- Remittances from Gulf nations remarkable, need to improve relations with others for better outcome
Interview with Mr Hamad Rasool Bhullar — an analyst
PAGE: Tell me something about yourself, please:
Hamad Rasool Bhullar: I am currently working with a large public sector organization. With respect to my work with the financial sector, I have been involved in research and training for over 28 years and so far, and conducted over 300 trainings on different aspects of Finance, Business Ethics, Audit and Corporate Governance from basic concepts to professional applications in Projects Finance, Shariah Compliant risk management, investment management and Corporate Governance etc. in addition to the freelance consultancy and Financial Advisory in these fields I have also remained a non-executive member on the Board of an Investment Bank.
My qualifications and experience over the last 32 years, have mainly been a mix of Accountancy, Corporate Law, IT, Economics, Corporate Finance, Islamic Finance & Takaful, Business Turnaround, Projects Finance, Audit & Ethics with trainings and business advisory in these areas of corporate sector as well as public sector within and outside Pakistan.
PAGE: How would you comment on Roshan Digital Accounts?
Hamad Rasool Bhullar: A good initiative indeed by the Government of Pakistan and State Bank of Pakistan being a great step towards financial growth. I had said in a previous discussion that Pakistani banks have to explore this opportunity for the development of Pakistan by approaching the non-resident Pakistanis who have great funds with them to attract these funds by offering and approaching the people. Benefits of any ‘investment structure’ flow to the stakeholders if the plan gets success, which depends on the point where all the stakeholders agree and work on common agenda. Instead of spending more on advertisement in local media, they must produce certain case points in videos and share them with the possible depositors. However, the current scenario calls for a revised structuring of this plan as the interest rate in Pakistan have hugely gone up with a major political shift.
PAGE: What is your perspective about the remittances sent by the Pakistani diaspora residing in Gulf countries?
Hamad Rasool Bhullar: As it an established fact that a major chunk of our remittances come from the Gulf region. By a careful estimate in Jan 2022, a total of $32 billion in remittance inflows was expected for the current fiscal year 2021-22 from over nine million overseas Pakistanis all over the world. As per the official figures from SBP, the workers’ remittances for March 2022 rose to their highest level in history at $2.8 billion, while cumulatively, remittances reached at $23 billion during the first 9 months of FY22, up 7.1% over the same period last year. Of this total a major component came from UAE and other Gulf countries which stands at almost $860 million in March 22. One of the major reason of high remittances from Gulf unlike other areas of EU and USA, is that the Pakistani workers are typically not having residential status in the Gulf.
PAGE: How helpful are the Pakistani diaspora living in the USA and Europe in terms of remittances?
Hamad Rasool Bhullar: As a majority of Pakistanis living in USA and Europe are educated and having mostly residential status. The ratio of remittance remains lower than Gulf countries. Further to that, the ratio of outflow in this region is quite high as the huge amount is paid out in other settlements to these regions by the emigrants from Pakistan who plan to settle in these regions. Although the March data of remittances from United Kingdom was $401 million and from United States of America was $300 million, this is quite low as compared to Saudi Arabia alone, which stands at $678 million. Remittances from UK, EU and USA can only improve when Pakistani government works on social, educational and legal structure of the society by making Pakistan better habitable with trust in the system.
PAGE: Pakistan is beset by twin deficits. Remittances are crucial for the economy. Could you give your views on it?
Hamad Rasool Bhullar: In the case of European countries and the USA, most of the Pakistanis go for getting settled there and this way a huge amount is shifted first while getting their permanent residential status, and the second problem comes that as they are getting settled there so the ratio of their earning in these countries getting converted into remittance is quite Low. As I talked earlier, we have to make Pakistan much better in terms of quality-of-life index. This does not seem to be achievable unless we raise our judicial system from 130 to at least 30 otherwise we will continue to talk on such issues only for the taste of words without any practical reality. We have to get rid of the FATF trap at the earliest. The good thing is that our judiciary has awarded capital punishment to late Priyantha Kumara case. Other such pending matters also need to be settled in true spirit then only we can get control over the twin deficits in our society.
PAGE: How would you comment on the role of exchange companies operating in Pakistan?
Hamad Rasool Bhullar: Due to a big number of informal money-exchangers, these exchange companies were established in the year 2002 with the primary objective to maximize documentation in forex dealings within our society and also to facilitate the foreign remittances from many countries. These companies work through a Foreign Currency Account (FCA) with the SBP having special license from SBP.
I believe these companies have played their due role in a positive way. Exchange Companies have to submit the details of daily inflows and outflows under assigned categories to the SBP. We can further expand the role of these companies if we get our IT export and earnings also routed through these exchange companies as effective tool to earn more Foreign Exchange. SBP have to devise an effective system as these earnings and remittances are also a form of export by the Pakistani nationals.