, along with demand suppression, exchange rate depreciation, and the preference for undocumented channels to maximise profits, all contributed to curbing remittance inflows during FY23. As a consequence, the expatriate Pakistani community residing in various countries faced inadequate facilitation.

  • ‘Overseas Pakistanis ki maujain’: Cabinet approves separate judicial system for expats

    ‘Overseas Pakistanis ki maujain’: Cabinet approves separate judicial system for expats

    Federal Minister for Information and Broadcasting Fawad Chaudhry, while addressing a press conference after the cabinet meeting, said that Prime Minister (PM) Imran Khan has approved a separate judicial system for Overseas Pakistanis.

    Fawad shared that the cabinet has approved the formulation of a separate judicial system for the expats for summary trial.

    The minister further said that the implementation of the laws will come in accordance with PM Khan’s vision to facilitate overseas Pakistanis, who are a precious asset of the country.

    The federal minister further revealed that a similar judicial system will also be established in Khyber Pakhtunkhwa and Punjab, where PTI is in power.

    Fawad said that the administrative issues of courts should be dealt with in line with the view of the government.

    “Pakistan is facing an administrative crisis due to stay orders given by the courts,” said Fawad, adding that lawsuits are “cheaper in Pakistan than in the world”.