Remittances From Gulf Countries Are Falling: SBP


Remittance inflows from different gulf countries to Pakistan are declining due to the challenging situation of employments for overseas Pakistanis in different countries.

The data of State Bank of Pakistan (SBP) showed that the remittances from Dubai and Sharjah are declining mainly due to employment challenges being faced by Pakistanis in these two states.

During the first quarter of the current financial year 2019-20, remittances from the UAE declined by $88 million as compared to the same period last year, SBP pointed out in its recent quarterly report.

It further stated that a significant number of workers have returned from the UAE.

The central bank's data showed that remittances from Dubai and Sharjah reported a negative trend for the past two years.

In the first half of FY20, remittances from these states stood at $1.57 billion and $6.24 million respectively which reduced from $1.61 billion and $28.32 million reported in the same period two years earlier.

Interestingly, the remittance from other states of UAE including Abu Dhabi, Ajman, Ras Al Khaima to Pakistan showed impressive growth.

Remittances increased to $752 million from Abu Dhabi in the first half of FY20 from $518 million in FY18. Similarly, remittance inflows from UAE's other states surged to $13.3 million from $2.8 million during the period.

The trend shows that a significant number of new and old workforce is moving to other states of UAE instead of Dubai and Sharjah for better job and business opportunities. Remittances from UAE improved in the second quarter to reach $2.34 billion by the end of December 2019, showing flat growth compared to the previous year.

Remittance values from UAE are second highest in Pakistan after Saudi Arabia.

Remittances From Kuwait and Bahrain Decline

Remittances from other oil-producing countries have also been declining in Pakistan in the past two years.

Remittances from Kuwait and Bahrain dropped to $347 million and $156 million in the first six months of FY20 whereas remittances from these countries stood at $395 million and $203 million in the same period of FY18.

Interestingly, remittances from the other Gulf States such as Qatar and Oman witnessed consistent growth in the same period offsetting the declining trend of Kuwait and Bahrain.

Pakistan's economy heavily relies on remittances of its overseas workers. The values of remittances continue to improve each year though the true potential is yet to be realized due to unutilized banking channels and limited exports of human resources to different countries.

It is high time that the incumbent government realized the various changing trends of worker demand in different countries and devise a long-term strategy to enhance its exports of manpower to countries looking for migrants and skilled workers.

Source: Pro Pakistani