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Impact of Remittances on Pakistan’s Economy – History and Wa
Transcript of Impact of Remittances on Pakistan’s Economy – History and Wa
What is remittance?
Types of transferred money.
Forms of remitted money.
TYPES OF REMITTANCE TRANSFERS
FORMS OF REMITTED MONEY
Migrant Worker Remittances
Social Worker Remittances
CHANNELS OF REMITTANCE
Wire transfers (SWIFT)
Money transfer agencies
Foreign exchange broker/firms
REASONS FOR INCREASE IN REMITTANCES
Increased demand for labor in M.E.
New job opportunities in Europe
Job opportunities in the US and UK
Australia: an attractive job market
Investment return in host country & Pakistan
Shift from unofficial channels to official channels
Low transaction cost over different channels
The transfer of money by migrant/non migrant workers residing in foreign countries to their home countries for many different purposes.
Impact of Remittances on Pakistan’s Economy – History and Way Forward
Remittances within the same country
Remittances between two different countries
Sent from foreign countries to one’s home country
Process of sending money to foreign countries from one’s home country
Fei ch’ien System
Chit System – Yonder day’s ATM
Whitened black money
Kickbacks and commissions
Illegal earnings (smuggling, extortion etc)
Legally accepted conduits:
Rapid increase in out migration or workers
MAJOR HISTORICAL EVENTS AND THIER IMPACT ON REMITTANCES
The nuclear tests 1998
From USD 1.5 billion in 1997/98 to USD 1.06 billion in 1999/2000
Increased money transfer through unofficial means
The 9/11 attacks on the US
Increased vigilance post 9/11
Anti-money laundering law 2002
The real estate collapse in UAE 2009
Pakistan Remittance Initiative (PRI) 2009
Remittances and GDP
One million dollars increase in Remittances
Eleven million dollars increase in our GDP
Remittances and Poverty Rate
Remittances and Employment
Increase in aggregate demand
Global remittances will reach $515 billion in 2015
Lion’s share for developing nations
7th largest remittance receiving state
East Asia & Far East
New financial instruments by the banking sector
Focus on official channels
Beyond monetary remittances
Generation of new strategies
Setting-up remittances market
Direct remittances towards investment activities
New migration policy
Reducing the cost of migration
Improving the recruitment system policy
Improving the working environment of migrants
"Whether Pakistan will be able to sustain the recent increase in remittances depends on whether the rise in labor migration is to continue and, more importantly, if the composition of the migrating workforce continues to tilt in favor of highly skilled workers. Obviously, any positive impact of a continued export of high-skilled labor should be carefully weighed against the potential cost of this ‘brain drain’. "