As private capital flows have fallen, the International economists reveal that workers’ remittances have become an increasingly prominent source of external funding for various developing states. They have also revealed that international migrants contribute positively to economic growth in their countries of destination. In fact, foreign workers assist the start-ups of new firms through supplying additional labors to low- and high-skill labor-markets, this is somehow raises the efficiency of business sector in receiving states. Besides, the additional foreign workers the additional human capital accumulation in a state, which generates more economic growth and build-ups infrastructure stock that facilitates trade and doing business. In general, international migrants contribute to economic growth and other development activities and enhance the workforce, besides; they raise the efficiency of economies and assist in the technology transfer in the countries of destination. In the list of developing countries, Pakistan is the second largest manpower/labour exporting country of South Asia.
Bureau of Emigration and Overseas Employment (BE&OE) has recorded more than 11.11 million emigrants for employment abroad. During 2019, the Bureau of Emigration & Overseas Employment has recorded 625,203 for overseas employment as against to 382,439 emigrants in 2018 explaining a rise of 242,764 people as against to the previous year.
Statistics showed that Saudi Arabia (KSA) is the main destination country for Pakistani emigrants where greater than 53 percent of emigrants proceeded, followed by UAE (33.78 percent), Oman (4.54 percent), Qatar (3.09 percent), Malaysia (1.81 percent) and Bahrain (1.31 percent). The raise in manpower export during last year was optimistic in terms of remittances which played a vital role to stabilize the economy and containing the current account deficit in Pakistan.
The comparison among provinces during 2019, the highest number of workers went abroad was 312,439 from Punjab, followed by Khyber Pakhtunkhwa (KPK) 186,176. From Sindh the number of recorded workers grew from 41,551 in 2018 to 57,171 during 2019. In other provinces emigration trend is positive except AJK and Northern Areas where minor fall is observed in 2019 as against to 2018. During 2019, there has been a growing trend in all occupational groups except a minor fall in highly qualified and highly skilled workers in last year. The number of skilled workers grew from 142,486 in 2018 to 285,932 (101 percent) in 2019. Similarly, there was also a rise of 15 percent in semi-skilled and 57 percent raise was observed in unskilled categories during 2019. In 2019 the growing trend was because of the stabilization of Gulf economies and opening up of career job opportunities for Pakistani workers particularly in Saudi Arabia after the recovery of oil prices and diplomatic efforts of the government.
According to the State Bank of Pakistan (SBP), non-resident Pakistanis sent higher remittances mostly from Saudi Arabia, US and UK in October. Remittances from Saudi Arabia surged 15.5 percent to $634.8 million in October 2020 as against to $549.9 million in the corresponding month of previous year. Inflows from the US grew 33 percent to $183.3 million in the month under review as against to $138.1 million in the same month of previous year. Remittances from UK enhanced 17 percent to $278.5 million from $237.3 million, while inflows from the UAE improved to $504.1 million in October 2020 as against to $494.3 million in October 2019.
According to SBP, in Pakistan workers’ remittances grew 14 percent to $2.28 billion in October as against to $2 billion in the corresponding month of last year. Furthermore, the remittances remained flat as against to the month of September. Cumulatively, in the first four months (July-October) of current fiscal year FY2021, the inflows surged a notable 26.57 percent to $9.43 billion compared to $7.45 billion in the corresponding period of last year. Different sources also recorded that receipt of workers’ remittances remains on the higher side as overseas Pakistanis continue to send money by official banking channels because of restricted international travel. Moreover, a number of overseas Pakistanis utilized to bring remittances in the form of hard cash along with them when they visited their families before the Covid-19 outbreak. Besides, the remittances continued to surge with the offer of better rupee-dollar exchange rate to the recipients in the country and increased commission to international and local financial institutions on the transfer of remittances to the country under the central bank’s Pakistan Remittances Initiative (PRI). Sources also recorded that the domestic authorities’ strong check over unlawful transfer of funds to and from Pakistan in an effort to come out of the grey list of Financial Action Task Force (FATF) also assist ramp up remittances by the official channels. Such developments would offer much-needed support for growing the inflow of remittances in future. Any slowdown in the receipt of workers’ remittances would be offset through the Roshan Digital Account (RDA) – which is being opened through overseas Pakistanis in Pakistani banks. RDA will take remittances to unforeseen high levels. So far, statistics explained over 40,000 overseas Pakistanis have opened RDA over the past couple of months.
The experts also estimated that total remittances would be somewhere between $25 billion and $25.5 billion in FY21 as against to $23.10 billion in the previous fiscal year. However, it is also estimated that the full-year remittances at $24 billion. It anticipated that remittances would decline below $2 billion a month in the second half (January-June) of current fiscal year, barring the months falling close to Eid. Earlier, the country received inflows in the range of $1.78-1.9 billion per month in the prior five months – January-May 2020.