Overseas Pakistanis are a key source of revenue for the national economy. Remittances sent from overseas Pakistanis not only provide stability to the country’s foreign exchange reserves, but also help in attracting Foreign Direct Investments (FDI). Currently, there are nine million overseas Pakistanis in different countries, with the majority settled in the Gulf region, UAE, Saudi Arabia, and western countries like the UK and USA.
Majority of overseas Pakistanis have migrated to different countries to earn a decent living and support their families back home. Since the 1980s, millions of Pakistani workers have shifted to Middle Eastern countries to earn a living. Today, Pakistanis are one of the largest diasporas residing in the Middle East. These overseas Pakistanis have friends and families in their hometowns and villages in Pakistan, to which they send their remittances.
The latest figures from the State Bank of Pakistan (SBP) show that 8 billion USD worth of remittances had been sent during the first quarter of the current fiscal year, posting a growth of 12.5% over the same period last year. Moreover, 50% of these remittances are invested in Pakistan’s real estate sector. This is because real estate in Pakistan is considered a relatively safe investment avenue compared to others like stocks, bonds, and securities. However, overseas Pakistanis and their real estate investments have met fraudulent ends, corruption, and other malpractices. Many overseas Pakistanis have reported that their commercial or residential real estate investments have been captured by land-grabbing mafias prevalent in the real estate sector of Pakistan. It is a struggle for overseas Pakistanis to file lawsuits and actively fight their cases in Pakistani courts against the land grabbers.
Besides land mafias, several commercial banks and property dealers have given overseas Pakistani investors a tough time. Documentary pieces of evidence reported by media companies show how fraudulent commercial banks have trapped investments from overseas Pakistanis. According to the reports from the Ministry of Overseas Pakistanis, several ex-pats have been defrauded by banks for decades on the pretext of verification of payments. Overseas Pakistanis have voiced their concerns on several platforms like Pakistan’s Mission Abroad and OP Grievance cell in the Supreme Court of Pakistan. They have demanded the establishment of a regulatory authority for the prevention of such malpractices and frauds.
Currently, 69% of all housing societies in Pakistan are illegal. Their primary customer is the overseas Pakistani that struggles to verify the authenticity of their products. Considering the plight of overseas Pakistanis and their investments that meet dead ends in Pakistan, the incumbent government has initiated a major crackdown against illegal housing societies selling to overseas Pakistanis. The government has also introduced several platforms to streamline the process of sending remittances to Pakistan. The Roshan Digital Accounts (RDA) and the Roshan Apna Ghar (RAG) scheme are two major initiatives of the government to draw potential investments from the nine million overseas Pakistanis living abroad.
The RDA is a banking facility for Non-resident Pakistanis (NRPs) that provide access to banking services within Pakistan without the need to visit a consulate, embassy or physical bank branch. The RAG is the latest initiative of the government that aims to provide authentic residential real estate investment options to NRPs. The objective of these two schemes is to facilitate overseas Pakistanis to invest their money safely and securely in their homeland.
The State Bank of Pakistan (SBP) has acted as a regulator in this area. According to SBP Governor Reza Baqir, increasing investments from overseas Pakistanis in the form of remittances will not only benefit the specific sector but also improve Pakistan’s standing on the Ease of Doing Business Index (EODB). Presently, there is no real estate regulatory authority in Pakistan, and the SBP has filled that role in several ways. The SBP acts as the primary regulator for RDA and RAG and continues to facilitate overseas Pakistanis to make secure investments in Pakistan.
The overseas Pakistanis are an important source of investment for Pakistan’s economy in general and the real estate sector in particular. The government needs to place appropriate measures to facilitate overseas Pakistanis to secure their investments without the fear of fraud or corruption.