17 January 2005	Monday	06 Zilhaj 1425

ISLAMABAD, Jan 16: "The unofficial transfer of money by overseas Pakistanis through Hundi is again on the rise as remittances sent through official channels are declining," said Enver Baig , a member of the senate committee on labour, manpower and overseas Pakistanis, here on Sunday.

Replying to a question about the reason for decrease in remittances sent through official channels during 2004, Senator Baig said the decrease in remittances occurred despite the government's efforts to publicize the Foreign Exchange Remittance Card (FERC) scheme issuing gold and silver cards to those overseas Pakistanis sending foreign exchange equivalent to $10,000 and $2,500 per annum respectively.

He said the government failed to capitalize on the opportunity provided by the 9/11 incident as people had once again started relying on the Hundi system. Before 9/11 unofficial estimates showed that almost $4billion were routed to Pakistan through the Hundi system.

Dilating on the reasons for decrease in remittances, Senator Baig said, "The difference in unofficial and official exchange rates and the delay by the banks to give money to the dependents of overseas Pakistanis were other factors as to why overseas Pakistanis were relying on the Hundi system."

He said the banks hold on to the money sent by overseas Pakistanis for a considerable period of time, thus shaking the confidence of overseas Pakistanis in sending foreign exchange through official channels.

According to official figures of the Ministry of Labour, Manpower and Overseas Pakistanis obtained by Dawn, the remittances sent by overseas Pakistanis amounted to $13.62 billion since 1998-99. However, the increase in remittances through official channels, seen after 9/11, declined in 2003-04 by 8.2 per cent, official data reveals.

The year-wise remittances received from overseas Pakistanis since 1998-99 show that $1,060.19 million were remitted in 1998-99, $983.73 million in 1999-2000, $1,086.57 million in 2000-01, $2,389.05 million in 2001-02, $4,236.85 million in 2002-03, and $3,871.58 million in 2003-04.

Official figures show that home remittances from Pakistanis based in the US witnessed a quantum jump when 9/11 happened in 2001. Before 9/11, Pakistanis based in the US sent only $134 million in 2000-01.

However, the figure of remittances from the US increased to $778.98 million in 2001-02, $1,237.52 million in 2002-03. The remittances from the US witnessed a decrease in 2003-04 when they came down to $1,225.09 million.

Official data reveals that home remittances from Japan, the UK, the UAE, Saudi Arabia, Kuwait and other countries decreased in 2003-04 as compared to the figures for the previous year, i.e. 2002-03.

On being asked the reason for the decrease in remittances from overseas Pakistanis, the minister of state for overseas Pakistanis, Senator Tariq Azeem, said the remittances fluctuate due to a number of reasons, including the rate of return on investments and repatriation of some of the work force to Pakistan after 9/11. He added, "The decrease in remittances seems to be temporary."

In response to a question whether the remittances were decreasing as people had once again started using the "Hundi/Hawala" system instead of official channels, the minister said this was not the case as country-wide emigration data showed that the number of Pakistanis who went abroad for employment during 2004 decreased by almost 50,000 people to 159,852 as compared to the figure of 214,039 in 2003.

Senator Baig said the decrease was due to a number of restrictions placed by Middle Eastern countries on the employment of Pakistani work force.