ALTHOUGH Raast, the State Bank’s instant payment system, is primarily being linked with Buna, the cross-border payment system owned by the Arab Monetary Fund, to facilitate Pakistanis living in Arab countries to send remittances back home in a safe, cost-effective and transparent environment, the initiative has tremendous potential to connect Pakistan with real-time trans-border payment systems beyond these economies. Once it becomes operational, the Buna-Raast project will significantly enhance inward payment flows from Arab countries to Pakistan, cut the cost of transferring money, help SBP generate more reliable data on remittances from the Buna region, and reduce the burden of ‘subsidy’ of 30 Saudi riyals the government pays on behalf of remitters on every transaction of $100 and above. The government is expecting a considerable increase in remittances from the Middle East where most Pakistanis work once the project linking Pakistan for the first time with any international payment system for real-time cross-border money transfer, becomes operational.

Initially, the initiative will facilitate one-way inward flows but the technology being deployed has the potential to enable the two-way flow of cash at a later stage. Besides, the Buna-Raast connectivity also has the capability to allow a person working in Riyadh or elsewhere in the region to remotely order for food for his family living in Pakistan or pay school fees or house rent, etc, at a nominal or no cost. Buna could link Pakistan with similar payment gateways or switches in Europe, the Far East and elsewhere in the coming years for both inward and outward flows, making it easier for individual remitters, investors and others to send and receive money. At some point, this project might help Pakistan and Buna nations trade with one another in their home currencies if these countries agree. These things seem far-fetched to most Pakistanis. But this is already happening around us; it is just that we are not a part of it.

Published in Dawn, August 24th, 2024