Interview with Mr. Barkatullah Lone, from Saudi Arabia
Profile: Mr. Barkatullah Lone is Chairman of GB International Economic Forum and a renowned young Economist of Pakistan. He was ranked in the top ten Economists of Pakistan in the year 2017. He is a Chartered Accountant from England & Wales, Chartered Management Accountant from UK, Chartered Certified Accountant from UK, Chartered Global Management Accountant from the USA, Gold Medalist Management Accountant, Public Finance Accountant from Pakistan plus he holds master’s degree in Economics and Law from Karachi University.
He has been associated with the corporate sector in Finance and Audit profession at various positions (CFO/GM Finance/Chief Internal Auditor) for the last many years. He has rendered his professional Finance/Audit/Accounting services in Pakistan as well as abroad. Simultaneous with his job career, he has been appearing at various Local and International TV channels as Economic & Financial Analyst for the last Eight years. His Articles on Economy and Finance are also published in various reputed magazines. Barkatullah Lone has command over multiple languages, in particular, he has full command over written and spoken Arabic.
Association with Organization: Presently, Barkatullah Lone is associated with a reputed Saudi Conglomerate Group (Arfad Group) in the Eastern Province of KSA as Group Chief Financial Officer. He has joined this company with a vision to professionalize the business functions and to streamline the Processes by embedding the business activities into integrated Information Systems. He has ample experience of converting the traditional owner-based culture into a corporate culture in his ex-companies which he is envisioning to inculcate a corporate culture in the existing company as well. Arfad Group has been one of the best Corporate Groups of Saudi in terms of Corporate Social Responsibility.
PAKISTAN & GULF ECONOMIST sought the views of Mr Barkatullah Lone on remittances. His views are as follows:
Roshan Digital Account enables overseas Pakistanis to open an account digitally, i.e., online from anywhere in the world without visiting the bank branch. Account can be opened in PKR or foreign currencies such as US Dollar, Euro or GBP. This account is used only for sending the foreign remittances. The key benefit of Digital Account is that the expatriate Pakistani can send the remittances to this account without getting approval of any bank especially the State Bank. Majority of overseas Pakistanis have appreciated this initiative of the State Bank of Pakistan and with the passage of time, many overseas Pakistanis are going for this option for remitting their funds to Pakistan.
Digital Account provides access to all traditional account services as well such as bill payments, e-commerce, etc. Major banks such as HBL, Meezan, Al-Falah, Faysal, MCB and UBL provide this facility to overseas Pakistanis.
In terms of remittances by Pakistani diaspora, Saudi Arabia ranks at the top which accounts for around 30% of total remittances and then UAE which accounts for around 22%. Rest of the Gulf countries too have good contribution in remittances but it is the USA that ranks the 3rd largest country in terms of Pakistani diaspora remittances. Qatar ranks third Gulf country after Saudi Arabia and UAE that contributes to the remittances of Pakistan. Remittances from Kuwait are too nominal due to some visa restrictions, else Kuwait too has huge potential to take in Pakistani skilled, semi-skilled workforce.
We need to understand that the way four European countries (Germany, France, Italy and Britain) and the USA play a pivotal role in the Pakistani exports as they contribute to more than 60% of Pakistan’s total exports; exactly the same way, Saudi Arabia and UAE are playing a key role in terms of Pakistan’s remittances just because the two countries contribute more than 55% of total remittances by Pakistani diaspora living out of Pakistan.
I feel that the potential of accommodating Pakistani workforce in Gulf countries is much more than this as we are mainly dependent on just Saudi Arabia and UAE at the moment. Even Saudi Arabia and UAE usually prefer to get in Indian labor force due to low cost and less issues which has had a big dent on the intake of Pakistani workforce. There is a huge potential to increase the workforce in Saudi Arabia and UAE and in other Gulf countries like Bahrain, Qatar and Oman.
In terms of Pakistani remittances by the diaspora living abroad, the USA stands third and Europe stands the fourth after Saudi Arabia and UAE. Therefore, the importance of the remittances sent by our Pakistani working in the USA and Europe also play a pivotal role in the economy of our country. Workers’ remittances are the single largest source of foreign currency for Pakistan ahead of exports. They provide key support to currency and forex reserves by bridging the balance of payments in the face of reduced dollar flows from other sources. The rising remittance flow has so far helped support the current account that has posted a big surplus, creating a semblance of external-sector stability. But the contributions of expats can do only so much. Remittance from the USA and Europe have helped bring this stability.
Pakistan is beset by the twin deficits, Fiscal and Current Account deficit. Pakistan’s fiscal deficit is structural. The country has long been struggling to meet its expenses with tax and non-tax revenue and has long been filling in the gap through internal and external borrowings. Continuous buildups in such borrowings mean an increase in the annual debt servicing obligations. We are now at a stage that after meeting those obligations and after financing defense and administrative budgets; little is left for developmental expenses. And, low-level developmental spending continuously makes it difficult to lay a solid foundation of sustainable economic growth in future. Current account deficit has risen in the fiscal year 2021-22 comparing to last fiscal year due to many factors which need to be controlled by the new government of PML (N) else this can have devastating impact on the Pakistan economy. In view of the twin deficit, remittances are crucial for economy as the remittances help the current account deficit to balance and the rupee value remains under control.
Exchange companies and banks play a pivotal role in terms of foreign remittances received by Pakistan in recent times. These Financial Institutions ensure that expatiate Pakistanis send their earnings through official channel. On the one hand, exchange companies and banks facilitate the government in getting the remittances through legal channel and it provides an excellent service to the expatriate Pakistanis to transfer their earnings to their families in a safe and secure mood. In recent times, there has been fierce competition among the exchange companies and banks for this very service which has created a healthy competition in money market and the expatriate worker has got multiple of choices to select for remitting his earnings to the family. Expatriate Pakistanis face a big issue of remitting the funds on fast track as it takes three days usually to reach funds. It is mainly because of few of our banks are blacklisted due to which international transfer is getting delayed. Moreover, standing of our commercial banks in the global banking system is not that good.