Pakistani Diaspora Sends Home $19.3 Billion in Remittances Amid Falling Oil Prices

[RiazHaq]

http://www.riazhaq.com/2016/04/pakistan-received-193-billion-in.html

Pakistani diaspora sent home $19.3 billion in remittances in 2015, representing 12.8 % increase over 2014, according to a World Bank Report titled "Migration and Development Brief" released today.

Pakistan's $19.3 billion in remittance make up 6.9% of 2014 GDP, essentially closing the rising trade deficit amid the nation's falling exports.

The 12.8% increase over 2015 is substantial but it is down from 16.7% jump seen in 2014 over 2013. The report attributes the slower remittance growth from Gulf Cooperation Council (GCC) countries like Saudi Arabia and United Arab Emirates to falling oil prices.

This report comes soon after the Panama Leaks that show how Pakistan's corrupt elite, including Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat.


Overseas Remittances in South Asia Source: World Bank


In Q4 of 2015, year-on-year growth of remittances to Pakistan from Saudi Arabia and the UAE were 11.7 percent and 11.6 percent, respectively, a significant deceleration from 17.5 percent and 42.0 percent in the first quarter, said the report.

Global remittances, which include those to high-income countries, contracted by 1.7% to $581.6 billion in 2015, from $592 billion in 2014, the World Bank said.

India was the top recipient with $68.9 billion in remittances in 2015, a decline from $70 billion in 2014. This marks the first decline in remittances since 2009, according to the report.

The growth of remittances in 2015 slowed from 8% in 2014 to 2.5% for Bangladesh, from 16.7% to 12.8% for Pakistan, and from 9.6% to 0.5% for Sri Lanka. “Slower growth may reflect the impact of falling oil prices on remittances from GCC countries,” the report said.

The only country in South Asia to see dramatic growth in remittances was Nepal. The overseas Nepalese workers sent home $7 billion in 2015, an increase of 20.9 percent in 2015 versus 3.2 percent growth in 2014. After the devastating earthquake that hit the Himalayan nation, many Nepalese migrant workers returned home to take care of their families, as the average number of returns at the airport jumped five times to around 4,000 per day.

“Remittances are an important and fairly stable source of income for millions of families and of foreign exchange to many developing countries,” said Augusto Lopez-Claros, director of the World Bank’s Global Indicators Group.

“However, if remittances continue to slow, and dramatically as in the case of Central Asian countries, poor families in many parts of the world would face serious challenges including nutrition, access to health care and education,” Lopez-Claros said.


Related Links:

Haq's Musings

Remittances to Pakistan

Pakistani Names in Panama Leaks

Pakistan Diaspora is Among the World's Largest

Pakistan's Corrupt Elite

Remittances Offer a Lifeline to Pakistan's Poor

Aid, Investment, Trade and Remittances to Pakistan


http://www.riazhaq.com/2016/04/pakistan-received-193-billion-in.html

 

[VCheng]

Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat.

Eh? How does that work, Sir?

 

[RiazHaq]

Eh? How does that work, Sir?

There are 4 sources of US dollars in Pakistan: Exports, Foreign Aid, FDI and Remittance from Pakistani diaspora.
Of these, remittances represent the largest or the second largest share. These are the dollars that are moved and hidden offshore by Pakistan's corrupt elite.

 

[masclasses]

Salute to overseas Pakistanis

 

[VCheng]

There are 4 sources of US dollars in Pakistan: Exports, Foreign Aid, FDI and Remittance from Pakistani diaspora.
Of these, remittances represent the largest or the second largest share. These are the dollars that are moved and hidden offshore by Pakistan's corrupt elite.

But Sir: All currencies merely do their job by endlessly recirculating. How do the dollars remitted go from those who receive it to the Sharifs to be taken out of the country again? Do they just hand them over?

 

[RiazHaq]

But Sir: All currencies merely do their job by endlessly recirculating. How do the dollars remitted go from those who receive it to the Sharifs to be taken out of the country again? Do they just hand them over?

I suggest you read Capitalism's Achilles Heel by Raymond Baker that details how the corrupt third world leaders move money overseas.

Baker says one of the ways Sharifs have done it is through over-invoicing by 20-30% of imports in Pakistan by Sharif's handpicked middlemen. For example, Pakistan imported wheat from US in 1990s when the imports over-invoicing generated $58 million in "commission" for Sharifs through middlemen.

"At least $58 million skimmed from inflated prices paid for imported wheat from the United States and Canada. In the wheat deal, Mr. Sharif ’s government paid prices far above market value to a private company owned by a close associate of his in Washington, the records show. Falsely inflated invoices for the wheat generated tens of millions of dollars in cash."

http://www.riazhaq.com/search?q=raymond+capitalism

 

[VCheng]

I suggest you read Capitalism's Achilles Heel by Raymond Baker that details how the corrupt third world leaders move money overseas.

Baker says one of the ways Sharifs have done it is through over-invoicing by 20-30% of imports in Pakistan by Sharif's handpicked middlemen. For example, Pakistan imported wheat from US in 1990s when the imports over-invoicing generated $58 million in "commission" for Sharifs through middlemen.

"At least $58 million skimmed from inflated prices paid for imported wheat from the United States and Canada. In the wheat deal, Mr. Sharif ’s government paid prices far above market value to a private company owned by a close associate of his in Washington, the records show. Falsely inflated invoices for the wheat generated tens of millions of dollars in cash."

http://www.riazhaq.com/search?q=raymond+capitalism

But the way you have worded your statement that I quote above is totally disingenuous, Sir.

This what you said: "Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat." Now please show how what you have stated above translates into this.

The remittances are used by those who receive it, and then all those dollars and other hard currencies recycle. That is how it works. After all, the Sharif are not the only ones doing what you describe. Most politicians and businesses in Pakistan work this way, and not just now. This is the way it has been for decades. In fact, most military deals have elements of this dishonesty baked in as well. Imran Khan has avoided an audit of several million dollars in donations for such reasons as well.

They are all crooked, so singling any one out is only a demonstration of your own selective bias, and hence dishonest in the extreme.

 

[Providence]

But Sir: All currencies merely do their job by endlessly recirculating. How do the dollars remitted go from those who receive it to the Sharifs to be taken out of the country again? Do they just hand them over?

Don't ask too much of a conceptual question. It destroys rhetorics

I suggest you read Capitalism's Achilles Heel by Raymond Baker that details how the corrupt third world leaders move money overseas.

Baker says one of the ways Sharifs have done it is through over-invoicing by 20-30% of imports in Pakistan by Sharif's handpicked middlemen. For example, Pakistan imported wheat from US in 1990s when the imports over-invoicing generated $58 million in "commission" for Sharifs through middlemen.

"At least $58 million skimmed from inflated prices paid for imported wheat from the United States and Canada. In the wheat deal, Mr. Sharif ’s government paid prices far above market value to a private company owned by a close associate of his in Washington, the records show. Falsely inflated invoices for the wheat generated tens of millions of dollars in cash."

http://www.riazhaq.com/search?q=raymond+capitalism

Well just one problem with this theory and it is at a fundamental level. Over invoicing can lead to loss of tax revenue which got nothing to do with remittances !
Plus, the point of over invoicing is somehow to keep the earning/money hidden. Why would he then remit the money and document the transaction ?

 

[VCheng]

Don't ask too much of a conceptual question. It destroys rhetorics

Sir, there is rhetoric, and then there is malicious bought-by-the-word rhetoric. The latter desreves to be destroyed.

 

[RiazHaq]

Don't ask too much of a conceptual question. It destroys rhetorics



Well just one problem with this theory and it is at a fundamental level. Over invoicing can lead to loss of tax revenue which got nothing to do with remittances !
Plus, the point of over invoicing is somehow to keep the earning/money hidden. Why would he then remit the money and document the transaction ?

It has everything to do with remittances that make up the biggest or the second biggest source of hard currencies in the country. Payments of over-invoiced imports are made with these funds that are derived from remittances. The over-invoiced amounts are then taken by the corrupt officials kept in offshore accounts

 

[Rusty]

But the way you have worded your statement that I quote above is totally disingenuous, Sir.

This what you said: "Prime Minister Nawaz Sharif's family, are moving and hiding in offshore tax havens the hard-earned dollars sent home by overseas Pakistanis to keep Pakistan's economy afloat." Now please show how what you have stated above translates into this.

The remittances are used by those who receive it, and then all those dollars and other hard currencies recycle. That is how it works. After all, the Sharif are not the only ones doing what you describe. Most politicians and businesses in Pakistan work this way, and not just now. This is the way it has been for decades. In fact, most military deals have elements of this dishonesty baked in as well. Imran Khan has avoided an audit of several million dollars in donations for such reasons as well.

They are all crooked, so singling any one out is only a demonstration of your own selective bias, and hence dishonest in the extreme.

It's not that hard actually.

I send home Rs100 to my family, they then buy shoes for Rs100, of which 17% goes in VAT.
That 17% is then looted by the Sharifs and what not as it's "government money." Which eventually ends up in offshore banks and shell companies in Panama.

No one is saying sending money out of the country is a bad thing, there are legitimate reasons to do that. What people are upset about is the corruption money that is sent out.

And I am sorry but "Others do it too, so it's okay for me to do is" is complete and utter nonsense.
If other's are doing it, then it's the Sharifs job to find them and jail them, not join them.


But again, Pakistan will forever be boot lickers on the world stage when we have people like this guy defending corruption.

 

[VCheng]

That 17% is then looted by the Sharifs and what not as it's "government money."

So how is this looted from government coffers? It is the government bureaucracy that makes these payments, for a certain percentage of the cut, of course, no matter who is in power. Nice job!

 

[livingdead]

the amount stashed away by NS is a small fraction of remittance, it wont even make a dent.