Pakistan Remittances Rising Amid Falling Oil Prices

Pakistani diaspora sent home $19.3 billion in remittances in 2015, representing 12.8 % increase over 2014, according to a World Bank Report titled "Migration and Development Brief" released today.

Pakistan's $19.3 billion in remittance make up 6.9% of 2014 GDP, essentially closing the rising trade deficit amid the nation's falling exports.

The 12.8% increase over 2015 is substantial but it is down from 16.7% jump seen in 2014 over 2013. The report attributes the slower remittance growth from Gulf Cooperation Council (GCC) countries like Saudi Arabia and United Arab Emirates to falling oil prices.

This report comes soon after the Panama Leaks that show how Pakistan's corrupt elite, including Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat.

Overseas Remittances in South Asia Source: World Bank 

In Q4 of 2015, year-on-year growth of remittances to Pakistan from Saudi Arabia and the UAE were 11.7 percent and 11.6 percent, respectively, a significant deceleration from 17.5 percent and 42.0 percent in the first quarter, said the report.

Global remittances, which include those to high-income countries, contracted by 1.7% to $581.6 billion in 2015, from $592 billion in 2014, the World Bank said.

India was the top recipient with $68.9 billion in remittances in 2015, a decline from $70 billion in 2014. This marks the first decline in remittances since 2009,  according to the report.

The growth of remittances in 2015 slowed from 8% in 2014 to 2.5% for Bangladesh, from 16.7% to 12.8% for Pakistan, and from 9.6% to 0.5% for Sri Lanka. “Slower growth may reflect the impact of falling oil prices on remittances from GCC countries,” the report said.

The only country in South Asia to see dramatic growth in remittances was Nepal. The overseas Nepalese workers sent home $7 billion in 2015, an increase of 20.9 percent in 2015 versus 3.2 percent growth in 2014. After the devastating earthquake that hit the Himalayan nation, many Nepalese migrant workers returned home to take care of their families, as the average number of returns at the airport jumped five times to around 4,000 per day.

“Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries,” said Augusto Lopez-Claros, director of the World Bank’s Global Indicators Group.

“However, if remittances continue to slow, and dramatically as in the case of Central Asian countries, poor families in many parts of the world would face serious challenges including nutrition, access to health care and education,” Lopez-Claros said.

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Comment by Riaz Haq on April 16, 2016 at 5:08pm

#Pakistan service economy shows strong growth in 1H FY16: SBP. #Transport, #Telecom, #Finance, #Government sectors

"While it is too early to make a robust assessment of services sector performance for the full year, most of the indicators suggestive a positive trend," said the SBP report.

Production and sales of commercial vehicles has registered a phenomenal growth during first half of the current fiscal year, on the back of the Apna Rozgar scheme launched by the Punjab government, and up tick in overall commercial activity in the country.

According to the report, the transport sector performance included a sharp increase in petrol sale, an increase in cargo handling at domestic ports and most importantly a drastic containment of losses borne by Pakistan Railways and Pakistan International Airlines.

Low oil prices and stable exchange rate have indeed played an important role in improving financial health of these public sector entities. Pakistan Railways has also gained from growing volumes of both freight as well as passenger transport.

In case of telecommunication sector, the report added, the role of increased usage of 3G/4G broadband services all across the country has been dominating, adding that the financial health of most telecom firms has improved, benefiting primarily from data revenues.

According to the report, cellular firms have also partnered with leading commercial banks in the country to support the penetration of Internet banking services. These firms also are actively participating in money transfer services all across the country. The reports said that the telecom sector is now playing a dominant role in modernising the country's payment system infrastructure, and is also contributing to the wider objective of enhancing financial including in the country for marginalised or unbanked segments of the society.

PTCL, the market leader, has continued to incur losses during first half, however, it has been able to reduce its losses compared to the same period of last year.

The financial and insurance sub-sector had recorded 6.1 percent growth during FY15, which was mainly driven by exceptional increase in profitability of commercial banks. These profits further increased during the first half of current fiscal year, however, its space remains significantly lower than the last year. The general government services had registered 9.5 percent growth against the annual target of 4.3 percent of FY15. This year, the sub-sector also is expected to end up registering a modest growth.

The wholesale and retail trade is likely to benefit from higher large manufacturing growth in first help compared to the same period of last year. The continuous increase in imports (especially non-oil) and domestic demand is also likely to keep trading margins intact while expectations of a bumper wheat crop on the back of strong yields will also benefit the wholesale and retail sectors.

Comment by Riaz Haq on April 28, 2016 at 4:37pm

#Pakistan’s Economy- Need to Accelerate #GDP Growth, Continue Structural Reforms, Increase #Exports via @WorldBank

Pakistan continues its modest growth recovery. Growth rate in 2017 is expected to rise to 4.8 percent the World Bank says. 

Releasing its twice-a-year Pakistan Development Update, the World Bank applauds the government for restoring economic stability but noted that much of the country’s economic growth was underpinned by external influences such as low oil prices and strong remittances while private and public investments continue to remain low.

“Pakistan has made great progress in restoring macroeconomic stability but much more needs to be done to put Pakistan on a solid, economic growth footing,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “Persistent, steady progress on the structural reform agenda will be necessary if Pakistan is to accelerate its growth recovery and lift millions more out of poverty.”

The latest Pakistan Development Update sets out recent developments across the economy and identifies risks and next steps facing Pakistan’s near-term future before focusing in on a handful of key development challenges.

The report highlights that the pace of Pakistan’s economic growth will accelerate modestly through to 2019. However, significant risks remain and the country should guard against global slowdown by continuing to make key reforms, including expanding the electricity supply, boosting tax revenues, strengthening the business environment and encouraging private sector to invest. 

The report identifies services and large-scale manufacturing as the key supply-side drivers of growth. Services are expected to grow over 5 percent in FY2016 while large-scale manufacturing, benefitting from low global commodity prices, is expected to grow between 4 and 4.5 percent. On the demand side, consumption is driving growth, fueled by rising remittances and a loose monetary stance.

The report is optimistic about recent progress in fiscal consolidation, highlighting a 20 percent growth in the revenues of Federal Board of Revenue for the first eight months of FY16. “Fiscal consolidation is one of the most significant reform challenges facing Pakistan today”, said Enrique Blanco Armas, World Bank Lead Economist for Pakistan. “The federal government has kept a tight rein on recurrent expenditure, while continuing to invest in Public Sector Development Program expenditure, a very positive development.”

Workers’ remittances and lower oil prices contributed most to the accumulation in foreign reserves, according to the report. Remittances of $9.7 billion in the first half of FY16 more than compensated for the trade deficit, and oil prices delivered a 9.1 percent fall in the import bill.

The strong balance of payments headline figures, however, mask the structural weaknesses in Pakistan’s export competitiveness. Exports fell by 11.1 percent in the first half of FY16 as a result of softer global demand and domestic bottlenecks. Port charges in Karachi, for example, are nine times higher than those in Dubai and Singapore. Shipping container dwelling times are three times longer than in East Asia. Exporters who want to participate in global supply chains are hamstrung by these constraints.

Comment by Riaz Haq on April 28, 2016 at 10:14pm

#Pakistan #agriculture component of #GDP to be flat this fiscal year 2015-16 due to #drought, crop losses

Pakistans neglected agriculture sector is all set to face a major blow as the farm sector growth is expected to touch zero in the current fiscal year mainly because of negative growth in major crops including cotton, rice and sugarcane as well as dwindling commodity prices in international market, a senior economist said on Tuesday.

The agriculture growth might touch zero in the current fiscal year mainly because of negative growth of major crops like cotton, rice and sugarcane and poor performance of minor crops, said Dr Hafeez A Pasha, former finance minister, when contacted for his comments. The livestock might not be able to compensate overall farm growth up to the desired mark during the outgoing financial year.

Dr Pasha said whenever the countrys agriculture sector witnessed a dip; its overall gross domestic product (GDP) growth rate never crossed 4 percent in any year mainly because the countrys overall economy was largely dependent upon agriculture in terms of trade, commerce and agri-based exports.

Sources, however, said in the wake of expected flat growth of agriculture sector, which will remain in the range of just 0.3 to 0.5 percent, Pakistans prospects for achieving overall GDP growth rate have also plunged into danger zone as the growth rate will be hovering around 4.5 to 4.7 percent maximum for outgoing fiscal year against desired envisaged target of 5.5 percent in 2015-16.

When contacted a top official of the Pakistan Bureau of Statistics (PBS), he said the National Accounts Committee (NAC) was expected to meet by mid of next month. The PBS is not responsible to collect primary agriculture data as NACs agriculture committee will provide data to the PBS on the basis of which the farm sector growth will be estimated on provisional basis.

As the PBS did not see the data so far so it would be premature to give any judgment on this issue, the official said. But he added that the wheat crop might produce positive results mainly because of its output achieved in Barani areas of the country.

Many independent economists believe that the countrys agriculture sector might witness a negative growth in the current fiscal year but some economic managers claimed that the farm growth might slide into positive side by demonstrating nominal growth just around 0.5 percent. However it would be definitely missed out the fixed target of 3.9 percent for the current financial year.

For finalizing the Budget Strategy Paper (BSP) for next three years, Finance Ministry refused to bring down its envisaged GDP growth rate target of 5.5 percent for the current fiscal year despite insistence of Planning Commission to cut it to around 5 percent.

Ministry of Finance still appeared confident that the manufacturing and services sector could play major role to jack up overall GDP growth rate over 5 percent as they claimed that the sale of cement is increasing.

Overall, the agriculture sector grew by 2.9 percent in last fiscal year of 2014-15, which was lower than the envisaged target growth of 3.3 percent but higher than the growth of 2.7 per cent achieved during the fiscal year 2013-14.

The agriculture sector is targeted to grow by 3.9 percent this year on the basis of expected contributions of important crops (3.2 percent), other crops (4.5 percent), cotton (5 percent), livestock (4.1 percent), fishing (three percent) and forestry (four percent). 2016 Global Data Point.

Comment by Riaz Haq on May 6, 2016 at 9:46pm

Nearly a million workers left #Pakistan for overseas jobs in 2015

Around a million Pakistanis left the country for better work opportunities in 2015 alone, a Senate panel was told on Thursday.

Senate Committee on Overseas Pakistanis and Human Resource Development was informed on Thursday that since 1971, over 9 million Pakistanis have emigrated through the Bureau of Emigration and Overseas Employment.

Fewer jobs for Pakistanis in Middle East

This number peaked in 2015 when 946,571Pakistanis moved to other countries. Since 2013, over 2.32m Pakistanis have left the country for work. Among these six per cent proceeded to Gulf Cooperation Council countries, about one per cent moved to the European Union and other developed countries, three per cent to Malaysia, Libya, South Korea etc.

Giving details, Federal Secretary for Overseas Pakistanis and Human Resource Development Khizar Hayat Khan pointed out how Khyber-Pakhtunkhwa made up just 12 per cent of Pakistan’s entire population at home, but it comprises 26 per cent of Pakistanis working abroad.

Similarly, as many as 0.5 million people hailing from the Federally Administered Tribal Areas (Fata) are working abroad. He added that these people remit large sums of money home but facilities in their native areas does not reflect this.

Female participation in workforce makes sense – at all levels

He admitted that while there was a culture of corruption in the system, the only way to do away with it was to computerise the system of applications.

Senator Lt General (retd) Abdul Qayyum pointed towards the rampant corruption in recruiting protectors, calling for their background checks and rigorous training and grooming.

The panel called for setting up additional offices of Protectorates of Emigrants after Overseas Pakistanis Foundation Director General Rana Matloob informed them that there were just seven protectorate offices in the country.

Comment by Riaz Haq on May 15, 2016 at 8:50am

Pakistan’s economy has come a long way since it started a structural reforms programme three years ago, bringing back stability and discipline to the economy while restoring confidence in the financial system, State Bank of Pakistan (SBP) Governor Ashraf Wathra told Gulf News in an exclusive interview.

The overall inflation remained contained to less than 3 per cent during the period July to April in the current financial year as compared to 8.62 per cent in 2014 and 4.53 per cent in 2015. “Our year on year inflation for the current fiscal year ending in June will be 3 per cent. We believe that is a good number considering our original target of 6.5 per cent,” said Wathra.

The country’s foreign exchange reserves are close to $21 billion (Dh77 billion) as of May 9, 2016 of which SBP reserves stood at $16.125 billion and that of scheduled banks at $4.802 billion.

According to a recent World Bank report, workers’ remittances and lower oil prices contributed most to the accumulation in foreign reserves. Remittances of $9.7 billion in the first half of fiscal year 2016 more than compensated for the trade deficit, and oil prices delivered a 9.1 per cent fall in the import bill.

The current lending rate of commercial banks is at about 6 per cent, the lowest in 12 years, in a country where the businesses have borne the brunt of the rate even as high as 18 per cent. Analysts say, in the context of low inflation, the Independent Monetary Policy Committee that sets the interest rates has enough elbow room to keep the rates at the current low or event take it lower.

According to Wathra, the aggregate loan growth numbers of the banking sector are very encouraging at the current lending rates. “With a low inflation that is below our target and considering the fact that an emerging economy like Pakistan can accommodate a slightly higher inflation rate, the lending rates could remain low. But it is not inflation alone, rather the overall economic data that will be considered by the Monetary Policy Committee in making adjustments to the lending rates,” he said.

In the current and the previous quarters, the overall banking sector credit growth surged in excess of Rs300 billion (Dh10.5 billion) with most of that accounting for long term credit. “Clearly the private sector’s long term credit offtake is picking up momentum, indicating growing demand for industrial credit that leads to higher economic growth prospects,” said Wathra.

Pakistan’s Ministry of Finance expects the country’s GDP to grow in excess of 6 per cent in the next financial year, starting this July. While the country achieved 4.2 per cent growth in 2015, it is expected to be 5 per cent this year.

Comment by Riaz Haq on June 9, 2016 at 10:33pm

Global Migration? Actually, The World Is Staying Home

The refugee debate creates the impression of unprecedented mass migration. That image is completely incorrect. The real question, when we look at migration globally, is why there is so little of it.

Take a tape measure. Unroll the tape to about two meters (six feet) and place one end against a wall. The distance between you and the wall corresponds to the world population of about 7.3 billion people. The number of people worldwide who left their native countries in the last five years -- in other words, migrated -- takes up about one centimeter (three-eighths of an inch) of the tape measure. That number amounted to 36.5 million, or 0.5 percent of the world's population. All others, or 99.5 percent of the global population, are non-migrants, or people who were living in the same country in 2015 as in 2010. They represent the other 199 centimeters on the tape measure.

The basic problem, Abel explains, is that all migration figures come from the United Nations, which measures migration by combining the numbers of migrants and refugees from all countries. The UN defines migrants as "persons living in a country other than where they were born." The data are derived from individual countries' censuses and refugee registries.

In a recent press release, the UN announced the latest total number as follows: "The number of international migrants -- reached 244 million in 2015 for the world as a whole, an increase of 71 million, or 41 percent, compared to 2000."

244,000,000: What a huge number!

41 percent -- an increase of almost half!


First, let's take a look at the 41 percent increase. It relates to absolute numbers, which are not reasonable benchmarks here. In 2000, the UN counted 173 million migrants. That was 2.8 percent of the global population of 6.1 billion at the time. Since then, the world population has grown to 7.3 billion, so that the 244 million migrants in 2015 make up 3.3 percent of that total.

So why doesn't the UN communicate the information as follows: "Since the year 2000, the share of migrants in the world population grew by 0.5 percentage points?" Because it sounds less concerning?

Here's the situation. The UN doesn't receive enough money. Its World Food Program, for example, is radically underfunded, as are its aid campaigns for Syria. Coming from this position of need, the UN always turns up the volume when announcing its figures. Dependent as it is on money from its members to relieve its distress, the UN underpins its appeals with dramatic terms like "all-time high," "new maximum" and "record low." By doing so, it contributes significantly to the imbalance in the migration debate.

But the bigger problem lies in the number itself, 244 million. Why?

"The figure has several serious weaknesses," says Abel, and yet it is spread around the globe by hundreds of media organizations, press agencies, NGOs, politicians and even academics. Numbers like these, or their international equivalents, from which they are derived, serve as the basis for debates, studies and laws. Why? Because there is no more credible source than the UN. This widespread perception leads to phrases like these: "The world has 41 percent more migrants now than in 2000, UN reports" (Toronto Star). "UN: Number of global migrants soars to 244 million" (Newsweek). Or, conversely and especially distorting, on the website of Swiss television: "Fewer and fewer people are living in their native countries."

The number, 244 million, isn't incorrect. It just says very little about all the things you would want to know when you think about migration.

Comment by Riaz Haq on January 17, 2018 at 7:12pm

Saudi Arabia, Pakistan to boost ties in different fields
By M. Ishtiaq | Published — Wednesday 17 January 2018

ISLAMABAD: Pakistan and Saudi Arabia have agreed to enhance bilateral cooperation in a number of different fields.
The two sides signed and exchanged documents of protocol at the end of the two-day long 11th Saudi-Pakistan Joint Ministerial Commission (JMC) meeting in Islamabad on Wednesday.
In the closing session, Pakistan’s Minister of Commerce Pervaiz Malik invited Saudi Arabia to invest in renewable energy projects, and in the agriculture, oil exploration and livestock sectors.
“The launching of Vision 2030 in the Kingdom will surely usher in the creation of hundreds of thousands of new jobs in the construction and services sectors … I would like my Saudi brothers to increase the quota of jobs for Pakistani workers in those sectors,” said Malik.
He also suggested the Saudi government could establish a “Saudi-specific training sector” in Pakistan to teach the particular skills needed for the Saudi job market.
The head of Saudi Arabia’s delegation, Majid Al-Qassabi, minister for commerce and investment, said the Kingdom was keen to enhance strategic relations with “our brotherly country Pakistan.”
The Saudi minister admitted that the current volume of trade between the two countries is only “moderate.”
“We need to enhance communication, we need to identify opportunities,” he said. “We need to promote investment opportunities, from both ends. We need to clear all the obstructions, all the challenges, that (inhibit) the ease of doing business.”
The 34-member Saudi delegation included participants from 20 different government entities, the chamber of commerce, and the private sector.
“We are really keen to identify opportunities, we really need to work to establish a long strategic relationship,” Al-Qassabi said.
The minister also announced that Riyadh will host the Saudi-Pakistan Business Forum in the second half of this year. “Hopefully that will be the launching pad for new business and investment relations between the two countries,” he said.


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