banking by non-resident Pakistanis
free zones established in the manufacturing sector, banking free zones
offer great opportunities to attract investment if allowed
By AMANULLAH BASHAR
Oct 09 - 15, 2000
A group of non-resident Pakistanis, by consolidating
their resources, are in the process to initiate off-shore banking with
the prime objective to financially help out Pakistan.
Since off-shore banking registeration is allowed in
Luxemburg, Bahamas, Isles of Man and Nuie (a Central Pacific Island
under the domain of Australia) the proposed off-shore banking is likely
to be registered in one of the four places mentioned above.
This was disclosed by S.M.Inam, the founder Chairman
of SAARC Chamber of Commerce and Industry while talking to PAGE.
He said that Pakistani have a special knack in banking which has been
acknowledged all over the world. Quoting a senior Indian banker, Inam
said that Indians while commenting on the banking skill of Pakistan
generally say that they feel no threat from manufacturing sector of
Pakistan. What they scare is the banking sector of Pakistan, Inam said.
Speaking as the spokesman of that group of
non-resident Pakistanis, Inam feels that within developing world
especially in South Asia the banking laws are so harsh that it was not
possible for them to go through from this part of the world. He said
that like free zones established in the manufacturing sector, banking
free zones offer great opportunities to attract investment if allowed to
be established in off-shore areas like Gwadar, Ormara, Pasni, Jiwani ,
Gaddani or Manora. Bahamas is the best example of rapid economic growth
through off-shore banking, he cited the example.
The idea of consolidating resources of non-resident
Pakistanis was taken from Chinese and Malaysians working on the same
pattern, he said.
He said that mobilization of income generating and
development oriented activities could not be materialized in the
developing countries mainly due to depressed financial situation. The
difficulties in the way of mobilizing financial resources at domestic
level faced by all developing countries due to the poor financial
structure inherited from the past. Setting up of the national priorities
also did not permit to mobilize on income generating and development
The internal balance of trade deficit contributed to
the lack of access to the capital markets abroad. The financing and even
the current account deficit through external resources have impeded the
economic growth still further. The continued dependence on foreign
assistance is forcing to look for further avenues of foreign loans,
which are mostly of tied nature, increase the dependence of developing
countries on imports from the donor countries. The developing countries
otherwise agree to the conditionalities of the donor agencies or
developed world on one hand, and set apart a sizeable portion of the
national incomes for loan repayments on the other hand.
The low rate of domestic saving and uncertainty about
the exact amount of foreign remittances by the expatriates has also
contributed significantly to the lack of generation of resources at
The net result of all these developments has
crystallized in the shape of lack of investable funds to undertake
project of economic developments. The dependence on foreign resources
and absence of sufficient foreign exchange has further impeded the
growth of trade, despite the availability of many of the commodities at
competitive for offering to world market.
It is realized easily that under the present global
order the developed countries, including the institutions like the IMF,
the IBRD and other international agencies control the financial and
The rapidly changing scenario of international
development has complicated the position, since the emerging world order
gives a preference to divert the investable funds and the foreign
private investments to these emerging economies in a gigantic way, thus
diverting even these resources from the developing countries.
The emergence of strong economic blocks especially in
the developed world have decidedly inward looking, protectionism
policies especially in matters of trade and foreign investment. This has
been further complicated by signing of the World Trade Organization (WTO)
forcing the developing countries themselves. The bulk of the imports of
the developed countries in the shape of quotas and other preferential
treatments from the developing countries will gradually be wound up.
All these developments have led the developing
countries to realize the imperative of finding a solution to these
problems through developing their own resources. The development of
these resources aimed at overcoming the financial constraints by
mobilizing own resources as far as possible and trying to meet the trade
requirements both for exports and imports from within the region through
arrangements which do away with the requirements of scarce foreign
exchange. One of the important instruments which could enable South
Asian Countries to meet their development pre-requisites would be to
establish a South Asian Development Bank on the pattern of other foreign
investment development banks and possibly with the institutional and
financial assistance of some foreign banks and financial agencies as
well as mobilizing the resources of South Asians working abroad.