Overseas Pakistanis added $1.3bn more this year to the official economy and to the disposal income of 1.6m households they support.
IRSHAD SALIM — Pakistan, in a first, has crossed the annual target set for remittances it receives from nearly 10m overseas Pakistanis (OPs).
In the fiscal year that ended June 30, the inflows recorded are around $640 million (3%) higher than the set target of $21.2 billion.
The remittances are also around 10% higher than $19.91 billion received in the previous fiscal year (Jul 2017-Jun 2018).
If converted into Pak Rupee, the total remittances received as the currency slid (from Rs 120 to Rs158), translate into a substantial increase in disposal income of those households which had received them.
Imagine, our expats added $1.3bn more this year to the country’s kitty in a business as usual way, and without asking for proportionate number of seats in the Senate or in the Lower House (they constitute the largest politically marginalized constituency).
With nearly 10m OPs, and 6 being the average size of household members in the country (according to 2017 census), more than 1.6m families which comprise the OP ecosystem benefited with the increase as well as the devaluation– other things being equal.
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The $1.3bn additional remittances received by these families– at an average Pak Rupee value of Rs139 (Rs120 vs Rs158) –adds up to over Rs15,000 increase in their disposal income– nearly 1.6m households OPs’ support families back home– and are the most performing part of the official economy without bells and whistles.
The country’s official economy slice (34pct to 37pct) out of the total economy pie (considered nearly $1tr) therefore grew by additional $1.3bn without signing over dotted lines.
Experts believe remittances have already overtaken FDI as the biggest source of external financing. True. Therefore, institutionalizing OPs financial capability and capacity, incentivizing the process, and taking affirmative actions as public policy, could do wonders.
Imagine, our expats added $1.3bn more to the country’s official economy in a business as usual way, and keep adding with utmost predictability– key ingredient for fiscal and management control. And, without asking for proportionate number of seats in the Senate or in the Lower House (they constitute the largest politically marginalized constituency).
The OPs also hold over $580m equity in the Overseas Pakistanis Foundation (OPF). The huge outfit could run as profit center (in business terms) sans real estate (property black hole), with revenue and profit/loss booked in Dollars, not Pak Rupee.
A 10-year based Vision 2030 for OPS could draw multiparty cooperation and bonhomie. The expats are all Pakistanis abroad (I consider them the country’s higher middle class) and continue to add value. Honor them automatically with a (non-resident) tax-payer certificate. It could be our ThinkPad or IBM’s Watson.
The writer, an overseas Pakistani, is a business consultant and analyst presently based in Islamabad. He’s also the Editor-in-Chief of despardes.com and pkonweb.com.