Pakistan is increasingly relying on home remittances — now making up 9.3 per cent of GDP — which have proven to be one of the main drivers behind the recently attained, hard-earned economic stability. The authorities are upbeat about this and take it as a pinnacle of the economy. However, this is a dangerous path, as while remittances are healthy and can serve as a good stopgap measure, the real solution to our balance-of-payments worries is to build a portfolio of foreign direct investment (FDI).
Remittances cannot replace FDI and are not enough to kick-start industrialisation in the country. They fuel consumption in an economy that is already overly dependent on imports.
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