Govt to create legal channels for remittances for overseas Pakistanis: PM Khan

Addressing the Pakistani diaspora here in the Malaysian capital on Thursday, Khan said his government has a strategy to pull the country out of its "quagmire of loans".

He said the government wants to create legal channels for overseas Pakistanis to send their remittances through. He said that the finance minister Asad Umar was working on an incentive programme to make routing of remittances easier.

"Currently, we receive USD 20 billion in remittances," he said. "We (the government) think that if all the money sent in remittances [is sent via legal channels], then we will receive at least USD 10-12 billion n addition.

"Right now, we are facing a shortfall of USD 12 billion. If we start receiving all our remittances [through legal channels] then this problem will be solved," Khan, who has got aid from close allies like Saudi Arabia and China to overcome the financial difficulties faced by his government.

Khan said he was determined to drag the country out of the economic mess was ending the practice of money laundering. He said that Rs 10 billion was sent abroad through money laundering every year but assured that every agency in Pakistan is now working diligently to make it hard for people to move funds abroad illegally.

"We have signed MoUs (Memorandums of Understanding) with different countries," he said.

"And gradually, we are also getting details of the money that has been sent abroad illegally," he was quoted as saying by Dawn newspaper.

Khan, who met Malaysian Prime Minister Mahathir Mohamad, during his two-day official visit, said his government was committed to uplift the living standard of the poor by improving governance and ending corruption.

The first step towards ridding the country of its chronic loan dependency is to increase exports, said Khan.

"If Malaysia, with a population of 30 million people, has exports worth USD 220 billion, and we, with a population of 201 million people have exports worth USD 24bn, then clearly we are doing something wrong," he said.

Khan also emphasised the importance of attracting investments, particularly from foreign businesses. "We will continue to face a shortfall of dollars if we do not attract foreign investments," he warned.

He vowed to facilitate investments from overseas Pakistanis by fixing the governance system in the country. He also promised to create an "ease of doing business" for investors — both foreign and domestic.

"There will be a designated office within the PM Office and its sole purpose will be to solve any problems being faced by investors," he said.

Khan said that the recent aid packages secured by his government from "friendly countries" was just a temporary solution to Pakistan's economic woes.

"We have acquired loans from friendly countries in order to repay instalments of loans that were borrowed earlier," he said.

"Even now we are trying that we have to borrow the least amount of money possible from the IMF (International Monetary Fund), with whom we are in negotiations right now. But this is temporary. This is like treating cancer with Disprin," Khan added.

The IMF delegation, which concluded discussions with senior Pakistani officials on Tuesday said, "productive discussions" were held on economic policies and reforms that could be supported by a financial arrangement with the global lender.

There has been broad agreement on the need for a comprehensive agenda of reforms and policy actions aimed at reducing the fiscal and current account deficits, bolstering international reserves, enhancing governance and transparency and laying the foundations for a sustainable job-creating growth path, it said.