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Hectic efforts by PRI helped to attract higher remittances

Hectic efforts by PRI helped to attract higher remittances

ISLAMABAD: Increased efforts by the Pakistan Remittance Initiative (PRI) helped to attract higher remittances from the Pakistani diaspora through Enhancing outreach, Reimbursement of T.T. Charges Scheme (Free-send Model) and Improvements in Payment System Infrastructure etc.The reimbursement of T.T. Charges Scheme is revised on March 2020 accordingly.

During Jul-Feb FY2020, remittances reached to $ 15126.5 mn ($ 14355.8 mn last year), with a growth of 5.4%.

On Y-o-Y basis, remittances witnessed a growth of 15.3 % in February 2020, recorded $1824.3 mn ($ 1581.7mn last year).

Share of remittances from Saudi Arabia 23 % ($ 3473.4 mn), U.A.E 20.7% ($ 3131.8 mn), USA 16.9 % ($ 2558.3 mn), U.K 15.2 % ($ 2305.6 mn), other GCC countries 9.6 % ($ 1453.5 mn), Malaysia 6.7 % ($ 1041.4 mn), EU 2.9 % ($ 431.1 mn) and other countries 4.8 %.

The amount of Home Remittance transaction between USD 100/- and  USD 200/- (or equivalent in other currencies) to be reimbursed increased from SAR 10/ to SAR 20/-

The (SBP) has raised the payment limits for information technology (IT) related freelance services from US$ 5,000 to US$ 25,000 per individual per month to enhance business-to-customer transactions through home remittance channel. The enhancement in limit will facilitate freelancers to increase home remittances through formal banking channels in the country.

In order to further encourage promotion of home remittances through formal channels, the Government of Pakistan has relaunched the performance based scheme effective from January 01, 2020 in which, Rs. 1 per each incremental USD mobilized over 15% growth in remittances in calendar year 2020 compared with the levels achieved in calendar year 2019.

The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above-mentioned initiatives.

Visa fee reduction from the Kingdom of Saudi Arabia is likely to boost up the inflows.

Export of manpower has been increased to 491,854 during Jul-Feb,FY2020

(284,047 last year), additional workers of 207,807 (73%), the major recipient are Saudi Arabia, U.A.E and Oman.

Present government has improved its diplomatic relations with Gulf States which helped to restore the confidence of foreign employers on Pakistani workforce.

Outlook: Remittances during July-February FY2020 reached to $ 15.1 bn. Due to this increasing trend in remittances, the remittances will exceed $ 22.0 bn at the end of FY2020.

Moreover, seasonal effect also play major role in boosting remittances. It is also expected that with the start of Ramadan and Eid, the flow of remittances will increase as workers generally send more money during festivals.

Recommendation: Trends in global labour markets be thoroughly analyzed to determine the demand pattern of skill and then prospective emigrants should be trained for proficiency in such trades/ professions.

Ministry of Overseas Pakistanis and Human Resource Development Should co-ordinate with NAVTTC and TEVTAs to develop curriculum for capacity building of young labor and execute training course accordingly.

Diplomatic training institutes must properly train Labor Attachés’. A properly structured generic training module for them needs to be developed. It should include cultural practices and norms, administrative set up, labour laws, and basic language skills.

Ministry of Overseas Pakistani and Human Resource Development should issue license to emigrant’s promoter and every promoter should meet the specified criteria/targets during the given period. Carrot & stick policy should be adopted according to which promoter must be given incentives on excellent performance and punish on non-compliance that could be cancellation of license.