Reality of Remittance and Black Money

[TeslaCoil]

You might be wondering why our exports are increasing on weight basis BUT not in monetary value?. What special Pakistanis are doing in Foreign countries that they could send 23 Billion USD?. I worked in UAE for a long time and my salary was also very high, like many of us I used to remit money on monthly basis to my family in Pakistan. As me and my classmate from India wanted to write a paper on this issue (as they have same problem), but now we both are doing job again and have no time. As a member I wanted to share some insights and shocking figures of black money

We took UAE example as we could easily gather data set. State bank has more clarity of data from UAE. Secondly I used optimistic average figure of monthly remittance (20% higher than avg.). Remittance for buying goods and property is given separately

The black money mainly comprises of

• Industrialist through under invoicing
• Exporters and Importers through under and over invoicing
• Civil Servants corruption money
• All other companies avoiding tax

Pakistani population in UAE		1,250,000​	Avg. Remit	Sub-total Remit money
%age of Pakistanis remittance	60%	750,000​	$ -
Blue colored Pakistani	80%	600,000​	$1,500.00​	900,000,000​
White colored Pakistanis	20%	150,000​	$7,000.00​	1,050,000,000​
Money for other investments				350,000,000​
Money from Pakistan to UAE (through official channels)				-460,000,000​
				1,840,000,000​
This tells only 21% is the real remittance
2019 Remittances	Billion USD Remittance	Real remittance	Black money %	Total Black Money billion USD
UAE	4.6	40%​	60%​	2.76
Saudi Arabia	5			3.00
USA	3.4			2.04
UK	3.4			2.04
Malaysia	1.5			0.90

Results:

• This shows us that 60% of the remittance received is the black money coming back to Pakistan (not earned or sent by expats)
• I wanted to show to some of our intellectuals that the economic effect of Pakistani labor in Gulf is not that high as shown us.
• This will answer why judges, politicians, establishment etc. are so reluctant in taking any action against this
• Our exports are much higher compared to what the officials show you because they are unable to tackle this issue as they are involved in this scam

The Hundi hawala system in Pakistan is estimated around 21 billion USD (by State Bank officials). So you can imagine that we could easily be a much bigger economy by just streamlining this and hundi system as you can show the higher export and less import.
There is a China FDI scam also, but I will leave that for some other day. Where through under invoicing money is China coming to us through fake Chinese companies under the name of FDI (under CPEC), so next time when you hear FDI , google those companies and ask officials the details of these remittances and who is receiving them

 

[Abdullah9]

shukria chaddi dhari bhai.

 

[Galaxy]

No dought the industrialist are big crooks.

 

[Has]

205 Million and 208 Million needs to multiplied by 12 to come to an yearly remittance value from UAE. How is this calculation done, can’t understand.

 

[Qutubddin Aibak Qazilbash]

Every single memon in Karachi is involved in hundi in one form or another. Their method of ancient hundee goes back 500 years when the seths in Gujarat used to indemnify and act as bankers for exports going as far as Uzbekistan from India....even the terminology is derived from their vernacular.
Entire Afghanistan imports is conducted through hundee dollars ( converted PKR)...no wonder the currency of a wreched , cursed , land locked , resourceless country like Afghanistan could have never been better , atleast more than Pakistan.
Even a non finance person like me , knows I would make more money by using hundee and dollarising my inflows. And all of that money comes through hundee.
Countries don't change by changing cotton underwear and bed sheets.