Minister for Information and Broadcasting Ch Fawad Hussain on Thursday night shared three good news including the finalisation of all legal arrangements for the provision of $3 billion deposits from Saudi Arabia within this ongoing week.
He tweeted that there was three good news as the Petroleum Dealers Association called off their strike and second Saudi Arabia announced to kick-start direct flights from Pakistan and thirdly all legal arrangements finalised for $3 billion deposits from Saudi Arabia. This amount in shape deposits would be released during the ongoing week.
At a time when the country’s foreign exchange reserves were on the decline, this Saudi facility in the shape of $3 billion deposits would help the State Bank of Pakistan (SBP) shore up its dwindling foreign exchange reserves. “The SBP has finalised all arrangements and now everything is in place and the agreed deposits amount will be received within next couple of days,” top official sources confirmed while talking to The News here on Thursday night.
Saudi Arabia will charge around 3.2 to 3.5 percent markup on annual basis for this deposit amount. According to SBP’s announcement on Thursday stating that Pakistan’s total liquid foreign reserves stood at $22.773 billion on November 19, 2021. The break-up of the foreign reserves position shows that foreign reserves held by the State Bank of Pakistan were standing at $16.254 billion and net foreign reserves held by commercial banks were ranging $6.519 billion.
During the week ended on November 19, 2021, the SBP reserves decreased by $691 million to $16.254 billion, mainly due to external debt repayments. The official sources also said that Saudi Arabia also agreed to provide $1.2 billion for the provision of refined POL products and the Economic Affairs Division (EAD) was negotiating on behalf of the government of Pakistan.
When contacted to Muzammil Aslam, spokesperson for Adviser to PM on Finance for seeking his comments, he said that Pakistan was likely to get $7 billion from just three sources during the next 60 days including $3 billion deposits from Saudi Arabia, $1.2 billion Saudi Oil Facility on deferred payments, $800 million oil facility from Islamic Development Bank, $1 billion through the launching of Sukuk bond and $1 billion from the IMF. All such dollar inflows would be enough to ward off pressures on existing import bills, he added.
Our correspondent adds: Meanwhile, Prime Minister Imran Khan said that the biggest problem of Pakistan is that no attention has ever been paid to exports, whereas our exports were equal to Hong Kong’s in 1960s.
He was addressing the inaugural function of the Sohni Dharti Remittance Programme for overseas Pakistanis here. “Nowadays where stand our exports while that of Hong Kong’s are dollars perhaps over dollars 300 billion,” he maintained.
He urged his economic team to make it easier for overseas Pakistanis to do business in Pakistan and provide more incentives for them and pointed out that “this year our exports would be at the highest level but still where are the other economies that were running with us 50-60 years ago and where is Pakistan.”
The prime minister said that the disadvantage of Pakistan not paying attention to exports was that as our economy grows, so do our imports and the pressure on our current account increases, which is why Pakistan has approached the IMF 20 times.
He explained “Pakistan needed the IMF because we have a shortage of dollars, the rupee is under pressure and the national treasury is depleted and we are stuck in the same cycle. The only way out of this is to increase exports, for which the government is doing its best, but our exports will increase only when our industry develops.” The prime minister said, “We have emphasised on industries and despite the coronavirus, large scale manufacturing has increased and is moving in a positive direction.” However, he made it clear that unless our exports grow and unfortunately imports are high, the only way we can solve this gap is through remittances from our overseas Pakistanis.
He said that on the one hand there is foreign investment but now they (overseas Pakistanis) have helped our government in difficult times: overseas Pakistanis are our asset. The premier praised the Sohni Dharti project and said that SBP has tried offer benefit overseas Pakistanis to send their money through banking channel, via the new programme Sohni Dharti and emphasised, “We should have done this programme long ago. Unfortunately, we are doing it three years late. We should have started this programme as soon as we came into government.”
He said that overseas Pakistanis can also buy houses and build properties through Roshan Digital, noting Pakistanis living abroad mostly invest in real estate or plots. They try to make their home in Pakistan by earning money abroad. That is why property is the most lucrative business.
PM Imran said that the overseas Pakistanis can buy plots directly through Roshan Digital and thus they will avoid being deceived by spending on fake schemes. “We will bring more schemes to overseas Pakistanis and if they spend on real estate then we will also give them tax exemption,” he contended.
The prime minister congratulated Finance Advisor Shaukat Tarin and Governor SBP Reza Baqir and urged them to make it easier for overseas Pakistanis to get involved in business and create more beneficial programmes for them.