Promoting remittances through banks
IN 2022 Pakistan’s total export earnings stood at $31Billion while remittances through official banking channels stood at $32 Billion annually. Expatriate Pakistanis annually, most of them working on work visas, remit money to support their dependent families living back home in Pakistan and they will continue to do so.
The bulk of these remittances, from skilled/non-skilled expats originate from the Gulf and Middle East. In 2022-23 remittances through banking channels declined to $29.87Billion, mainly because of the increase in difference between interbank state and open market rate. I fail to understand what stops the Federal Government and Ministry of Finance to offer incentives, similar to what they offer to our exporters, so that the impact of the ever-widening gap between Interbank and Open Market exchange rate is bridged and bulk of remittances are sent through proper banking channels.
There is no rocket science involved, except the visible conflicts of interest of those at helm in the country, who may themselves seek to live abroad, when not in power, or post-retirement from government service. There is hardly any government department, including the judiciary and other constitutional institutions of state, whose former paid employees, holding important posts, have not migrated within months or a year after retirement.
Everyone who matters is aware that the Hundi system or its like exists, and is operating successfully in Pakistan. Most of the corrupt members of the paid and political elite are beneficiaries of these non-banking channels in transfer of money abroad. Every year thousands of these paid elite, including those holding sensitive posts relating to national security, migrate to countries like Canada, UK, USA etc. and other safe havens in the Gulf, immediately after retirement. Their families have already been relocated there.
The Hundi system and other non-banking channels offer poor expatriates’ attractive rates, higher than prevailing Interbank rates. The Reverse Flow of Foreign Exchange from Pakistan is facilitated by non-banking channels, which rely mostly on expatriates eager to send their savings to support their families and are attracted by much higher exchange rates offered.
The elitist few who are beneficiaries of real estate allotments, land developers and the black money, or proceeds of crime, earned by powerful people is given to the families of expatriates living in Pakistan, whilst the foreign exchange savings of expatriates is handed over abroad, to those seeking to transfer their ill-gotten or undeclared earnings to foreign safe havens.
The BP190 Million confiscated as proceeds of crime from a land tycoon was confiscated by UK NCA. It was supposed to be returned to the National Exchequer of Pakistan, being proceeds of crime that occurred there. Yet it was adjusted to what the Land Tycoon owed, for what he had agreed to pay voluntarily for illegal takeover of over 16,500 acres of land held by Malir Development Authority.
—The writer is contributing columnist, based in Lahore.
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