PAKISTAN: Are we squandering home remittances?

By Sultan Ahmad

ARE we squandering the increasing home remittances of overseas Pakistanis which will exceed $5 billion in the financial year ending June 30.This issue has arisen as in the first 10 months of this financial year total remittances of $4.450 billion have been received, while large trade deficits and balance of payments deficits plague the economy. The average monthly remittance stands at $445 million.This issue has also become relevant to the decision to raise foreign exchange reserve of the country to $15 billion. Building that reserve is easy while it is nearly $13.8 billion. In fact this target could have been achieved last June when the reserve stood at $14.59 billion, but it declined due rising trade and current deficits.Now when a reserve of $15 billion is being sought, the deficit in balance of trade for the first 10 months of the year is $11 billion, while the current account deficit for the first nine months is $4 billion after absorbing home remittances and the foreign investment of $6 billion. [Read more]