ISLAMABAD: Prime Minister Imran Khan on Thursday said that the country’s trade deficit was the basic compulsion for the government to go to the International Monetary Fund (IMF).
“Although our exports are increasing, they are still less than our imports. This causes pressure on our rupee, devaluation of our currency and inflation,” the prime minister said while addressing the launching ceremony of Sohni Dharti Remittance Programme (SDRP), aimed at encouraging the use of formal channels for remittances.
Though Pakistan would be making highest exports this year, other matching economies till the 1960s like Singapore (now around $200 billion) and Malaysia (around $300bn) were far ahead of the country in terms of annual exports, he noted.
The prime minister said Pakistan had so far gone to the IMF to seek financial support for 20 times.
Mr Khan said with Pakistan’s economy growing and imports increasing, there was pressure on the current account. “When pressure comes on the current account, it also puts pressure on the rupee and we have to approach the IMF,” he added.
Mr Khan termed nine million overseas Pakistanis the country’s asset and urged his economic team to focus on incentivising and facilitating them for sending remittances and investing in the country through banking channels for a win-win situation.
He said the overseas Pakistanis should be treated as VIPs, because incentivising and facilitating them would benefit the country.
The Sohni Dharti Remittance Programme is a point-based loyalty programme under which remitters and their beneficiaries will accumulate reward points by sending remittances through formal channels (State Bank-regulated entities) and will redeem those points at participating public sector entities (PSEs) by availing their services free of cost.
A mobile app, in English and Urdu, for iOS (Apple) and Android (Google) is available for remitters to download for registration and later on for point redemption at the PSEs.
A remitter can add one beneficiary relative and can transfer reward points to him/her for utilisation. A centralised back-end system is developed and run by 1-LINK.
The prime minister said the government would launch another programme under which the overseas Pakistanis would be able to purchase houses and invest in real estate in their homeland through Roshan Digital Accounts (RDAs) in a safe and transparent manner.
He said the banks would check and verify legal details of housing society so that the overseas Pakistanis could be protected from any fraud.
The prime minister directed the planning division to offer tax incentives to the overseas Pakistanis on their investment in real estate.
A per the criteria under Sohni Dharti Remittance Programme, Green category remitter will be awarded one per cent of up to $10,000 annual remittance, 1.25pc for Gold category sending from $10,001 to $30,000 and 1.5pc for Platinum category sending annual remittance of over $30,000.
The Public Sector Entities would offer special services for the entitled remitters, including on intentional air tickets of PIA, payment for extra luggage, mobile phone duty payment, purchase of vehicles, duty on imported vehicles, renewal of CNIC/NICOP, insurance premium, OPF school’s fee and purchases from Utility Store.
Further, the option of cash redemption is also being worked out.
Prime Minister Khan said Pakistan, which was ahead of countries like Hong Kong, Singapore and Malaysia in exports in 1960s, was now lagging behind due to past neglect and facing the issues of trade and current account deficits.
However, he noted with satisfaction that with growth in large scale manufacturing sector during the Covid-19 pandemic remaining on positive trajectory, enhanced remittances from overseas Pakistanis had helped bridge the gap in current account.
He said with efforts afoot to enhance foreign direct investment as well, the remittances by overseas Pakistan had been a big support in the difficult time.
Governor of State Bank Reza Baqir said after the success of RDAs, the launching of SDRP application by the central bank would help the common or less educated overseas Pakistanis to send their remittances by registering on the SDRP application, which required minimum information, including the details of their identity cards and passports.
He said the State Bank under the vision of Prime Minister Khan had also launched a loan scheme for buying 5 and 10 Marla Houses. While applications seeking loans of Rs236 billion had been received so far, Rs90bn loan had been approved and Rs25bn disbursed, he added.