Pakistan receives about USD 1 bn per month in remittances from NRP and I was wondering what happens to it. This regular injection keeps the wheels of the economy moving and I'm sure most of it is spend on basic needs.

I just wished to know if it is fuelling a construction or investment boon is some parts.

http://www.dawn.com/2011/12/02/wb-report-pakistan-among-top-10-recipients-of-remittances.html

No economists here?

Most of that goes to the retirement funds of Zardari and Gillani...

...dude its simple. The dollars is converted into rupees and used by family members there. This occurs by the dollars being kept in the national reserve or in the banks, which then allows the government to print the rupees (though buying bonds) and abstain from increasing inflation and using the dollars for payments of imports. So in essence the dollars allow printing of rupees by the central bank .Simple economics. Economists here, correct me if im wrong. I want to learn

What kind of a ridiculous question is this? The money is sent to relatives not the government you know. The actual dollars end up in foreign reserves when they're converted to rupees.

Maybe I wasnt clear. Obviously when families have those rupees in hand, I wanted to know if they were spurring on booms in particular regions.

...of course they are. These remittances for many families allows them to climb the social ladder or atleast purchase basic necessities (read the news on how NESTLE and Unilever, among many companies, cant seem to fulfill the demand of the climing rural class due to remittances and higher prices of crops). So this in essence increases their purchasing power and allows corporations to make greater investments (through job creations in the country by setting up factories or hiring workers for other tasks) and increase competition among local industries, too. When these corps make profits then the equity market posts gain (but lets not forget speculators in Pakistan really fcuk up alotta shit when it comes to equity and currency trade) and these corps can grow through borrowing more from the local banks, which in turns allows the banks to make greater profit and lend more, or issuing stocks.

So yes, everything from manufacturing to production to minting money and borrowing money is impacted.

The reason the economy isn't exactly on a footing level today is due to:
A) Natural disasters in the past two years.
B) Inflation in 2008 due to the sudden oil crisis
C) Weakening of the rupee due to a great decline in the reserve and due to the "Speculators" during the period. The rupee is still weakening despite the fact the current account deficit has decreased substantially.
D) Higher cost of borrowing for companies--which is sustained only due to inflation.
E) Political atmosphere.
F) MOST IMPORTANTLY, TERRORISM, AND DECLINE IN FDI AND LOCAL INVESTMENTS.

A lot of real estate is bought thru remittances

Anyone hot at maths here wish to take a guess at the total economic benefit derived from remittances thru the multiplier effect?

I have HS economics only and simply cant do such sums.

bro, look up last year's or this year's HDI. The report especially focused on remittances and development of third world countries and its multiplier effect :cheers:. Now relax. Or try wikipedia...it helps

Big giant kothis are usually owned by the families of expats

remittances are now like $14bn.

the dollars replace the rupees, just this

What kind of a ridiculous question is this? The money is sent to relatives not the government you know. The actual dollars end up in foreign reserves when they're converted to rupees.

Sahi kaha......How many MP members who are living abroad sends money to govt....my brother too live abroad but I don't think he gives money to zardari :nuts:

Sahi kaha......How many MP members who are living abroad sends money to govt....my brother too live abroad but I don't think he gives money to zardari :nuts:

:lol:

Remittances will climb even higher this year.

http://www.pakistantoday.com.pk/2013/03/12/news/profit/remittances-swell-to-9-23-billion-in-first-8-months/

May hit 14-15 bn this year.

http://www.pakistantoday.com.pk/2012/11/17/city/karachi/foreign-remittances-to-hit-record-in-fy-13-finance-ministry/

yaar it gets converted into pakistan rupees common sense

With the economy down and no power, there are no business opportunities anymore like there were during the mush era where the money was used to invest in real estate, stock market and build businesses, now with all businesses going bust and income really low with inflation most of the remittances are used for people to run there daily lives.

No need of this separate thread, MODs plz merge this thread with "Economic Progress"...

from yesterday:


7.5% Increase



http://epaper.dawn.com/2013/03/12/stories/12_03_2013_009_004.jpg

$ converted to Rs. Families use Rs for easy load and Govt. use $ to import Lexus and petrol.

All I know is that no one is sending ME $1b/month

There is further growth of about 7.5%.

http://tribune.com.pk/story/519319/remittances-grow-7-5-in-first-eight-months-of-fiscal-2013/

About $1.25 bn per month. Real lifeline for Pak.

Should pass 15 bn this fiscal yr.

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/internationbusiness/2013/May/internationbusiness_May29.xml&section=internationbusiness