Buna-Raast connectivity project will make remittances more convenient, says PM Shehbaz

Prime Minister Shehbaz on Thursday said that he would announce a five-year economic programme in the coming weeks.

Speaking at the Buna-Raast connectivity project, the Prime Minister emphasised that the ‘home-grown economic programme’ envisions strategies to revitalise the economy by improving agriculture, information technology, and unlocking other untapped sectors.

“Recently, we have been able to finalise its broad parameters. By next week or so, we will finalise it. I will go to the people to announce this programme,” the prime minister said.

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Mentioning the Buna-Raast connectivity project, the PM said that the initiative is significant because it is going to expand the reach of Pakistan’s digital payment infrastructure.

“Today our country enters into a new dimension of digital governance by integrating Pakistan into a broader financial ecosystem and formalizing remittance flows,” he said.

The PM said the initiative would further strengthen relations with the Arab world in a modern, digital way.

Under the Buna-Raast connectivity project, the Raast payment mechanism is being linked with the Arab Monetary Fund’s Buna system to facilitate millions of overseas Pakistanis in Arab countries to send remittances through a swift, affordable and effective mechanism.

The PM said the project, which is Pakistan’s first cross-border real-time payment system linkage, will make remittances more affordable and accessible.

Moreover, Prime Minister Shehbaz said the project also had the potential to accelerate the connectivity into a future model of a wider payment system where transactions would take place from region to region with a potential of over $20 billion in annual payments.

Meanwhile, addressing the ceremony, Finance Minister Muhamamad Aurangzeb said the economic policies of the current government are yielding results as more structural changes are on the card.

“Macroeconomic stability is taking roots in Pakistan’s economy,” said Aurangzeb, citing indicators i.e. currency stability, uptick in foreign reserves and improvement in ratings by international institutions.

“Remittance flows is certainly a lifeline for Pakistan. In the last fiscal year, the workers remittances grew by 11% YoY, and that positive trajectory continues into July.”

Pakistan’s remittance inflow at $30.3bn in FY24, up 10.7%

He said that the improvement in remittance flows is a function “of a lot of things which happened not only on the macroeconomic stability side, but also in the context of administrative measures, which were taken to curb the illegal remittance channels and therefore it is now producing results”.

“We must do more to sustain this positive growth trend,” he said.

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Aurangzeb said that despite the administrative measures the informal markets “unfortunately still capture a sizeable share of the remittance flows”.

“Addressing this challenge is a key priority for reducing economic leakages,” he said.

The finance minister said that digitisation reduces these leakages.

“The government intends to end the business of leakages, whether these are leakages in our remittance flows, tax system or in the power sector. But all of this is ultimately about corruption and it’s about people, process and technology,” said Aurangzeb.

The finance minister said the government needs to combine all of these to ensure economic growth.

He said that the Buna-Raast connectivity project, by reducing complexity and cost, provides an attractive alternative to the otherwise informal channels like Hawala and Hundi.