Pakistan’s Minister of State for Finance Dr. Ayesha Ghospasha said on Friday that the government is considering a proposed scheme to bring dollars from overseas Pakistanis, but no final decision has been taken yet.
Malik Bustan, head of Currency Exchange Dealers Association, while attending a meeting of the Standing Committee on Finance, offered schemes to collect $24 billion from overseas Pakistanis and three to four billion dollars from within Pakistan.
On this presentation, Dr. Ayesha further said that ‘Dollars amnesty scheme is unworkable, under the IMF program, the government cannot issue such amnesty to declare dollars within the country.’
Regarding this proposed scheme of Malik Bustan, a former governor of State Bank said on the condition of anonymity that ‘there can be different formulas for taking dollars from overseas Pakistanis, dollars hedging and swap arrangements are considered to be more successful among them. ‘
He said that the dollar swap scheme seems to be unworkable in the present conditions of Pakistan.
The IMF may object to this, the value of the dollar has increased by 40% in Pakistan in the last two years, this scheme may be more dangerous for the government, overseas Pakistanis will not be much interested in this scheme. There is economic and political uncertainty in Pakistan, in countries where such schemes have been successful there is political stability.
What was the scheme?
Malik Bustan, chairman of Pakistan Forex Exchange Association, while talking to Independent Urdu said that a similar scheme was introduced in 1998 as well.
After the nuclear explosions, economic sanctions were imposed on Pakistan and Pakistan’s foreign exchange reserves were 400 million dollars, the government was offered a dollar swap scheme, providing 10 billion dollars.
Malik Bostan further said that under the dollar exchange scheme, one billion dollars can be provided to the government per month and 24 billion dollars can be provided in the next two years.
“As soon as the government approves, we will start receiving dollars from overseas Pakistanis and Pakistan will come out of this crisis.”
Malik Bostan said that ‘State Bank will be the guarantor of this scheme. Commercial banks will receive these dollars and open specific accounts to receive the funds.
“An agreement will be made with overseas Pakistanis and the banks will be obliged to pay the additional dollar difference after two years.”
“The biggest advantage is that the government doesn’t have to pay the dollar back, just the extra difference.”
Malik Bustan said that this scheme is being implemented earlier. Turkey has also worked on the same model, which increased its foreign exchange reserves and strengthened the currency.
Malik Bustan said that at present they are providing 400 million dollars per month to the government. However, after the coming of this scheme, one to one and a half billion dollars can be given to the government every month.
This section contains related reference points (Related Nodes field).
“One and a half million Pakistanis live abroad, if they give even two hundred dollars, three billion dollars can be collected, but we have set a target of one billion dollars per month.”
“Pakistanis will give three to four billion dollars per month”
Malik Bustan claimed that three to four billion dollars can be collected from within Pakistan as well.
“For this, the government should eliminate the condition of presenting an identity card to the customers, the identity card should not be required for those who bring less than 15 thousand dollars.”
Malik Bustan said that this matter has been discussed with FATF and IMF.
The FATF condition applies to amounts in excess of $15,000. A thorough customer vetting will be ensured.
He said that there is a lot of money in Pakistan but people are scared, they need to be encouraged that their money will not go anywhere.