The country’s unaccounted foreign exchange inflows through the hundi and hawala network have declined sharply as the prolonged Gulf war disrupted Dubai’s informal trading business, hurting small exporters and domestic manufacturers.
Sources in the financial sector said that hundreds of flights every year carried people with goods not registered in the official export lists to Dubai. These people are commonly known as “khapiya”. The Gulf war, which lasted about five months, crippled this business and also dealt a blow to the domestic manufacturing sector.
“We have been preparing embroidery products for years, which were exported to the Dubai market. Now the market is closed and no buyers are available across the Gulf states,” said a manufacturer.
He added that his factory is now producing only for the domestic market, which accounts for just 10 per cent of last year’s production.
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