01 Jun 2023
Overseas Pakistanis, often referred to as expatriates, are hardworking individuals who have migrated from Pakistan to another country for better opportunities. Over 9 million Pakistanis live in foreign countries, making valuable additions to the country’s economy when they send money to Pakistan to support their families back home. They contribute significantly to their adopted societies while still maintaining close ties to their roots. Remittances are critical for Pakistan’s foreign reserves, and the recent decline in their inflows has created an alarming situation for the country’s economic stability since they typically make up almost 8.69% of Pakistan’s GDP, which is currently declining. Let’s look at how overseas Pakistanis can help stabilise the weakening economy through remittances.
As of 2023, remittances play a vital role in Pakistan's economy. These funds sent home by overseas Pakistanis account for a substantial part of the country's foreign exchange reserves. FY22 recorded $31.2 billion, while FY21 received $31.9 billion in remittances, which added significant value to the country’s economy. However, the country has observed a great decline in remittances in the last quarter of 2022 and the first quarter of 2023. Besides other reasons, the primary cause for this decline is the usage of unregulated channels of remittances by overseas Pakistanis.
Remittances not only provide financial support to the families back home, but they also have a broader economic significance. They help in reducing the country's dependence on external debt, contributing to financial stability and boosting economic growth.
Traditionally, overseas Pakistanis send money through banks or money transfer operators. However, a significant proportion of these expatriates rely on unregulated channels such as Hawala/Hundi, which doesn’t benefit the country’s economy besides risking their hard-earned money due to the unavailability of any tracking system.
Typically, traditional methods often have their drawbacks, such as high transaction fees and long processing times. These challenges interdict most expatriates from using regulated channels, and they eventually turn towards unregulated and untrusted channels.
Recent years have seen a rise in digital remittance platforms, revolutionising the way funds are sent home. Every overseas Pakistani can enjoy several benefits when making an online money transfer to Pakistan from abroad through a trusted remittance provider such as ACE Money Transfer.
These platforms offer faster transactions, lower fees, and user-friendly interfaces, thereby providing a more convenient method of sending money. Mainly, ACE Money Transfer’s mobile app and website offer a flawless, smooth, secure, and convenient user experience, attracting millions of customers to transfer funds across borders.
Customers not only enjoy reasonable transfer costs and competitive exchange rates while using digital remittance channels, but they also get peace of mind with unbreakable security protocols. ACE Money Transfer is an FCA-regulated Authorised Payment Institution (API) that uses end-to-end data encryption for enhanced security and offers impeccable and convenient user interfaces on its mobile app and website. Customers can transfer funds to their loved ones with only a few taps on their mobile screen 24/7 or on the go without worrying about bank holidays and Sundays.
By adopting these digital platforms, overseas Pakistanis can significantly increase the volume and frequency of remittances, leading to a surge in the inflows to Pakistan. Every amount sent to Pakistan through regulated channels like ACE Money Transfer will be counted with positive impacts on its economy. By using regulated online money transfer platforms, overseas Pakistanis will benefit from amazing service features while adding value to Pakistan’s economic growth simultaneously.
Increased remittances can stimulate economic growth, improve the balance of payments, and strengthen foreign exchange reserves. This, in turn, can lead to controlled inflation and stable currency value, which has currently created an alarming situation for the people of Pakistan.
At a micro-level, they can elevate the living standards of families back home, provide financial stability, and reduce poverty. You can benefit manifold by using digital remittance providers that will positively impact both ends, i.e. the remitters and beneficiaries back home. If you send money to Pakistan online via ACE Money Transfer’s services, you benefit from the highest exchange rates, the lowest transfer costs, and opportunities to win enticing rewards. These advantages can help you ensure financial stability, reduce burden, and send financial support from abroad in a timely and efficient manner.
To boost remittance inflows, the government has launched various incentives for overseas Pakistanis, including premium prize bonds and foreign currency accounts. The Pakistan Remittance Initiative (PRI) is the most significant strategy opted by the State Bank of Pakistan, the Ministry of Finance, and the Ministry of Overseas Pakistanis, streamlining the entire remittance process by providing convenience, speed, security, and incentives.
As you step further into the digital age, there's an array of opportunities for overseas Pakistanis to contribute to their homeland's economy. These include investing in the country, contributing to crowdfunding initiatives, and participating in government-backed diaspora bonds. They can achieve such goals by turning towards the regulated channels of remittances to ensure their funds not only reach home safely, swiftly, and securely but also add significant value to Pakistan’s GDP.
The role of overseas Pakistanis in boosting remittance inflows to Pakistan is paramount. As you move towards a more digitised world, their contribution through modern remittance channels can significantly propel the country's economic development. Furthermore, the shift towards these platforms can make the process more efficient and beneficial for the senders as well as the receivers. You can make every money transfer to Pakistan from abroad count if you use only regulated channels of remittances such as ACE Money Transfer.
FAQs
What are remittances?
Remittances are funds transferred from migrants to their home countries. They play a critical role in the economies of developing countries.
Why are remittances important for Pakistan?
Remittances contribute to Pakistan's economy by improving the balance of payments, strengthening foreign exchange reserves, and stimulating economic growth.
What are digital remittances?
Digital remittances refer to funds transferred through digital platforms. They offer a faster, more convenient, and often cheaper method of sending money compared to traditional methods.
How can the government encourage remittances?
The government can encourage remittances by providing incentives such as lower transaction fees, premium prize bonds, and foreign currency accounts for overseas Pakistanis.
How can overseas Pakistanis contribute to Pakistan's economy apart from sending remittances?
Apart from sending remittances, overseas Pakistanis can contribute to Pakistan's economy by investing in local businesses, participating in government-backed diaspora bonds, and supporting crowdfunding initiatives.
