Business Recorder Editorials 11th September 2026

Remittances doing well

EDITORIAL: Remittance inflows rose by 15 percent during July-August 2026 compared to the same period the year before - to 7.3 billion dollars against 6.4 billion dollars, prompting Khurram Schehzad, advisor to the Finance Minister, to maintain that “strong home remittance inflows will help strengthen the country’s external buffers and enhance overall economic resilience.”

The major contributors to a rise in remittances were Saudi Arabia at 873.5 million dollars (12 percent of total), the United Arab Emirates at 749.8 million dollars (10 percent) followed by the United Kingdom at 563.7 million dollars (7.7 percent) and the United States at 308.9 million dollars (4 percent) of the total.

Remittance inflows have been rising since 2020 to reach a high of 41.6 billion dollars in 2025-26 due to what the Economic Survey 2025-26 claimed were the initiatives of government and State Bank of Pakistan (SBP) playing “an important role in sustaining formal inflows. The increased use of digital payment platforms, including RAAST, helped improve transaction speed and transparency, while simplification of the rebate structure for transfer charges reduced costs of remitters and service providers. These measures, together with stable exchange rate environment, encouraged the use of banking and exchange company channels and helped limit diversions toward informal markets.”

However, effective 1 July 2026, the SBP discontinued two government-backed remittance incentive schemes under the International Monetary Fund pressure including: (i) Sohni Dharti remittance programme that allowed a point-based reward system with redeemable points for sending money through official channels; and (ii) telegraphic transfer charges incentive scheme that cost the government 100 to 120 billion rupees per year to reimburse commercial banks and exchange companies from waiving the transfer fee. For the first two months of the suspension of these schemes, remittances have continued to rise; however, there are concerns that in time the remitters from the Gulf States, largely unskilled workers, may revisit their use of the official channels. It is therefore critical for the government and the SBP to be continuously vigilant as to the impact, if any, on the inflows through official channels after withdrawal of these two incentive schemes.

In addition, the ongoing Middle East conflict has legitimately raised concerns that remittance inflows maybe negatively impacted from the Gulf countries. In effect, the SBP has to be alert to any decline in inflows and for the government remain proactively engaged with the Gulf countries to ensure that Pakistani remitters are not affected.

Exports, the other desired source of earning foreign exchange, have unfortunately stagnated at around 29 to 30 billion dollars a year with imports rising, leading to a trade deficit that feeds into the current account deficit. Needless to add, remittances bridge the gap to more sustainable levels. Export proceeds—when there is no under-invoicing by the exporter (an illegal practice whereby the exporter puts a lower price on the invoice than actual)—are not only backed by higher domestic output leading to increased employment opportunities, but may also be ploughed back into the business. Remittance inflows, in contrast, are mainly for consumption purposes; while this raises the standard of living of the recipients, it can drive up inflation.

There is no gainsaying that the demand for unskilled and uneducated labour force will decline in the Gulf countries and that the government must immediately institute an active programme for imparting technical skills to ensure continued presence of semi-skilled and skilled workforce from Pakistan in the Gulf countries.

Given that foreign exchange reserves—strengthened to $17.1 billion largely through external borrowing (as noted on the SBP website on August 28, 2026)—are estimated to be insufficient to meet the minimum IMF requirement of three months of imports, it is critical to ensure that both remittance inflows and exports continue to rise.

Waiting for the water

EDITORIAL: A warning that the Indus has shifted nearly 4.5 kilometres east of Larkana over roughly 35 years and is now threatening a critical section of the flood protection dyke should be enough to trigger emergency action. SUPARCO’s satellite analysis shows sustained channel migration and bank erosion around the Aqil and Moria loop bunds, with approximately 2,000 hectares already eroded along the left bank.

The river has effectively consumed the safety margin that once separated it from crucial flood infrastructure. Yet, once again, evidence of an approaching disaster appears to be moving considerably faster than the machinery responsible for preventing it.

There is little excuse for official surprise. Investigators, scientists, water experts and the media have repeatedly identified the dangers created by encroachment, unplanned construction and interference with natural waterways. The Supreme Court’s Flood Commission examined precisely these problems after the catastrophic floods of 2010, when the Tori Bund breach contributed to devastation across Sindh. Settlements and fish ponds had appeared inside protected areas, natural flood paths had been compromised and the consequences were eventually borne by people whose homes and livelihoods disappeared under water.

Sixteen years later, the underlying governance failure remains disturbingly familiar. Riverine land continues to be occupied, floodplains continue to be built upon and development continues without adequate regard for hydrology or long-term flood risk. Around Hyderabad, land that previously provided a natural riparian buffer has increasingly given way to permanent housing and roads. Such construction leaves floodwater less room to disperse and increases pressure on embankments and settlements when the Indus rises.

The Larkana findings make the danger particularly urgent. Satellite imagery indicates that decades of erosion and sediment deposition have pushed the active river channel towards flood defences. Continued scouring can weaken an embankment even before water overtops it. A structural failure during high flows could therefore leave surrounding communities with dangerously little time to evacuate. This is a measurable physical threat, documented through decades of satellite imagery, rather than some theoretical risk buried in a planning document.

So where is the corresponding urgency from government? Pakistan has developed an unfortunate habit of investigating disasters thoroughly after they occur while showing considerably less enthusiasm for preventing them beforehand. Commissions are constituted, reports are written, recommendations are issued and responsibility gradually disappears into the bureaucracy. Encroachments involving politically connected interests make enforcement still harder, while weak planning and corruption steadily convert natural hazards into man-made catastrophes.

The financial consequences alone should command attention. Billions of rupees worth of homes, agricultural land, infrastructure and economic activity are exposed when flood protection fails. Reconstruction then requires scarce public money, international assistance and years of rehabilitation. The human consequences are immeasurably greater. Families lose homes, crops and businesses; communities are displaced; and lives can be lost because authorities ignored risks that were visible long before the water arrived.

The Sindh government must therefore treat the SUPARCO findings as an emergency planning document. Vulnerable sections of the bund require immediate technical assessment and reinforcement where necessary. Encroachments that obstruct flood flows must be identified and addressed, while settlement and construction inside high-risk floodplains require strict control. Most importantly, the government should publish the findings, its response plan, timelines and subsequent progress so responsibility cannot once again disappear behind departmental files.

The investigators have investigated, the satellites have photographed and the experts have warned. Even the river has supplied ample evidence of where it is heading. The government now has the rare luxury of confronting a potential disaster before it becomes one. Waiting for the Indus to deliver the final warning would amount to negligence of the most unforgivable kind.