Interview with Mr Shamim A. Firpo – Chairman, Firpo Group of Companies
PAGE: Tell me something about yourself and your organization, please:
SHAMIM A. FIRPO: I started life’s struggle at a very young age. When I was six-year-old my father died and after his death my mother played a vital role in building my personality and future. My mother motivated and encouraged me in every walk of life. I am determined and optimist kind of a person and always believe in Allah Subhanahu Ta’alah that He always has good for everyone. As a person, I am very simple and result-oriented. I am also very much interested in social welfare work. In my whole life I worked hard and made my life as I dreamed. I am a self-made person and feel pleasure whenever I share my success story with students and young entrepreneurs in mentoring sessions while visiting universities and educational institutes to motivate them.
As I shared that, at a very young age I started my business journey. That was 1968 when I established my food business with the name of Firpo Restaurant at Tariq Road in Karachi. With the blessings of Allah Subhanahu Ta’ala and my mother’s prayers, my business got success and popularity. The name Firpo was so popular that it has become part of my name. I am proud to say that there may be thousands of Shamims but there is only one Firpo, so whenever the Firpo name is taken anywhere across Pakistan, people come to know that it is only Shamim A. Firpo. After getting success in food business, I diversified my business and started trading, import and export business with the name of Sohail Enterprises in 1975. I constantly worked with devotion, with the flow of time my sons joined me in business and Alhamdulillah our business has now converted into Firpo Group of Companies.
In 2018 we celebrated 50 Years Golden Jubilee of our business. If I talk about my business, we mainly deal in auto lamps and auto parts. We are well known amongst automobile industry in Pakistan. All the top auto manufacturing companies use our bulbs and parts in their vehicles. We are doing our business globally and have established offices in China, Sri Lanka, and Romania. Our working partners are China/Hong Kong, Taiwan, Vietnam, Thailand, Japan, USA, Germany, Hungry, UAE, Romania, Ukraine, Sri Lanka, Iran, Afghanistan.
Firpo is our registered brand name which is known as a name of Trust and a symbol of Quality in market.
I am also holding different public and private portfolios and also have interest in business politics and have served the business community of Karachi as President of Karachi Chamber of Commerce & Industry for the year 2016-17.
I am very much satisfied and happy with my life and thankful to Allah Subhanahu Ta’ala for giving me this respect and success.
PAGE: What are your views on the foreign remittances received by Pakistan amid the fear of COVID 19 pandemic?
SHAMIM A. FIRPO: As the COVID-19 pandemic risks devastating impact on economies around the world, including widespread unemployment and lower incomes so, the COVID-19 also impacted on remittances worldwide. Pakistan received $23 billion dollars through foreign remittances during fiscal year 2019-20.Pakistan’s central bank said that the workers’ remittances during the first nine months of the current fiscal year (9MFY20) amounted to $16.99 billion, implying a six percent increase when compared to $16.03 billion during the same months in the last fiscal year. A quick look at the data revealed that Saudi Arabia and the UAE retained their positions as top contributors to Pakistani remittances with $3.92 billion and $3.55 billion of inflows, respectively.
We can see, despite the coronavirus pandemic and the ensuing lockdowns across the world, Pakistani workers’ remittances in March 2020 increased by 3.8 percent to $1.9 billion when compared to the inflows in the previous month. However, the International Monetary Fund (IMF) has predicted greater loss of remittances for countries like Pakistan during this calendar year. Media reports also indicated that thousands of overseas countrymen have already lost jobs in the Middle East and are awaiting to return home. Given the impact of COVID-19 globally, this increase in workers remittance is encouraging. During the pandemic, the Hawala/Hundi system ceased to operate as illegal operators failed to settle their accounts in the past three to four months due to restrictions on movement through international travel. Neither currency smugglers arrived in the country nor did they depart since late April when Pakistan suspended international flight operations to contain the coronavirus pandemic.
PAGE: What must Pakistan do to enhance the amount received through remittances?
SHAMIM A. FIRPO: We all know that for decades, remittances from hundreds of thousands of expatriate workers mostly in the Gulf have proved a lifeline for Pakistan’s economy. I would like to share that almost ten years ago in order to provide for an ownership structure in Pakistan for remittance facilitation, State Bank of Pakistan, Ministry of Overseas Pakistanis and Ministry of Finance has launched a joint initiative called Pakistan Remittance Initiative (PRI). This initiative takes all necessary steps and actions to enhance the flow of remittances. The initiative has been taken to achieve the objective of: Facilitating, Supporting, Faster, Cheaper, Convenient & Efficient flow of remittance and to create investment opportunities in Pakistan for overseas Pakistanis.
In my opinion Pakistan can enhance the remittances flow if the number of migrants increased, remittance shift to official channel, and if the number of skilled workers increased abroad that earned high incomes and wages. I observed that Pakistani migration also played an important role in enormous increase of remittances.
The World Bank report projects decline in remittances to Pakistan due to economic crisis caused by the COVID-19 outbreak. The top 5 countries remitting money to Pakistan are also in deep recession causing a spike in unemployment amongst the overseas workers. In preparation to offset the shortfall in the amount of money sent back to the country by migrant workers, the government has proposed an incentive package for overseas Pakistanis. The incentive package includes tax exemptions and a special loyalty program. Pakistan’s regional and national administrations have also taken up measures to tackle the challenges imposed on the economy.
PAGE: Your views on the facilitation for remittances through official channels:
SHAMIM A. FIRPO: Pakistan is one of the world’s top ten remittance collecting countries. The importance of foreign remittances for Pakistan shows that after the manufactured goods export, remittances are the important component of foreign exchange in Pakistan. The present government is also trying to increase the level of home remittances through official channels to reduce the current account deficit of the country. In order to further facilitate overseas Pakistanis, the Prime Minister has now allowed the SBP and its authorized dealers (banks) to implement Business to Customer (B2C) and Customer to Business (C2B) transactions through foreign correspondent entities under their existing (home remittance) agency arrangements. For C2B transactions, direct payments from overseas Pakistanis can be received to pay for utility bills, education fees of Higher Education Commission’s accredited institutions, super stores, insurance companies, credit card payments, etc.
Remittances received by reputed real estate builders and housing societies from overseas Pakistani individuals on account of purchase of property such as residential and commercial houses, plots and flats are also allowed the facility except remittances for equity/participation in an enterprise.
The Prime Minister also accorded approval to incentive payment by the government on Mobile Wallet use to the tune of Rs.2 on each transaction of dollar 1 remittance that was previously Rs.1. Exchange companies and ADs who bring in 15 percent more remittances than the previous financial year will also have the incentive of PKR1 against each dollar 1. It may be noted that, however, that home remittances cannot exceed a certain limit, which may depend on the number and incomes of overseas Pakistanis, financial needs of their dependents back home, policies of the host countries, etc, even if proper incentives are provided to the expatriates. The Prime Minister has also directed the concerned ministries and departments to work out further incentives so as to attract remittances through legal channels.
The State Bank of Pakistan has an active agenda to continuously analyze global scenario related to remittances and take all necessary steps to remove barriers to the flow of remittances, and improve access to banking facilities to overseas Pakistanis and their families. In order to achieve these objectives, the State Bank, Ministry of Finance and Ministry of Overseas Pakistanis are jointly making efforts under Pakistan Remittance Initiative (PRI).
In my view, future steps should revolve around equalization of official and unofficial rates of Pak rupee vis-a-vis other currencies and increasing the speed and ease with which expatriates can send their remittances back home.
PAGE: How would you comment on remittances received by Pakistan vis-a-vis India, China, Philippines, Bangladesh etc.?
SHAMIM A. FIRPO: India, China, the Philippines, Pakistan, Bangladesh, and Vietnam are the largest remittance recipient’s countries in the world. The Asian Development Bank (ADB) has said in a new report that the coronavirus pandemic will hit remittances hard in Asia and the Pacific, and Pakistan could be one of them. But Pakistan State Bank data shows remittances rose by 50.7% during June 2020 to reach a record high of $2,466.2 million compared with $1,636.4 million in June 2019. In fiscal year 2020, the CENTRAL bank said, remittances increased to a historic high of $23.12 billion, 6.4% more than last year.
According to the ADB report, the total remittances to Asia are expected to drop between $31.4 billion (baseline scenario) and $54.3 billion (worst-case scenario) in 2020, equivalent to 11.5% and 19.8% of baseline remittances, respectively.
India posted a minor current account surplus in the fourth quarter of fiscal 2019-20 also aided by a perk up in remittances by Indians abroad. In India, private transfer receipts, mainly representing remittances by Indians employed overseas, increased to $20.6 billion for the fourth quarter ending March 31, up by 14.8% from their level a year ago. But in a coronavirus-stricken world, most of these workers have come back, while their jobs remain uncertain for now. This is particularly true for the Gulf region, from where more than 60% of India’s remittances flow in.
In Bangladesh, the World Bank estimates have projected that total remittances by migrant workers from Bangladesh will fall to $14 billion for 2020 – around a 25% decrease from the previous year. However, remittances in Bangladesh increased to $1832.63 million in June from 1504.60 USD Million in May of 2020.Remittances from more than 10 million citizens abroad are very important for Bangladesh and along with garment exports are key source of foreign exchange.
Saudi Arabia has been the largest source of remittances, followed by UAE, Qatar, Oman, Bahrain, Kuwait, Libya, Iraq, Singapore, Malaysia, the US and the UK. In the case of the Philippines, the ADB projected a 20.2-percent fall in remittances in 2020 under a worst-case scenario of the pandemic raging on for one year. Overseas Filipino workers have routinely sent home an average of $2.3 billion a month over the past 5 years with 2019 remittance inflows totaling $30.1 billion or roughly 8.5% of GDP.
While concluding, I pray Allah RabulAalameen that He makes us able to do what we say and give us strength to act with sincerity and faith good for our country.
“Let Deeds Correspond with Words“