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On 21 November, Dawn reported that in July-October remittances fell to USD 9.9 billion and continue to decline. Down 8.6 per cent from USD 10.827billion in July-October last year. If the declining trend continues, total remittances in FY23, ending in June, would remain close to USD 30 billion, lower than the USD 31 billion that flowed in FY22. Remittances from Saudi Arabia, UAE, UK and US make up 68.5per cent of Pakistan’s yearly remittances. But lately, remittances from the first three countries, with a share of 57.7per cent in the total pie, have been falling with little chance of a reversal of this trend, primarily due to economic and expatriate labour market conditions of host countries. Expat Pakistanis in Saudi Arabia are falling because expatriate workers from other countries, including India, are outnumbering expatriate Pakistanis in professional/managerial jobs. Besides, the growing Saudisation of the labour market and growth in opportunities for overseas workers to set up small businesses in Saudi Arabia also influence the volume of foreign exchange sent back home. Pakistan is no exception.
The government and the SBP have recently taken some initiatives to curb inflows of remittances through illegal channels besides cracking down on those money changers involved in this activity. That is a welcome move and must go on. But the policymakers must not overlook the fact that remittances coming in through banking channels keep falling for obvious reasons. Limiting the amount of foreign exchange that people can purchase from the exchange companies and requiring these companies to keep verifiable records of the deals also make sense as the country is braving a foreign exchange crisis. However, for medium- to long-term purposes, there is a need to revisit our remittances policy once again.(Mohiyuddin Aazim, “Why are remittances falling?” Dawn, 21 November 2022)
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