KARACHI: Remittances sent home by overseas Pakistanis jumped 19 per cent year-on-year in April 2009 as the worst prediction of the government officials started to come true with more expats coming back clutching on to their belongings after losing jobs abroad.
Last month remittances increased to $697.52 million as compared to $590.7 million received in the same month of 2008, reflecting what employment agencies call transfer of capital mostly from the Middle East.
“Labourers in cities like Dubai, which has been hit by a property slump, are coming back in large numbers,” says Zohair Ashir, CEO of Access Consulting. “That is what seems to be adding up to higher remittances.”
The figures released by State Bank of Pakistan (SBP) on Monday showed that total remittances in the past 10 months to April jumped 19 per cent to $6.35 billion. The remittances from UAE have gone up by 50 per cent year-on-year to $1.36 billion.
A record 23 per cent jump in remittances in March rang alarm bells in the government circles with Federal Minister for Overseas Pakistanis, Dr Farooq Sattar, fearing a tsunami of homeless expats heading back.
SBP has already cautioned the government against too much reliance on remittances to meet the current account deficit, citing the global economic slowdown that has caused tremendous job losses.
According to a 2004 report of the ministry of overseas Pakistanis, the number of expatriates is 4 million but Sattar said that has crossed well over 5 million now. While there are no figures available to ascertain the origin or the exact number of expatriates coming home, the recruiting consulting agencies say the flight could be from places beyond UAE.
Ashir of Access Consulting said stringent working permits in UAE and other Middle East states don’t allow workers to hang on for long. “Once your visa is taken away, there is no other option but to head home with all the belongings.”
But, he cautioned, there could even be an exodus from among the Pakistanis based in US. “Compared to six months ago, I have seen substantial increase is CVs sent by those seeking jobs in Pakistan.”
The sudden jump in remittances has coincided with a national crackdown on illegal money transfer networks called Hundi and Hawala. Some officials say the increase in remittances is in part reflection of more expats using the legal channel to send money to their families.
During July-April 2008-09, the highest amount of $1.4 billion was received from the US, the global powerhouse where hundreds of thousands of people have been sacked in past few months. Pakistan subscribed to a $7.6 billion IMF loan late last year to avert a balance of payment crisis, which was caused by a huge trade deficit and falling foreign inflows. The News