When illegal routes rule

Remittances sent home by overseas Pakistani workers and diaspora have the potential to increase to up to $50 billion if the money transfers through the illegal Hawala/Hundi operations are plugged. The money transfer market operators estimate the illicit global remittance trade size to be up to 80 per cent of the legitimate transactions of $700bn. “It means the actual global remittance market is almost twice the size of the legal trade. It also means that the illicit remittance trade is an international phenomenon, making it difficult for a single country to tackle in its entirety. The same is the case with Pakistan,” argues Naqqash Hafiz, the executive head of Ace Money Transfer — a company based in England. Remittances rose dramatically by over 35pc from $23.1bn in FY20 to a peak of $31.3bn in FY22. However, the ongoing fiscal year has seen a big drop, with the country losing $3.7bn in remittances in the first 11 months to May. The inflows have tumbled by almost 13pc to $24.8bn from $28.5bn a year ago.