KARACHI: Despite a reduction in the number of Pakistani laborers working in the Kingdom and keeping Islamabad’s economic conditions in mind, Saudi Arabia continues to be the prime source of remittances’ inflow to the country, official data showed on Tuesday.

Overseas Pakistani workers remitted $2.153 billion from the Kingdom out of the total $9.02 billion received by the country in the first five months of the current fiscal year FY19.

Since the 1970s, Saudi Arabia, the UAE, and Oman have been major markets for workers from Pakistan when a region-wide, oil-fueled construction boom created a massive demand for overseas laborers.

In Saudi Arabia, the workforce from Pakistan had peaked to 522,750 workers in 2015. However, the numbers declined to 78,019 by October this year. Between 1970 and 2018, the Kingdom attracted more than five million Pakistani workers who sent home $63.5 billion in remittances, data from the Bureau of Emigration and Overseas Employment (BEOE), and the State Bank of Pakistan (SBP) showed.

Overseas Pakistani workers remitted $9028.60 million between July to November during the current fiscal year FY19, showing a growth of 12.56 percent compared to $8021.18 million received during the same period in the preceding year, the SBP data shows.

During November this year, the inflow of workers’ remittances amounted to $1608.62 million, which is 19.58 percent less than the amount recorded in October this year and 2.02 percent higher than in November 2017.

Inflows from Saudi Arabia, the UAE, USA, UK, GCC countries, and EU countries amounted to $395.12 million, $343.21million, $ 255.78 million, $228.19 million, $151.37 million and $42.18 million respectively compared to the inflow of $409.52 million, $352.64 million, $204.28 million, $213.47 million, $191.83 million and $49.06 million respectively in November 2017.

“Repatriation of workers from KSA and imposition of taxes coupled with an economic slowdown in the Middle East, following an oil price decline are major factors contributing to the declining remittances,” Samiullah Tariq, Head of Research of Arif Habib Limited, told Arab News.

“Pakistan should focus on the quality rather than quantity in Saudi labor market,” Tariq suggested adding that skilled labor “would be able to fetch higher incomes which means higher remittances for the home country.”

Even though workers’ remittances increased marginally by 1.4 percent to $19.6 billion in FY18, they fell short of the peak inflows of $19.9 billion recorded in FY16.

Apart from a declining labor force and oil price movement, other reasons for an insufficient inflow through official channels is the systematic problems faced by overseas Pakistanis.

“The shortfall is substantial and main reason is excessive questioning by banks regarding sources etc. The crackdown on hawala and hundi system has created an atmosphere of fear and uncertainty. The overall deteriorating economic situation is also a cause. But the main reason is ban on purchasing property of exceeding PKR 4 million and vehicles by non-filers. Investment in property and stock market is no more attractive and therefore remittances are declining,” Dr. Ikram ul Haq, a senior economist and an expert on taxation matters, told Arab News.

Last week, Prime Minister Imran Khan announced plans to unveil a special incentives’ package which was aimed at encouraging overseas Pakistanis to transfer remittances through banking channels. Overseas Pakistanis, however, called for a removal of impediments and speedy transfer of remittances to their families back home.

“Our families do not get the money in effective time and sometimes they are compelled to make rounds of banks. Sometimes they get money after two to three days. In these times of fast transactions, we lag far behind. The government must ensure speedy transfer of money,” Chaudhry Muhammad Munir, a worker from the UAE, told Arab News. 

To limit the declining number of laborers moving to the Kingdom, the SBP suggests that the government negotiates with Saudi Arabia — following in the footsteps of the Bangladesh government which got a ban on the employment of its workers overturned, after prolonged negotiations with the Kingdom.

Pakistan’s stock market also reacted to the dismal output data on Tuesday by posting a 448 points decline. “Dismal home remittances data for November 2018, reports of World Bank cancelation of $250 million emergency relief loan, weak data on exports for November 2018, and falling global crude oil prices played a catalyst’s role in the bearish close,” Ahsan Mehanti, a senior equity analyst, said.

Pakistan’s exports declined by six percent and imports by three percent in November this year. Trade, during the fist five months of the current fiscal year FY19, declined by 1.29 percent and 0.78 percent as the country suffered a 2.03 percent trade deficit, data issued by the Federal Bureau of Statistics on Tuesday showed.