By Rabia Anum
Islamabad: In another blow to Pakistan's near-default economy, inflow of workers remittances dropped by 14.3% as compared to last year.
According to the State Bank of Pakistan's data, worker remittances remained at US$2.1 billion during the month of November 2022. During November, remittances decreased by 4.8 percent on a month-to-month basis while falling by 14.3 percent on a year-to-year basis.
From last three months, remittance are on decline. Overseas Pakistanis in Saudi Arabia were the largest contributor, having sent $498 million in November 2022.
In October, overseas Pakistanis living in Saudi Arabia sent home 20 percent more money. Pakistanis living in the United Arab Emirates sent home $378 million in remittances during the last month. The remittances sent by Pakistanis stationed in the United Kingdom fell 5% as Pakistanis sent home $314 million last month. Country's foreign exchange reserves are also declining fast. According to the State Bank, reserves fell to their lowest level since January 2019.
On December 2, 2022 the total foreign reserves were $6.715 billion only. The rupee is also falling, and analysts fear it may devalue to PKR 270 against the dollar in the next few weeks. On December 14, US dollar was being traded at Rs. 224.71 in interbank while in open market it was being traded on a premium of over Rs 20.
Federal Finance Minister Senator Mohammad Ishaq Dar, who two months earlier vowed to bring down the dollar to under Rs. 200 in one month, is now blaming smuggling. Addressing a discussion titled "Sustained Economic Growth: Roadmap and Roadblocks," held in Islamabad on Tuesday, the finance minister said not only in Pakistan but in any system, there are certain speculators, gamblers, and "hundi walas" who take the country’s currency hostage. He said it was the duty of the government to keep a tight check on them. The minister said his government has started a crackdown, and during the last 24 hours, customs caught a person smuggling $100,000.
He said Pakistan imports urea fertilizer for domestic consumption and gives subsidies on it, but it is smuggled to a neighboring country, which causes huge losses to the national exchequer.
Dar revealed during his address that Pakistan’s debt has also increased to an "unbearable" level from Rs30,000 billion to Rs54,500 billion.
Ishaq Dar has been claiming that Pakistan is not going to default, but many believe Pakistan has already defaulted, as it has no money to clear around 250 containers of onions, worth approximately $2.107 million, 63 containers of ginger, worth $816,480, and 104 containers of garlic, worth $2.533 million, stuck at the Karachi Port.
In local markets due to acute shortage. Onion is being sold at Rs 230 per kg in different parts of the country. Last year one kg price was around Rs 50.
Pakistan already became a "blocked-fund" country in April, along with Sri Lanka. Recently, it failed to pay around $225 million of airlines’ dues, the global airline association IATA said last week.
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