NSS INITIATIVE OF ON-LINE INVESTMENT TO ENHANCE EXTERNAL FLOWS
REMITTANCES POISED TO CROSS $12BN MARK IN FY11
Dec 13 - 19, 2010
Home remittances by overseas Pakistani workers are well poised to cross $12 billion mark this year and the facility of on-line investment by overseas Pakistanis in the National Savings is certain to augment external flows of foreign exchange in the country.
Zafar M. Shaikh, Director General National Savings has said that a state-of-the-art website is being launched to facilitate overseas Pakistanis for on-line investment into national savings from all corners of the world. This initiative, Zafar said, would certainly attract overseas Pakistani workers to directly invest their savings in Pakistan, which would certainly speed up the external flows of funds into Pakistan.
When his attention was drawn towards what people said heavy withdrawals to the tune over Rs60 billion from the national savings, Zafar with a broad smile on his face remarked that one should keep in minds that it is not a one way traffic; why one should look at withdrawals alone why not have a look at the stream of deposits as well.
He added that national savings has a portfolio of over Rs1700 billion and has the credit to achieve a growth of 70 percent during last three years. If there were withdrawals then there were also deposits to over Rs71 billion currently being managed by NSS. So, withdrawal and deposits are part of the game. We cannot deny the right of withdrawals to the investors. The business of deposits alone sounds extremely funny, he laughed.
It was the NSS, which helped reducing the heavy bank borrowings by the government on one hand and contained inflation on the other hand as a major liquidity source for the government. Regarding inflationary pressures he was of the view that containing inflation through increase in interest rate alone may not be effective or result oriented. He also quoted a US banker that the major concern is stagnant economic growth and not the rising inflation. Economic activity can only be sparked through low cost of financing alone, he remarked.
Meanwhile, the remittances sent home by overseas Pakistanis continued to show a rising trend as an amount of $4,428.30 million was received in the first five months i.e. July-November of the current fiscal year 2010-11, showing an increase of $595.72 million or 15.54 percent over the same period of the last fiscal year.
In November 2010, an amount of $926.89 million was sent home by overseas Pakistanis, up 24.78 percent or $184.10 million, when compared with $742.79 million received in the same month last year. This is the second highest amount remitted by overseas Pakistan in a single month. In August 2010, an historic amount of $933.06 million was received as workers' remittances.
The inflow of remittances in the July-November, 2010 from UAE, Saudi Arabia, USA, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,045.32 million, $935.76 million, $841.32 million, $530.30 million, $496.09 million and $147.57 million respectively as compared to $854.24 million, $708.35 million, $797.18 million, $544.88 million, $408.49 million, and $123.90 million respectively in the July-November, 2009 period.
Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first five months of the current fiscal year amounted to $431.93 million as against $394.61 million in the same period last year.
The monthly average remittances for the July-November, 2010 comes out to $885.66 million as compared to $766.52 million during the same period of the last fiscal year, registering an increase of 15.54 percent.
During November 2010, remittances from UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $225.75 million, $175.05 million, $171.45 million, $113.39 million, $102.85 million and $30.50 million respectively as compared to $175.01 million, $144.12 million, $134.75 million, $109.65 million, $92.67 million and $21.68 million in November 2009. Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during November, 2010 amounted to $107.90 million compared with $64.85 million in the same month last year.
It may be pointed out that the State Bank, Ministry of Finance, and Ministry of Overseas Pakistanis undertook a joint initiative called 'Pakistan Remittance Initiative (PRI)' with a view to facilitating the flow of remittances through formal channels. This initiative has started to materialize and remittances through formal channels are showing considerable growth. It may also be mentioned here that Pakistan has been reported as a top nation, which has shown the highest growth in the world in remittances despite recent global financial crisis. (AB)