LAHORE: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar Saturday called for more incentives for overseas Pakistanis to further escalate foreign remittances, besides enhancing investment in the country by Pakistani expatriates, which can play a pivotal role in boosting the economy of Pakistan through investments for socio-economic prosperity.
The FPCCI president said that the inflow of foreign currencies by overseas Pakistanis has slowed down in August from the record-high of the previous two months, though remaining strong at over $2 billion.
He said that if the government assists overseas Pakistanis and provides them with incentives, they can play a pivotal role in boosting Pakistan’s economy through their remittances and investments for the socio-economic prosperity of the country.
“The FPCCI is happy that the Pakistan Remittances Initiative (PRI) has started giving results following the reopening of businesses in major countries of Europe, the US and the Middle East,” Mian Anjum said. He added that the initiative had led to the improvement in remittances’ inflow for the third consecutive month from June to August, contrary to the anticipation of 12 per cent drop in remittances to five Asian nations, including Pakistan, in the second half of 2020 by the top global credit rating agencies.
The president observed that the government’s announcing of incentives for global and domestic banks and remittance-transferring firms to make the inflow of foreign currencies faster, cheaper and more convenient under the PRI were appreciable.
“It is a good step that the government has allowed overseas Pakistanis to open and maintain bank accounts in local and foreign currencies in Pakistan through mobile and internet banking under the new Digital Account initiative, which will definitely improve the inflow of workers’ remittances and foreign exchange reserves through the digital account,” he opined.
He said that foreign remittances flows are the only hope which can support the current account balance, as the GDP growth is expected to decelerate in FY21 amidst low volumes of foreign direct investment and declining trend of exports, which have dipped by almost 20 per cent in August.
The FPCCI president warned that high workers’ remittances in June-Aug have been received on the back of temporary factors, including the impact of lockdown restrictions on transferring funds.
Remittances remained high, as overseas Pakistanis continued to send money through formal banking channels in absence of parallel illegal channels like hundi and hawala, and temporary suspension of international flights amidst Covid-19.
The FPCCI president, lamenting the gloomy picture of Pakistan’s position in the region with regards to its GDP growth, said that upward trend in remittances to Pakistan from overseas workers was positive news for the country’s economy, as the overseas Pakistani workers sent $2.095 billion in remittances in August 2020, reporting 24 increase than August last year.
For the first two months of this fiscal year, Pakistan’s remittances are up 31 per cent over the same period of last year. Quoting the data, he said that inflows from Saudi Arabia increased by 18 per cent to $593 million in August.
“Inflows surged by 51 per cent to $202 million from the United States while they grew by 67 per cent to $302 million from the UK,” he added.
Mian Anjum noted that structural reforms can revive Pakistan’s economic growth with a major focus on incentives for oversees Pakistanis workers and industrialisation.
He remarked that overseas Pakistanis can invest in the housing sector, agriculture, transportation and various other industries, which have huge potential. The government has badly failed to attract foreign investment because the persisting process of approval for projects discourages the investors, he added.
The FPCCI president requested the bureaucracy to mould simple procedures by revisiting the existing processes so that investors could be facilitated, calling further for continuation and consistency in long-term policies once they are announced, as changes and revisions hurt the industrialists’ plan of production and purchases and booking of orders, which is made according to the policy announcement.
Mian Anjum Nisar observed that the country has been unable to achieve its full export potential and product diversification owing to limited access to raw-material, and to this effect, the application procedures for temporary import schemes should be simplified so that exporters are able to achieve price competitiveness and product diversification.
Calling for the lowering of import duty on smuggling prone items, Anjum Nisar called for increasing the share of direct taxes in revenue and decreasing the slab of indirect taxes to achieve key economic targets set for the year 2020-21.
He added that both the exports as well as the local industries should be facilitated, with rules, regulations and procedures for industrial sectors easy enough to enable them to play due role in the economic stability of the country.