Should we laugh or Cry? Philanthropists are the last hope for Ishaq Dar to collect dollars

• News By : Web Desk
• 2023-02-03 10:16:09

KARACHI: 3 Feb 2023: It appears the government is now looking to rely on the generosity of donors to replace its fast diminishing dollar coffers after exhausted practically all traditional sources of foreign money. But in contrast to the recent drive to raise money for dams, when the government remained in the spotlight, an impending effort to raise free money from overseas will likely be driven by social workers with unwavering credibility and a track record of success. Finance Minister Ishaq Dar requested the central bank governor to work with a group of philanthropists in their effort to raise dollars from overseas Pakistanis in order to alleviate the foreign exchange shortage on Thursday while delivering a speech to a conference on Islamic finance via video link.
KARACHI: It appears the government is now looking to rely on the generosity of donors to replace its fast diminishing dollar coffers after exhausted practically all traditional sources of foreign money. But in contrast to the recent drive to raise money for dams, when the government remained in the spotlight, an impending effort to raise free money from overseas will likely be driven by social workers with unwavering credibility and a track record of success. Finance Minister Ishaq Dar requested the central bank governor to work with a group of philanthropists in their effort to raise dollars from overseas Pakistanis in order to alleviate the foreign exchange shortage on Thursday while delivering a speech to a conference on Islamic finance via video link.In order for firms to create letters of credit (LCs) for imported raw materials, they will be able to use the borrowed money to support "hundreds of thousands of individuals" who have lost their employment. An economist at a research firm who spoke to Dawn on the condition of anonymity said the initiative appeared to be a last-ditch effort to close the external financing deficit and open the door for the conclusion of a letter of intent with the International Monetary Fund (IMF). Negotiations between the government and the IMF are currently taking place to restart the $7 billion loan programme. Due to the prolonged delay in its recovery, the central bank's foreign exchange reserves have been reduced to $3.1 billion, which is insufficient to pay for the nation's import bill of $3.1 billion.
According to the analyst, it will be challenging to borrow significantly on a non-commercial basis because the traditional methods of receiving foreign cash from Pakistanis living abroad—remittances and certificates denominated in dollars—have already started to lose their appeal. In December, remittances totaled $2 billion, a 19% decrease from the prior year. Similar to this, compared to the full-year target of $1.63 billion, foreign inflows via Naya Pakistan Certificates were $190 million in the first half of 2022–23. The total amount of the nation's external debt payments during 2022–2023 was $21 billion. Islamabad will be required to pay or roll over a portion of this debt totaling $8 billion between the months of February and June, with rollovers of up to $3 billion possible.

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