ICCI for channeling remittances to investment

  • April 10, 2010
Pakistan has witnessed an impressive growth of more than 17 percent in remittances which have reached to about US$ 5.79 billion during July-Feb: 2010 and government should take measures to channelize these remittances towards the long-term investment for achieving better results for the country.

This was said by Zahid Maqbool, President, Islamabad Chamber of Commerce & Industry in a statement. He said channeling the flow of remittances towards investment sector will contribute towards sustained growth of the economy.

He said SME sector is the engine of growth for Pakistan and one good option for government is to motivate the returning  migrants to set up small and medium size businesses, which will help in boosting SME sector. For this purpose, government should provide them fiscal incentives like tax breaks and other concessions.

He called upon the bankers to become more proactive and increase the speed of remittance transactions so that overseas Pakistanis could feel encouraged to send their money through official banking channels.

He said such an approach will help develop the financial sector of the economy and contribute to the stability of macroeconomic fundamentals of the country and Pakistan will be able to cope with balance of payments problems. He said another choice to motive remittances through banking channels is to offer a special exchange rate to the remitters.

Zahid Maqbool said that tax structure related to remittances should also provide some incentives to expatriates so that they find incentive in sending more money through the formal channels. 

He said Pakistan experienced a sharp fall in the net inflow of foreign investments during July-Feb FY2010 because inflow in the first eight months of the current fiscal year fell to $1.024 billion as compared with $1.89 billion in the corresponding period of FY-09.

He said promotion of remittances through official routes and channeling these to long-term investments could sufficiently compensate Pakistan for big decline in FDI.