The Prime Minister has always held a special affinity for Overseas Pakistanis- he has credited them for their contributions to the Pakistani economy, and to his own project, Shaukat Khanum Hospital, time and again, even before taking office. It is apparent that the government sees overseas Pakistanis as a useful asset for the economy- and now it is setting in place policies to utilise this asset.
On Thursday, the Prime Minister and the Finance Minister, while lauding the charitable efforts of overseas Pakistanis and the contribution that expats have made to the economy by way of remittances, formally launched ‘Pakistan Banao Certificates’ (PBCs) to tap into the savings of over eight million overseas Pakistanis for securing much-needed foreign exchange reserves to stabilise the country’s economy. According to Finance Minister, the PBCs are available with three-year and five-year maturity period at profit rates of 6.25 per cent and 6.75pc per year, respectively. The scheme also involves several further incentives for investors including exemptions from withholding tax and compulsory deduction of Zakat, and the option to encash the certificates prematurely in Pakistani rupee without any deduction.
A new economic policy was direly needed considering the past few months have been difficult. Hikes in prices of electricity, gas and other commodities have hit the lower-income consumers particularly hard, and foreign debt is high. The announcement was a response from the government to alleviate the hardship afflicted by the harsh economic conditions.
Pakistan makes most of its revenue through its foreign remittances and it is a good initiative of the government to increase incentives for investment from Overseas Pakistanis. Remittances had slowed down massively in late 2018 and it is hoped this step by the government brings back trust in the economy. However, Pakistan should not be a country overly dependent on its expats-this should not be the only step the government takes to increase foreign reserves.