“We would have a crisis situation as the country may have moved towards bankruptcy just like Sri Lanka,” these are the words of Salman Siddiqui, a senior Journalist. The Roshan Digital Account(s) programme has helped Pakistan in streamlining remittance which eventually helped Pakistani economy”.
The programme was launched in September 2020.
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What happened in Sri Lanka?
The COVID-19 pandemic struck months later, wiping away most of Sri Lanka’s revenue, particularly from the lucrative tourism business. Over the same era, remittances from citizens working abroad fell, exacerbated by an inflexible foreign currency rate.
Concerned about the government’s finances and ability to repay significant foreign debt, rating agencies cut Sri Lanka’s credit ratings beginning in 2020. It resulted in effectively shutting the country out of international financial markets.
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Role of Government:
Despite the increasingly deteriorating economic situation, the Rajapaksa government first refused to engage in discussions with the IMF.
Opposition leaders and financial experts have encouraged the government to act for months, but it has remained silent, expecting for a rebound in tourism and remittances. Obviously there was an absence of any initiative like Roshan Digital Account.
After realizing the gravity of the situation, the administration sought assistance from countries such as India and China, regional superpowers that have long vied for control over the strategically positioned island.
New Delhi claims to have donated over $3.5 billion in assistance this year.
President Rajapaksa had previously urged China to restructure repayments on a $3.5 billion loan owing to Beijing, which had also provided Sri Lanka with a $1.5 billion yuan-denominated swap in late 2021.
Last month, Sri Lanka finally began talks with the IMF.
Despite international assistance, fuel shortages have resulted in long lines at gas stations, frequent blackouts, and a shortage of some critical medicines.
Any initiative similar to Pakistan’s Roshan Digital Account may have let Sri Lanka pool some reasonable foreign exchange as an alternate source to the existing streams of the country.
PTI delivered it’s Promise via Roshan Digital Account:
The PTI followed through on its promise to build financial instruments to encourage investment from Pakistanis living abroad, with the Roshan Digital Accounts (RDAs) being its most notable achievement.
How Roshan Digital Account(s) have helped Pakistan?
RDAs have aided remittance inflows and provided significant support for Pakistan’s overall foreign exchange reserves. Overseas employees have been allowed to invest in Naya Pakistan Certificates, real estate, and the Pakistan Stock Exchange through RDAs. Hence greatly expanding their contribution to the local economy.
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