Pakistanis living abroad will be able to buy cars for relatives back home and make charitable donations under new digital schemes designed to tap the spending power of expatriates, Imran Khan's government said.
The prime minister said the country's diaspora, which includes about 1.6 million Pakistanis living in the UAE, was a key asset for the country and ministers were looking at innovative ways to harness their wealth.
Under two new schemes, overseas Pakistanis will be able to use newly introduced digital accounts to get financing to buy cars in Pakistan and will be able to donate to charities and the government's flagship social safety net scheme.
"Overseas Pakistanis have, over the years, kept our economy afloat," Mr Khan said after inaugurating the new scheme in the capital Islamabad on Thursday.
“We will innovate and brainstorm to tap overseas Pakistani's remittances,” the former cricketer said.
Mr Khan's ruling Pakistan Tehreeik-e-Insaf (PTI) party last year launched digital bank accounts in an attempt to plug overseas Pakistanis into the nation's banking sector.
Bank officials at the time said they hoped the launch of the Roshan digital account would cut bureaucracy for expats and boost remittance flows into a country perennially short of foreign capital.
Account holders will be able to invest in the stock market, buy government debt and conduct basic banking services, officials said.
Since the launch, about 120,000 accounts were opened from 170 countries and received more than $1 billion in deposits, the government announced.
Faisal Javed Khan, a PTI senator, called the initiative a milestone.
The scheme, he said, was "a testament to faith that non-resident Pakistanis have in Pakistan and the Prime Minister Imran Khan-led government”.
Under the car-financing scheme, account holders will be able to get vehicles “at very attractive terms" for loved ones in Pakistan.
"Banks are offering conventional and Islamic modes of financing at attractive mark-up rates starting from 7 per cent, with priority delivery," the senator said.
Another scheme will streamline donations to charities and allow account holders to pay into Pakistan's Ehsaas welfare programme, which provides cash handouts to the poorest.
Mr Khan, who for years during his cricketing career was himself Pakistan's most high-profile expatriate worker, has often tried to woo the diaspora.
Pakistan's central bank this month announced that monthly remittances exceeded $2 billion for the past 10 months and hit a record $2.7bn in March.
Remittances helped to keep many families afloat while the country is being battered by the economic fallout of the Covid-19 pandemic.
Workers in Saudi Arabia send home the most, followed by those in the UAE, UK and US, bank figures show.
Yet expat workers often complain they are neglected or badly treated by the country's overseas missions.
“Overseas Pakistanis are our asset,” the prime minister said. “Our embassies, sadly, do not appreciate them that way.
“They are very special people for us. They live far from families and work hard day and night. My message to our embassies is to take care of them, of this overseas labour class."
He said he would launch an inquiry into complaints that officials at the embassy in Saudi Arabia had been demanding bribes from workers.
“I am launching a high-power inquiry into the complaints about the Saudi mission and we will give exemplary punishments and we will take strict action,” he said.
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE%20v%20West%20Indies
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
