The surge in remittances sent home by overseas Pakistanis, recorded at $3 billion in July, marks a significant 48% increase compared to same period last year. This development is a source of satisfaction and optimism for our economy, which has long relied on remittances as a crucial pillar for economic stability and growth.
As reported by State Bank of Pakistan (SBP), this upward trend in remittances not only bolsters household incomes but also contributes to country’s external account, supporting currency stabilisation and improving chances of a current account surplus. Remittances from overseas Pakistanis have consistently played a vital role in sustaining nation’s economy. These funds, often sent for subsistence of families back home, have served as a lifeline for many households, particularly during challenging economic times. The latest figures suggest that this trend has not only continued but has strengthened, providing much-needed relief to country’s external account at a time when it is most needed. However, while remittances are essential, we must also recognise the untapped potential of affluent diaspora. Many other countries have successfully leveraged the wealth and expertise of their overseas communities to drive economic growth and transformation. For instance, India has witnessed remarkable economic progress, in part due to significant investments made by its diaspora in various sectors, including technology, real estate and industry.
Pakistan, unfortunately, has lagged in attracting similar levels of investment from its diaspora. The reasons for this are multifaceted, ranging from concerns about political instability and security to a lack of confidence in business environment. To change this scenario, we must engage proactively with its diaspora, offering them required confidence and incentives to invest in their homeland. The potential benefits of attracting diaspora investment are immense. Such investments could uplift key sectors like industry, information technology, and agriculture, driving job creation, technological innovation and overall economic growth.
To realise this potential, a comprehensive plan must be developed that envisages special incentives for overseas Pakistanis willing to invest in Pakistan. These incentives could include tax breaks, simplified regulatory processes and investment protection guarantees.
