By Mushfiq Ahmad
KARACHI: State Bank of Pakistan proudly announced on Friday that Pakistan received the highest-ever amount of over $7.811 billion as workers’ remittances in 2008-09, beating the previous record of $6.451 billion of 2007-08.
Remittances have been rising for past several years, but this year’s increase has rung alarm bells in the country. People have expressed fears that Pakistanis working abroad might return home in large numbers owing to the recessionary conditions in developed countries, particularly the US. Also, people who had been working in UAE’s construction industry are coming back owing to the slump experienced by the real estate sector there.
In this scenario, flow of money from abroad is likely to go down this year, which will be a difficult situation for the government in Pakistan to manage. Successive governments have relied heavily on remittances to meet trade and current account deficits during the last seven years.
The money sent by overseas Pakistanis used to be invested either in real estate or in some business, which would boost country’s gross domestic product. Now the economy of the country will also lose this investment. The return of overseas Pakistanis will be a huge setback to the country’s economy also because the large number of people coming back home will look for jobs and put immense pressure on a job market where already there are hundreds of candidates for every new job opening. The jobless rate will rise sharply and could lead to social unrest.
In FY09, workers’ remittances showed an increase of 21.08 percent, or $1.36 billion, when compared with FY08. The monthly average remittances during the year stood at $650.95 million as compared with $537.60 million in 2007-08.
The inflow of remittances from USA, UAE, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1.735 billion, $1.688 billion, $1.559 billion, $1.202 billion, $605.69 million and $247.66 million, respectively, compared with $1.762 billion, $1.090 billion, $1.251 billion, $983.39 million, $458.87 million and $176.64 million.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during FY09 amounted to $771.03 million as against $726.29 million in FY08.
In June 2009, Pakistani workers remitted an amount of $735.17 million, up $187.76 million or 34.30 percent when compared with $547.41 million sent home in June 2008. The amount remitted in June 2009 is the second-highest received in one month, following $739.43 million sent home in March 2009.
The inflow of remittances into Pakistan from most of the countries of the world increased last month as compared to June 2008. According to the break up, remittances from UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries stood $164.70 million, $154.39 million, $152.33 million, $108.11 million, $68.48 million and $22.95 million, respectively, compared with $88.29 million, $143.57 million, $123.67 million, $90.98 million, $38.08 million and $13.98 million in the same month of last year. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during June 2009 stood at $64.19 million compared with $48.80 million during June 2008. The amount of $7.811 billion includes $0.48 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).