Islamabad Chamber of Commerce & Industry has called upon the government to focus on promoting remittances to improve the struggling economy and enhance foreign exchange reserves.

 

Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce & Industry said that promoting remittances would produce multiple benefits for the country as it would increase the economic growth, reduce poverty & credit constraints, accelerate investment and enhance human development through financing better education and health facilities.

 

He said Pakistan faces constant problems of balance of payment while trade deficit has increased by 45 percent in the first quarter of this fiscal year. In these circumstances, encouraging remittances would help in reducing current account and fiscal deficits as well as external debt burden of the country. 

 

He said according to a World Bank study, remittances have contributed 5.48 percent of Pakistan’s GDP and their increased inflows would facilitate economic development both directly and indirectly. He said more inflows of remittances would also facilitate the growth of small businesses which play a crucial role in promoting the large scale industries.

 

He said many developing countries were achieving significant economic progress by encouraging remittances as India was receiving nearly $ 71 billion a year in remittances while their inflows to Nepal, Tajikistan and others count as much as 42 percent and 29 percent of their entire GDP.  He said Pakistan received around $ 17 billion in remittances last year, however, it has lot more potential to improve this figure by promoting the export of its huge labor force. 

 

Muzzamil Sabri said that in the scenario of low tax-to-GDP ratio, focus on increasing remittances would provide useful relief to the government as it would help in fostering country’s development, lessening reliance on foreign borrowing and managing economic shocks easily. Therefore, he stressed that government should take necessary policy measures to promote labor export in order to enhance the volume of remittances which could become an important source of economic rejuvenation of the country.