In December 2015, a World Bank report published by the Wall Street Journal left many in India alarmed.
The report released revealed that Pakistanis sent $4.67 billion in 2012, $4.79 billion in 2013 and $4.90 billion to India in 2014 – figures that were increasingly going up each year.
It was staggering for two reasons: one, the amount makes Pakistan the fourth largest source of remittances for India, and, two, they are increasing despite stringent restrictions on direct remittances.
So how is this even happening?
In a report published on February 25, the WSJ quotes economist Dilip Ratha, manager of World Bank’s migration and remittances development prospects group, saying that the money flow is between family and friends in the two countries.
Ratha’s logic is based on the fact that there are around 1.4 million India-born people living in Pakistan and 1.1 million Pakistan-born people in India.
Yet the figure is not just astounding but also alarming because it is higher than the remittances India receives from its increasingly growing migrant labour force in Kuwait and Qatar.
Indian commentators on the WSJ were obviously suspicious. They raised a flag and also questioned how the World Bank reached such a figure.
The World Bank stated that Pakistan receives remittances amounting to $2 billion from India. The figure is less than half of what India receives and can be supported by the fact that many Pakistani celebrities are working in the Indian entertainment industry – a major money spinner.
The question therefore remains as is: How is the money flowing in? Ratha himself said that the friends and family logic is World Bank’s best guess. So it is just a guess, at the end of the day.
The WSJ reports that money transfer might be happening through the hawala route or in the most informal manner of a friend carrying cash to another in India. While the latter is a suggestion that holds no basis, the former is a cause of alarm.
Hawala is the route sponsors of terrorism take to finance their nefarious activities in other countries.
One must note here that money coming from Pakistan can be used to finance terror in India, and that is not an exaggeration. Pakistan is also the source of fake currency flooding Indian markets.
Osama bin Laden had established a hawala network in Pakistan, Dubai and throughout the Middle East for transfer of funds.
Sanchita Bhattacharya did an extensive research on how Pakistan’s weak economic situation and loopholes in security enables terror sponsors to use hawala, ransom, narco trade and dubious charitable organisations as routes of money transfer.
In June 2013 the Financial Action Task Force (FATF) said that Pakistan was one of the 12 countries that failed to make sufficient progress in preventing money laundering and terrorist financing.
Obviously, India NEEDS to be concerned about the increasing money flow from Pakistan.