Export of manpower has brought it the welcome buoy of remittances that supports it balance of payments. Ramazan led the quantum of remittances to increase to nearly $3bn in March, its highest level since April 2022 and more than twice the amount of Pakistan’s top export of textiles. However, changes in host countries of the bulk of Pakistan’s immigrants have not been kind in recent years.
Take Saudi Arabia’s futuristic $500bn Neom City project, for instance. Media reports suggested that Pakistan would have provided a workforce for it; there were some plans for a special quota for skilled and semi-skilled workers and a proposal for a local state-of-the-art skill university to train them. But the project has been massively scaled back. Citing sources, Bloomberg reports that only 2.4km of the 170km city is to be completed by 2030.
The Russia-Ukraine war spiked energy prices, the repercussions of which Pakistan is still facing in the aftermath of the exchange rate spiralling up. The Middle East crisis can wreak similar havoc, though it has not significantly affected the economy as yet. Since it is the US election year, back-channel dealings may have de-escalated tensions between Israel and Iran to keep fuel prices down.
Pakistan is one of the top ten recipient of remittances in the world.
However, keeping brain drain aside, the number of people leaving Pakistan has decelerated in recent years. Not because people are eager to remain in the country, but because the world is no longer in need of massive imports of manual labour.
Published in Dawn, The Business and Finance Weekly, April 22nd, 2024