FAST and inexpensive disbursal has been one of the major considerations by Overseas Pakistanis while remitting money back home and they often opted for Hundi or Hawala as this also meant convenience and ease of transactions. In this backdrop, the decision of the Government to involve Pakistan Post will surely facilitate faster, cheaper and more convenient flow of remittance into Pakistan.
Under the initiative launched by Prime Minister Imran Khan on Tuesday, remittance beneficiaries can collect their payments free of any charges from post office locations using the National Bank of Pakistan portal. It will also encourage overseas Pakistanis to remit their cash through legal means which would eventually lead to boost foreign exchange reserves of the country and discourage the transfer of funds from foreign countries through illegal means. One can imagine the crucial role of the remittances for Pakistan’s economy by the fact that these constitute 6% of the GDP while exports accounted for 8.5% last year. Experts warn that it would be difficult to manage economy of the country if the remittances were to fall below the mark of $20 billion. There is, of course, potential to increase the flow of remittances through legal means by way of offering the required incentives and the latest initiative might also help increase the flow as Pakistan Post is the largest postal operator in the country with 13,000 branches, 44,000 employees and a vehicle fleet of five thousand. This means that the institution can help speedy payment of remittances to recipients all over the country. One doesn’t know the criteria used for designation of just five hundred post offices for the purpose but it is hoped that the scope would be increased based on experiment and the trend of remittances. This and similar other initiatives can also offer solution to the financial woes of Pakistan Post, which is facing tough competition from private courier services. There is no reason that this premier institution should suffer losses provided its working is modernized and its full potential is utilized through plans like the remittances’ initiative. The announcement of Minister for Communication and Postal Services Murad Saeed that Pakistan Post would become the largest banking network in the country next year in line with the vision of the Prime Minister is welcome as this is the way out. He also shared plans for establishment of 12,000 franchise post offices in collaboration with NADRA and that the number would be increased to 27,000 but extreme care will have to be exercised in selecting private parties for this collaborative arrangement as any financial fraud or scam by franchised post offices would have implications for overall image, reputation and trustworthiness of Pakistan Post. We would also point out that mere incentives like fast and cheaper dispersal of the money would not suffice for meaningfully increasing the flow of remittances. For this to happen, the Government will have to ensure that its tax policy and laws do not discourage Overseas Pakistanis to remit more money back home besides improving overall economic conditions of the country.
