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Pakistan saw foreign remittances reach a record $ 8.9 billion in fiscal year 2010, an increase of 14 percent compared to the 2009 fiscal year despite the global economic crisis. A World Bank report released on July 30 this year found that “high levels of remittances, both foreign and domestic, seem to have facilitated” the decline in poverty in the country. Moreover, “The continued strong growth in workers remittances in the past few years has also contributed to improvements in the external current account balance” and “has facilitated improvement in the country’s external position”.
Our special feature this month tends to cover the procedures and systems through which foreign remittances flow in Pakistan and focuses on the different aspects through which the distribution of these remittances can become easy and accessible.
Apart from contributing significantly to the national economy, remittances are a steady source of income for households across Pakistan. A recent Asian Development Bank study found that foreign remittances constituted 9.4 percent of household income in Khyber Pakhtunkhwa, 5.1% for Punjab, 1.5% for Balochistan, and 0.7% for Sindh.
Under such circumstances where a considerable percentage of families relies completely on remittances sent to them by their family member (s) on a monthly basis, a quick and affective procedure needs to be in place so that the monthly flow and receipt of money is not disturbed. Moreover, in the wake of recent flood crisis in Pakistan, which ravaged one-fifth of the country leaving behind two million people homeless and causing considerable damage to major infrastructure, livestock and agriculture, there is a growing need to facilitate migrants who send additional remittances to help their families and friends in need.
It is likely that the Pakistani Diaspora will send additional financial resources to help their family, friends and even larger communities. And while these person-to-person transfers could complement official aid efforts, what Pakistan needs to focus on right now is proper and easy transfer of the money, especially in a scenario where major infrastructure (including banks) has been damaged.
Traditionally, remittance money is funneled into the country via banks and money exchange agencies. This money then finds its way either through direct hand over or in most cases through Pakistan post offices, to reach far and wide across the country. Millions of rupees flow through Pakistan Post’s remittance service every month, and surprisingly is considered safe and affordable. Living in an era where many discard postal services as slow and ineffective, the concept of Urgent Money Service (UMS) and Fax Money Order (FMO) at Pakistan Post sounds unrealistic. But it holds true. Moreover, the concept of postmen using traditional routes and modes of transport to deliver money at the doorsteps in areas far and wide is another proof of this system which seems to have kept a monopoly over money orders in Pakistan, and where very few have been able to intervene.
There is a need for other players to tap on this potential but unexplored service market and help Pakistan receive remittances across the country through reliable, cost affective and quick systems.
Private courier companies have been offering their services in Pakistan for many years. In fact courier services within the country are so productive that the sector has virtually left conventional mail service way behind. From transfer of official documents and valuable gifts to letters and parcels, courier services offer their services in quite an efficient and timely manner. It would therefore be logical for the courier services to enter the remittance market. With their established goodwill with customers and a reliable tracking system, couriers can revamp the concept of money transfers at the doorstep! 
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