The opening up of Pakistan to foreign companies is having a negative impact on the country’s economy, a leading newspaper said on Thursday. The Nation quoted a report by the State Bank of Pakistan (SBP) as saying that these companies had sent back almost $201 billion as remittances in 2016-17. “This is a lot of money going out of the economy, which is already facing a current deficit of $12 billion,” the daily said in an editorial.”The amount of profit that these companies earn annually has been increasing in the last couple of years. The amount of reverse remittances almost equals the Foreign Direct Investment (FDI) that Pakistan manages to get.
“This outflow has neutralized the impact of the FDI; a result of which is that we have not been able to control falling remittances and the deficit. “Despite an increase of $2.4 billion in FDI in the last fiscal year, the amount is still negligible if you compare it with regional countries like India and China.”The debt increases every fiscal year, and is categorised as one of the biggest economic challenges by the SBP. This is so because the reserves of SBP are falling and are not able to cover the discrepancies.”
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The daily said economists and financial experts had issued several warnings against reverse remittances but no strategy had been devised to deal with the problem. “The result of this is that several companies operate without any scrutiny and get away scot-free after causing damage to the (Pakistani) economy,” it said.