Shoring up home base

It is remarkable how big an impact small service industries can have on an economy. Technology that enables us to swiftly send money across the world has made a tremendous contribution to nations such as Pakistan, which is the fifth-largest recipient of remittances in the developing world. The State Bank recently revealed that in the fiscal year 2011-12 it received more than $11 billion (about Dh40.4 billion) in remittances from overseas Pakistanis. This amount represents 7 per cent of the nation’s overall GDP — a considerable proportion, compared to 4 per cent in India. More strikingly, it is not too far off from tax revenues in Pakistan, which account for only 10 per cent GDP.

In the first six months of 2012-13 cash inflows from remittances totalled $7.1 billion — a 12.5 per cent increase on the same period from the previous year.

The government has not been blind to this precious source of capital. The Pakistan Remittance Initiative (PRI) was set up recently by the State Bank in conjunction with the Ministry of Overseas Pakistanis and the Ministry of Finance. The initiative helps set up remittance centres to facilitate the sending of cash at lower rates. Pakistan’s National Database and Registration Authority similarly has launched a scheme called the National Cash Remittance Programme, which also enables easy remittance in conjunction with new smart national ID cards.

Considering the scale of the contribution being made by Pakistanis living abroad, there has been talk of allowing them a greater say in state organisations such as the Overseas Pakistanis Foundation (OPF). The OPF is a fund geared towards the welfare of migrants’ families in Pakistan and also to facilitate the return of migrants.