Tough for overseas Pakistanis to provide $1,000 each for dams

ISLAMABAD: Pakistanis living abroad are estimated to possess potential income of $50 billion out of which $20 billion sent back in shape of remittances on annual basis, however, it will be hard for all nine million overseas workers to provide $1000 as charity for construction of dams and also invest in upcoming Pakistani Diaspora bond simultaneously. Pakistan requires over $14.6 billion for construction of Diamer Basha dam and it cannot be built through charity or donations alone. There is need to un-bundle this project whereby construction of water reservoir should be done with domestic available resources and consortium of multilateral and bilateral creditors should be established to manage financing while installation of power generation should be done in second phase through investment from potential domestic and international investors through competitive bidding process and it should be built on BOT basis (built-operate and transfer). It will not be advisable to ask overseas Pakistanis for too much so the PTI led government should priorities that what kind of support they required on immediate basis in a bid to lure fan club of Imran Khan having disposable income and living abroad and they genuinely want to help Pakistan to overcome its economic morass.

“We need to exploit this situation very carefully because when we will ask for too much it will become harder for them to fulfill our requirements in accordance with our desire”, said the official.

Prime Minister Imran Khan has sought donations from overseas Pakistanis so effort was made to get hard cash in dollars as it will help Islamabad to meet its requirement of dollar inflows and can also help generating funding for dams. “Maximum, this campaign may fetch up to $1 billion but it is hard to guess on this account at this moment,” said the official and added that the fiasco of Atif Mian for unceremonial removal from the Economic Advisory Council (EAC) would have caused negative impact among Pakistani diaspora living abroad who are educated and pro PTI segments.

There are no exact estimates available on potential of total remittances of overseas Pakistanis as IMF did a report in 2008 and termed as paradox because there were other parts of income such as export proceeds and corruption which were channeled through remittances to make it part of legal channel. However, rough estimates suggest overseas Pakistanis possessed potential of $49-$50 billion earning on annual basis and $20 billion were sent back through legal official channels.

The PTI supporters argued that there was difference between charity money sought for construction of dams and investment into upcoming bond as the Finance Ministry was working to firm up such a proposal which would attract interest of overseas Pakistanis and they would prefer to invest their savings into Pakistan instead of lying into foreign banks having no attractive profits offered from them.

Earlier, on the directives of Supreme Court of Pakistan, the Implementation Committee on Diamer-Basha and Mohammad Dam (ICDBMD) asked for providing uninterrupted funding for mega projects and in case of any shortfall it may be recovered from federal divisible pool under NFC Award through which the resources were distributed among the Center and provinces.

The ICDBMD asks for appropriate legislation might be made for adequate water pricing mechanism to meet development needs of water infrastructure.

In another important recommendation, the ICDBMD asks for allowing National Electric Power Regulatory Authority (Nepra) for recovery of cost attributable to power generation in both projects from electricity consumers. To meet foreign exchange requirements of the projects, Wapda may explore international financial and capital markets in Far East, Europe and USA to tap commercial loans (syndicated or asset backed) and bond avenues.