Pakistani expats send $11.38 billion home in first seven months of fiscal year

Pakistan depends greatly on workers’ remittances from Saudi Arabia and other Middle Eastern countries, particularly in the GCC. (REUTERS)
Updated 13 February 2018
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Pakistani expats send $11.38 billion home in first seven months of fiscal year

KARACHI: Pakistanis working overseas have sent $11.383 billion to their homeland in the first 7 months — July to January — of the current fiscal year (FY18), the State Bank of Pakistan said in a statement on Tuesday.
That remittance has grown 3.55 percent compared to the amount remitted during the same period in the preceding fiscal year, and the statement suggested that the total remittance sent home by overseas workers in FY18 could reach $20 billion. The target set for FY18, however, was $20.7 billion.
In January 2018, the inflow of workers’ remittances amounted to $1.639 billion, which is 4.92 percent lower than December 2017, but 10.10 percent higher than January 2017.
“The economic conditions of the Middle East and localization of labor in some countries have largely affected the inflow of workers’ remittances,” Muzzamil Aslam, senior economist and CEO of EFG-Hermes Pakistan, told Arab News.
Pakistan depends greatly on workers’ remittances from Saudi Arabia and other Middle Eastern countries, particularly in the GCC.
According to the bank, remittances sent by workers from Saudi Arabia in FY18 amount to $2.91 billion compared to $3.16 billion in FY17. However, the amount from the UAE has marginally increased from $2.4 billion to $2.5 billion.
The bank’s statement explained that lower remittances from the GCC were “offset by an improvement in remittances from non-GCC corridors, particularly the US and UK.”
Economists believe that the potential value of home remittance to Pakistan’s economy could be as high as $34 billion, but that, currently, the unofficial channels of Hundi and Hawala — using untraceable methods including IOUs and agents — account for almost 50 percent of incoming remittance.
“The government must come up with lucrative incentives to attract remittance through official channels,” Dr. Athar Ahmed, a senior economist, said, adding: “Pakistan may face pressure in the coming days, as its workforce in some countries is being reduced.”
Aslam believes that any bottleneck in remittance could exert serious pressure on the country’s balance of payment situation. Pakistan already faces a current-account deficit of $7.6 billion, which is 4.4 percent of its GDP.


Iraq parliament approves 2019 budget, one of largest ever

Updated 24 January 2019
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Iraq parliament approves 2019 budget, one of largest ever

  • The budget will be largely funded by oil revenues
  • The 2019 budget is almost 45 percent higher than last year’s budget

BAGHDAD: Iraqi lawmakers on Thursday approved the government’s 2019 budget, which at $111.8 billion is one of the oil-rich country’s largest ever spending bills.
It represents a nearly 45 percent increase from last year and awards even more money for public salaries, including those of the northern Kurdish region.
Nearly 90 percent of the budget comes from oil revenues.
Iraq expects to export 3.9 million barrels per day in 2019, including 250,000 bpd from the Kurdish region, at an average of $56 per barrel.
The current price of crude sits at $63 per barrel.
The deficit is expected to more than double to $23.1 billion, while investments increase to $27.8 billion.
The draft bill was originally submitted to parliament in October but has been fiercely debated since then.
MPs from provinces ravaged by the fight against the Daesh group criticized it for not allocating enough reconstruction funds to their regions.
Another debate raged over the share that would be allotted to the administratively autonomous Kurdish region.
MPs had originally scheduled a session for 1:00 p.m. on Wednesday but delayed it to 7:00 p.m. and voted article by article, finishing just after midnight.
The government proposed $52 billion in salaries, pensions, and social security for state workers — a 15-percent jump from 2018 and more than half the total budget.
Notably, parliament passed a budget measure to fund salaries for the Kurdistan region’s state workers and armed forces, the peshmerga.
The budget also stipulates the Kurdish Regional Government must export 250,000 bpd of crude through state-owned companies and deposit the revenues in federal coffers.
If it didn’t, MP Sarkawt Shamsaddin told AFP, Baghdad would continue to pay salaries but would not disburse other funds to the Kurdish region.
“The good thing is public servants’ salaries and peshmerga are not subject to political disputes,” said Shamsaddin, representing the northeastern Kurdish city of Sulaymaniyah.
Relations between Baghdad and Irbil, the capital of the Kurdish region, soured in 2017 after Kurdish authorities held an independence referendum.
Last year’s budget was approved by parliament in March.
Parliament had also scheduled a vote on two of the five remaining empty cabinet posts in Prime Minister Adel Abdel Mahdi’s government but adjourned without holding it.