Friday, December 27, 2019

Over Half Million Pakistanis Migrating Abroad Each Year

Nearly 600,000 Pakistanis have gone overseas for work in the first 11 months of this year, according to figures recently released by Pakistan Bureau of Emigration and Overseas Employment. This phenomenon has helped reduce unemployment in a country where about 2 million young people are entering the job market each year. It has also helped remittances soar nearly 21X since the year 2000.



Emigrants From Pakistan 1990-2019. Source: Pakistan Bureau of Emigration

Migration Overseas:

Over 11 million Pakistanis have left home for employment in Europe, America, Middle East and elsewhere since 1971, according to Pakistan Bureau of Emigration. The pace has particularly picked up over the last 10 years with over half a million Pakistanis migrating abroad each year.  This phenomenon has helped reduce unemployment in a country where about 2 million young people are entering the job market each year.

Emigrants From Pakistan 1971-2019. Source: Pakistan Bureau of Emigration


More Pakistanis have migrated overseas in the last 9 years (2011-2019) than in previous 30 years (1971-2010).  The average figure has been about 500,000 each year since 2011. The highest was 946,571 in 2015 while the lowest was 382,439 in 2018.  These figures do not include Pakistanis who went abroad for education and never returned.


Remittance inflows from Pakistani diaspora have jumped 21-fold from about $1 billion in year 2000 to $21 billion in 2018, according to the World Bank. In terms of GDP, these inflows have soared nearly 7X from about 1% in year 2000 to 6.9% of GDP in 2018.

Composition of Pakistan Emigrants. Infographic Courtesy of Gulf News

Myths About Emigration:

A common myth about emigration is that it is driven by poverty. But the fact is that the poorest and least developed people tend to stay put where they are; they do not migrate. It's only people who have a certain level of income and skills who are more likely to migrate to other countries for better opportunities. This fact has been well-established by multiple studies conducted in Africa.

Here's an except of African Development Bank report on migration:

"Results show that despite increase in the absolute number of migrants, Africa, particularly SubSaharan Africa has one of the lowest rate of emigration in the world .... Poorer countries generally have lower rate of emigration ......Bad socio-economic conditions generally seem to lead to higher rate of emigration by highly skilled individuals. Generally, migration is driven by motives to improve livelihoods with notable evidence on changes in labor market status. Often, self-employed or unemployed émigré ended up in wage employment. The paper outlines policy issues emerging from the migration trend in Africa."

Migration vs Human Development Source: Hein de Haas










Data shows that increased human and economic development is initially associated with increasing emigration. Any form of development in the poorest countries of the world is therefore likely to lead to accelerating emigration. Such findings contradict conventional thinking and force us to radically change our views on migration. Such rethinking can be achieved by learning to see migration as an intrinsic part of broader development processes rather than as a problem to be solved, or the temporary response to development “disequilibria”, according to The Conversation, a US publication.

Migration to Non-English Speaking OECD Nations:

Migration data for 2016 released by Organization for Economic Cooperation and Development, the club of rich industrialized nations of Europe, North America and East Asia, shows that a growing number of Pakistanis are migrating to its non-English Speaking member countries. Traditionally, most Pakistanis migrating to rich industrialized nations have preferred to go to English-Speaking nations. The biggest factor driving such migrations appears to be the growing labor shortages caused by aging populations and declining birth rates in OECD member nations.

Among the biggest non-English Speaking OECD destinations in 2016 for Pakistani migrants are Italy (14,735)  , Germany (12,215), Spain (6,461), South Korea (2,724), Japan (1,486), France (1,350) and Sweden (1.211). 

Pakistani Migration to Non-English Speaking OECD Nations in 2016. Source: OECD


Among English Speaking OECD nations, the top destination for Pakistani migrants continues to be the United States (19,313) followed by Canada (11,335), United Kingdom (11,000) and Australia (6,958). 

Internal Migration:

Internal migration in Pakistan far exceeds external migration. Estimates from the 2014-2015 Labor Force Survey (LFS) indicate that the internal migrant population is roughly four times larger than the emigrant population. This means that some 13% of the Pakistani population is an internal migrant, according to Pakistan Migration Snapshot published in August, 2019.

Like most developing nations, the internal migration in Pakistan is linked to the differences in level of development between urban and rural regions with people moving for better employment and to overcome poverty. Pakistan has also experienced many natural hazards, which have caused numerous waves of internal displacement and internal migration (Sadia et al., 2017; Cibea et al, 2013).

Summary:

Pakistan is in the midst massive migration, both internal and external. Over half a million Pakistanis are migrating overseas while about 2 million are migrating internally from rural to urban areas. These trends are transforming the nation. Overseas remittances are soaring. Pakistan is becoming more urban. The country is also seeing growing foreign cultural influences from both the West and the Middle East.

Related Links:

Haq's Musings

South Asia Investor Review

Pakistan is the 7th Largest Source of Migrants in OECD Nations

Pakistanis Mini-Invasion of China

Inspirational Story of Karachi Rickshaw Driver's Daughters

Pakistan Remittance Soar 21X

Pakistan's Growing Human Capital

Two Million Pakistanis Entering Job Market Every Year

Pakistan Most Urbanized in South Asia

Hindu Population Growth Rate in Pakistan

Do South Asian Slums Offer Hope?


19 comments:

Baradar said...

انشاء اللہ وقت آنے پر بہت سے تجربے کے ساتھ واپس آئیں گے اور ملک کو بہتر بنائیں گے۔


ایک ایک بندہ لاکھوں بندوں کے برابر ہو گا۔

Asif said...

This number of half million statistics is very good number on behalf of Pakistan nations. As I can remember back when I was with IBM the Indian supervisor used to comment on immigration from Pakistan in comparison to huge Indian numbers in terms of insignificant to irrelevant numbers of total 40k to 50k per annual, therefore this is a huge achievement of legal immigrants.

Farooq said...

Pakistan-Americans on average are doing much better than the average American

https://cdn.americanprogress.org/wp-content/uploads/2015/04/AAPI-Pakistani-factsheet.pdf

Ahmad N. said...

All these Immigrants are talented people. They send remittances back to Pakistan which is vital for our economy. Our economy is not capable enough to provide job to all of its working force. Brain drain is out of the question. Its more like Rusting minds of Young professionals who don't find work here according to their skill and qualification. Plus our country is already over populated and our industry over employeed and Inefficient by that reason.
Don't just find a negative in every news

Ahmad F. said...

Not sure if that is a good thing— people emigrating. Shows lack of opportunity at home. A vote of no confidence.

Riaz Haq said...

Ahmad: " Not sure if that is a good thing— people emigrating. Shows lack of opportunity at home. A vote of no confidence"


Or better opportunity overseas than at home!

At 17.5 million, Indian diaspora largest in the world : UN report
India's leading country of origin of international migrants with a 17.5 mn strong diaspora, a UN report said.

Migrants from Mexico constituted the second largest diaspora (11.8 million), followed by China (10.7 million), Russia (10.5 million), Syria (8.2 million), Bangladesh (7.8 million), Pakistan (6.3 million), Ukraine (5.9 million), the Philippines (5.4 million) and Afghanistan (5.1 million).

At the country level, about half of all international migrants reside in just 10 countries, with the United States of America hosting the largest number of international migrants (51 million), equal to about 19 per cent of the world's total.

Germany and Saudi Arabia host the second and third largest numbers of migrants (13 million each), followed by Russia (12 million), the United Kingdom (10 million), the United Arab Emirates (9 million), France, Canada and Australia (around 8 million each) and Italy (6 million).


https://economictimes.indiatimes.com/nri/nris-in-news/at-17-5-million-indian-diaspora-largest-in-the-world-un-report/articleshow/71179163.cms

Riaz Haq said...

Myth: If poor countries get more aid, people won’t migrate
Some political leaders say that if we give more development aid to poor countries – especially in Africa – then their citizens won’t want to move away.

Truth: Economic growth leads to more migration

When countries develop, their citizens have more resources and skills, which allow them to migrate. This is called the “migration paradox”. Mexico, the Philippines and Turkey – all middle-income countries – produce substantial numbers of migrants. Very poor people don’t have the resources to migrate. The right to migrate is enshrined in the Universal Declaration of Human Rights.

http://journey.caritas.org/?myth=poor-countries-get-aid-people-wont-migrate

Riaz Haq said...

Pakistan at a crossroads
Nuno Lopes | Shahid Farooq Updated December 28, 2019

https://www.dawn.com/news/1524873/pakistan-at-a-crossroads

WITH over 200 million inhabitants, Pakis­tan stands at a crossroads. Recovering from a devastating surge of terrorism, it is now in its third consecutive democratic government.

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Traffic congestion and air pollution are common features in Pakistan today, and rapid urbanisation has created under-resourced urban settlements, causing unprecedented levels of economic, spatial, social and infrastructural challenges.

Urban settlements are the engines of growth and development, and, therefore, they can make or break a country’s sustainability. Pakistan is experiencing a turning point in sustainability, with many areas at the lowest ebb of urban crisis. In the UN 2018 e-government index for 2018, Pakistan’s largest city Karachi was ranked as the lowest among 40 cities of the world assessed for resilience and sustainability through e-governance.

This makes a holistic and integrated vision of urban challenges more necessary than ever. In this context, a smart sustainable cities paradigm has emerged worldwide as a solution to these challenges. As defined by the Operating Unit on Policy-Driven Electronic Governance of the United Nations University, a smart sustainable city is one that implements a transformative governance process, oriented at building capacities to solve multidimensional and complex problems, conducted within a multidisciplinary team and with the collaboration and cooperation of all stakeholders, aiming to achieve sustainable economic, social and environmental development.

Pakistan’s major cities are exactly at the threshold where policymakers have no choice but to adopt this concept. Implicitly, Pakistan Vision 2025 already suggested a smart city transformation, by stating that it “seeks to ensure that Pakistan’s cities are digitally connected [and] equipped with wireless network sensors ... thereby laying the foundations for the cities of Pakistan to be smart and creative”. However, this is still a very simplistic smart city vision, as it is based only on technologies and does not mention the need to build capabilities and competences for solving urban problems.

This narrow understanding of the smart city concept limits its practical implementation. Countries under these circumstances tend to be more easily influenced by multinational IT companies or by more developed countries, which want to sell their solutions as though they are a universal remedy. To be effective, the smart city concept must be understood, absorbed and implemented by Pakistani citizens, as they are the ones who know better what they need and want for their future.

Pakistan cannot afford to lose momentum or else it will run the risk of definitively losing its competitiveness in the region as well as globally. Given that its neighbours China and India are much more advanced in the field of smart cities, with very ambitious national plans and tech innovation hubs, Pakistan has to seize the opportunity to become more economically competitive and sustainable.

The country has favourable factors that can enable and boost a fast transformation. First, it can harness the opportunities offered by CPEC; second, it has a good ICT infrastructure, with 100 per cent 3G/4G mobile coverage, which can be used to implement smart technological solutions; and third, cities such as Lahore, Peshawar and Multan have a very rich cultural heritage, and these unique features can have a catalyst effect. In addition, these cities have a flourishing IT industry with a growing number of IT parks, data centres and innovative tech incubators which can attract international investors.

Syed H said...

But is the half a million figure an absolute figure or a net figure.....? I think it is the former, an absolute figure. What I mean is that it does not capture the number of Pakistanis returning to Pakistan. This is important, and a point often overlooked by Pakistani origin people living, like myself, in the West.

Pakistanis in the West often immigrate to permanently settle down, and acquire permanent forms of residency rights, such as citizenship. They often develop not just multiple legal identities as a result, but also perceptions of self that become multilayered. This becomes even truer of their offspring; going by the third generation British-Pakistanis I see in London, while sympathetic towards Pakistan, they see themselves as profoundly British, with being Pakistani often a distant afterthought. Being British Muslim is often more important than being British Pakistani. Their knowledge of local Pakistani languages is generally always very poor or non-existent. Few of this lot, first or later generations, ever return to Pakistan.

Contrast this with what is still the majority of Pakistani origin people overseas, those in the Middle East, specifically the Gulf Arab states. Here, there is generally no change to ones legal identity (or even perceptions of self) no matter how long one has been in the host nation. Your stay is only as long as your employment contract, or the employment contract of your spouse/parent. This also applies to children born in these countries, even if they may have grown up knowing no other country. As a result, there is in any given year, a big "churn" of Pakistanis coming and going from these countries. Therefore, simply taking the absolute figure as indicative without taking into account the large number of Pakistanis continually in the process of returning from spells of employment in the Gulf would not be accurate.

Also, while the article indicates that the Pakistan Bureau of Emigration is concerned with only Pakistanis going abroad to work, I wonder if it has assumed that all non-student Pakistanis automatically imply Pakistanis going abroad to work, and whether it has considered family reunification. This is because many Pakistanis are not going abroad to work; a significant proportion of them are family members, often spouses, joining Pakistanis living abroad. This is especially true of the UK, where the UK government has expressed concern about communities in Northern England having a deeply entrenched practice of arranged marriage to Pakistanis from Mirpur in Azad Kashmir (the place of origin of the majority of British Pakistanis), because of how it enables entry to the UK and citizenship in a short period of time for people who often are not just unskilled but lack knowledge of English.

Given given that the practice of marriage is, at least in the first and second generations of people of Pakistani origin, still at times impacted by some element of familial arrangement, this is not an insignificant factor, and any analysis by the Pakistan Bureau of Emigration should also seek to provide figures for it.

But for me the first point is most important; understanding migrations patterns (and the resulting debate about a "brain drain") would be made more meaningful if some allowance is made for the number of Pakistanis returning, especially from the Gulf Arab states where most overseas Pakistanis are located. Such returnees, often with substantial financial capital and enhanced skill sets, could mitigate to some degree perceived concerns about a permanent loss of talent and skills.

Riaz Haq said...

Legal Permanent Residents (Green cards) from Pakistan in Q1 of FY19 (Oct-Dec 2018)

Status Adjustment (of Pakistanis already in US) 1,270

New Arrivals (Pakistanis) in US: 2,233

Total From Pakistan: 3,503

Total From Bangladesh: 4,622

Total From South Korea: 4,782

Total From Vietnam: 9.693

Total From Philippines: 11,161

Total From India: 13,799

Total From China: 15,582

Total From Asia: 90,686

https://www.dhs.gov/immigration-statistics/special-reports/legal-immigration#File_end

Riaz Haq said...

DEMOGRAPHIC SNAPSHOT OF SOUTH ASIANS IN THE UNITED STATES
April 2019

http://saalt.org/wp-content/uploads/2019/04/SAALT-Demographic-Snapshot-2019.pdf

Over 9.5% of green card recipients in FY 2017 were from South Asian countries: Bangladesh (14,693); Bhutan (2,940); India
(60,394); Nepal (11,610); Pakistan (17,408); and Sri Lanka (1,627).

The South Asian American community grew roughly 40% between 2010 and 2017. (See Table 1) The Nepali community
experienced the most significant growth, increasing by 206.6% followed by Indian, Bhutanese, Pakistani, Bangladeshi, and
Sri Lankan populations.
By 2065, it is projected that Asian Americans will be the largest immigrant population. The term immigrant refers to 2
individuals living in the United States but were not U.S. citizens at birth and necessarily all individuals who trace their
ancestry to a country outside of the United States. Bhutanese (92%) and Nepalese (88%) communities have the highest
foreign-born shares, followed by Sri Lankans (78%), Bangladeshis (74%), Indians (69%), and Pakistanis (67%)


Citizen Voting Age Population (CVAP) describes the total South Asian American population that is eligible to vote.30
Bangladeshi - 69,825
Bhutanese - 1,242
Indian - 1,558,594
Nepalese - 18,931
Pakistani - 222,252
Sri Lankan - 22,161

Changes in South Asian American Population, 2010 to 2017
Single Ethnicity Reported4 Multiple Ethnicities Reported5
2010 2017 Percent
Change
2010 2017 Percent
Change
Bangladeshi 142,080 176,229 24% 147,300 185,622 26%
Bhutanese 18,814 23,904 27% 19,439 26,845 38.1%
Indian 2,918,807 4,094,539 40.3% 3,183,063 4,402,362 38.3%
Maldivian 102 N/A N/A 127 N/A N/A
Nepali 57,209 171,709 200.1% 59,490 182,385 206.6%
Pakistani 382,994 499,099 30.3% 409,163 544,640 33.1%

Riaz Haq said...

17 million #Indian #emigrants abroad, up from 7 million in 1990, 143% increase. In this period, #India’s per capita #income increased by 522% ($1,134 to $7,055), providing more people the means to travel abroad in search of better #employment. #NRI #Modi https://www.business-standard.com/article/current-affairs/as-india-becomes-wealthier-17-mn-leave-the-country-to-settle-abroad-118112100113_1.html

At the same time, the number of unskilled migrants leaving the country has been falling: An estimated 391,000 left India in 2017, almost half the number in 2011 (637,000), according to a new report by the Asian Development Bank (ADB).

However this does not necessarily mean that an increasing proportion of India’s emigrants are likely to be higher skilled or that policymakers should be worried about a rise in ‘brain drain’--the exodus of highly trained professionals from their native country.

The above figures refer to unskilled migrants travelling on Emigration Check Required (ECR) passports--passports issued by the Ministry of Overseas Indian Affairs to those leaving for employment in certain countries in the Middle East and Southeast Asia. Changes in the government criteria used to class workers as unskilled, leading to more migrants travelling on non-ECR passports, could be part of the reason for the declining trend.

“Over the years India has made internal adjustments to who gets an ECR passport. A lot of people are entitled to non-ECR passports and take that route to migrate instead--this is data which is not publicly available and therefore can not be analysed,” Seeta Sharma, Technical Officer (ILO) for EU-India Cooperation and Dialogue on Migration and Mobility, told IndiaSpend.

“It’s hard to say if more highly skilled people are leaving than in any other period and that ‘brain drain’ is increasing. Skills have increased across the board generally so the country may be losing higher skilled people compared to previous generations, but we’ve always had talent leaving the country to a large extent.”

International emigration generally rises with economic development as more people acquire the financial means to travel abroad, and only begins to reduce when countries reach upper-middle income status.

Labour demand driven by constrained local employment markets is a key motivation for international migration, with 73% of all migrants globally entering the workforce in their host country, the ADB report found.

India’s working age population is currently growing by 1.3 million each month, exacerbating a stagnant job market that is further afflicted by a lack of employment. As many as 20.8 million people applied for 90,000 available jobs with the Indian Railways, the country’s largest public-sector employer, the Times of India reported in March 2018.

Searching for a better life

Over almost three decades, between 1990-2017, India witnessed waves of skilled and unskilled labour emigration.

Indians living in the middle-eastern Arab state of Qatar increased 82,669%--from 2,738 to 2.2 million--over 27 years to 2017, more than in any other country.

In the two years between 2015-2017, the Indian population in Qatar more than tripled, rising by 250%.

Oman (688%) and the United Arab Emirates (622%) also feature in the top 10 countries for the largest increases in Indian residents between 1990-2017, while in Saudi Arabia and Kuwait, over seven years to 2017, Indian populations rose by 110% and 78% respectively.

These figures reflect the response of Indian workers to rapidly expanding economies in the Gulf, buoyed by rising oil prices. As these oil-rich nations embarked on large-scale development projects, workers from India and other South Asian countries answered the call for the growing number of construction jobs needing to be filled.

Riaz Haq said...

#Qatar seeks operational workforce from #Pakistan for World Cup 2022. Pakistan would send retired military officers (#security), traffic control, #hospitality and #IT #professionals for #FIFA World Cup 2020. #remittances https://www.brecorder.com/2020/01/03/558549/qatar-seeks-operational-workforce-from-pakistan-for-world-cup-2022/

FIFA World Cup 2022, which is scheduled to be held in Qatar has shifted from construction and development stage to operational stage. “We sent workforce pertaining to development and construction skill, there is a bit of break of one, two months at the moment, after which we are sending workforce specialised in operational skills," said Bukhari, while talking to media.

The SAPM said that they would be sending retired military officers, traffic control, hospitality and IT professionals. “We are a top priority for Qatar's FIFA 2022 World Cup," he said.

Talking about employment opportunities for Pakistanis in Japan, the SAPM informed that Pakistan was among the first country to sign a MoU with Japan for manpower.

According to the data shared by the Bureau of Emigration and Overseas Employment (BEOE), in 2019, the overseas employment of Pakistanis witnessed a massive increase of 47 per cent as some 563,018 Pakistanis found jobs overseas while only 382,439 went abroad for different employment opportunities in 2018.

Manpower export to Saudi Arabia registered a marked growth of 191 per cent in 2019 as compared to the last year when only 100,910 Pakistanis went there. Moreover, the United Arab Emirates (UAE), Oman, Qatar, Malaysia and Bahrain also imported a whooping number of Pakistanis in 2019. The UAE employed 195,241 Pakistani workforce, Oman 26,062, Qatar 17,413, Malaysia 10,390 and Bahrain 6,988 during the said year.

As per Overseas Pakistanis & Human Resource Development ministry the total number of emigrants who got foreign employment in 2019 included 45.5 percent skilled, 39.72pc unskilled, 10.64pc semi skilled, 2.53pc highly qualified and 1.56pc highly skilled workforce.

Riaz Haq said...

Why do 30,000-40,000 #migrants from #Pakistan head to #Europe every year? Prof Andreas Schloenhardt: Pakistan has a strong #expat community abroad; many #Pakistanis have family abroad, so they hope to join their families. #migration https://www.infomigrants.net/en/post/22133/why-do-migrants-from-pakistan-head-to-europe via @InfoMigrants

According to estimates by the Pakistani authorities, some 30,000 to 40,000 people from Pakistan attempt illegal passage to Europe via Iran and Turkey every year. InfoMigrants spoke to an expert to find out which factors lead to this trend.

InfoMigrants: What are the main causes that force people from Pakistan to undertake perilous journeys towards Europe?

Andreas Schloenhardt: The causes are complex and involve lots of factors from the Pakistani context; such as slow economic development, a fragile security situation, regularly occurring natural disasters and political instability. This leads to a scarcity of opportunities for higher education and skilled employment. In addition, Pakistan has a strong expat community abroad; many Pakistanis have family abroad, so they hope to join their families.

The majority of migrants heading to European countries tend to come from the Gujrat district in Pakistan’s western Punjab province. This trend has persisted for several decades now. How effective will legislation prove to be in limiting illegal migration from Pakistan?

In many parts of Pakistan, economic development and job opportunities are very limited and those are the main reasons for migration. Any laws or other measures to combat smuggling of migrants and close migration routes do nothing to address the main causes of migration and displacement. What is needed, are laws that manage and regulate emigration from Pakistan and entry into other countries, as well as mechanisms to facilitate the return of Pakistani nationals.

Pakistan has a labor migration policy that seeks to assist and protect Pakistani nationals seeking employment abroad (mostly in the Gulf region). This is however rarely matched by legislation in the receiving countries that control and manage incoming labor migrants. Much can be done on that front to push irregular migration into legal avenues.

Furthermore, many Pakistanis found to be in Europe unlawfully cannot just be returned to Pakistan as the country is slow at, and sometimes refuses to issue travel documents. Plus, quite a few countries don’t have any agreements with Pakistan to facilitate the return of migrants.

Smuggling of migrants is what they call a trans-national crime. Is anything being done at a trans-national level to combat this crime and to apprehend networks of smugglers who are spread across many regions and countries?

There are ample international initiatives to prevent and combat the smuggling of migrants on the international level. Chief among them is the Protocol against the Smuggling of Migrants. Regrettably, the problem of migrant smuggling seems to be receiving less attention from European governments now than compared to three or four years ago; only a few states actively engage in forums to make the protocol function and enhance international cooperation.

Furthermore, too little is being done to stop the smuggling of migrants overall. The Global Compact on Migration that came into force a year ago also provides durable solutions to stop smuggling of migrants, along with other forms of irregular migration. But, once more, many states are slow to implement meaningful responses; many remain hostile to them. The responsibility and fault here squarely rests with individual states, not with international organizations that stand ready to assist individual states.

Stopping smuggling of migrants seems not to be a priority in Pakistan - a country struggling with political instability, terrorism and a weak economy. Is this correct?

Riaz Haq said...

Remittances to #Pakistan jump over 9% in January 2020 totaling $1.90 billion vs $1.744 billion in Jan 2019. #Remittances for July-January period of current FY $13.3 billion vs $12.77 billion in prior fiscal year, an increase of 4.1%. https://www.khaleejtimes.com/business/remittances-to-pakistan-jump-over-9-per-cent-in-january

During January 2020, remittances received from Saudi Arabia fell 8.4 per cent to $433.4 million while Pakistani nationals in the UAE remitted $395.5 million, a decline of 7.5 per cent.

Remittances from the other major markets such as the USA and UK fell 6.3 per cent and 7.9 per cent to $335.1 million and $299.1 million, respectively.

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Moreover, the State Bank of Pakistan also hiked payment limits against freelance services for an individual in computer and information systems and other freelance services from $5,000 per month to $25,000 in order to attract more foreign exchange.

"The enhancement in limit will facilitate freelancers to route greater value of funds through a more economical and efficient channel of home remittances and help in receiving foreign exchange flows through formal banking channels in the country. This would also enable freelancers to expand their business/ operations and engage new freelancers to join the workforce," the central bank said in its statement.

---------------------

Moody's: Rising workers’ #remittances bode well for #Pakistan #economy. In 2012-19 period, remittances rose at a compounded annual rate of nearly 9%, with majority of inflows coming from #GCC (54%), #US (16pc), #UK (16pc) and #Malaysia (7%). https://profit.pakistantoday.com.pk/2020/02/17/increase-in-workers-remittances-bodes-well-for-pakistan-moodys/ via @Profitpk

An increase in worker’s remittances is positive for Pakistani banks and borrowers, as it supports deposit flows and strengthens household finances, according to the credit rating agency Moody’s.

In a report published on Monday, the agency said that the high levels of remittances have contributed to reported double-digit growth in residents’ household deposits.

Earlier on 12 February, the State Bank of Pakistan (SBP) released updated monthly data on workers’ remittances, which showed a 4pc increase in the monthly average for the fiscal year 2020, compared to the previous corresponding year.

According to SBP data, workers’ remittances received during the first seven months of FY20 amounted to a cumulative total of $13.3 billion.

The agency noted that the growth [in remittances] has provided a stable and low-cost deposit base to Pakistani banks, which in turn has enhanced banks’ profitability and increased their liquidity buffers.

The report further stated that the growth might help mitigate the effect of government deposit outflows. The SBP is considering introducing a Treasury Single Account, which will require government deposits to be placed with the SBP instead.

Despite Pakistan’s high-interest rates (unchanged since July 2019 at 13.25pc), the remittances have helped negate any associated challenges. That’s because households are better positioned to meet their financial obligations with banks.

Non-performing loans have also been maintained at historically low levels; consumer NPLs accounted for 5pc of total consumer loans as of the end of September 2019, while the system average NPL ratio was 8.8pc.

According to the World Bank, Pakistan was the seventh-largest recipient of remittances globally in 2018, with remittances inflows reaching $21 billion or 6.8pc of the country’s GDP.

Riaz Haq said...

Global #remittance flows expected to plunge by more than $100 billion, hitting #India, #Pakistan, #Egypt, #Nigeria, and the #Philippines where remittances are crucial source of external financing. #COVID19 #lockdown #OilPrice #economy https://www.ft.com/content/471cb6b2-f354-4fe0-b36f-3078a506a2d8 via @financialtimes


Remittance flows around the world are expected to plummet by more than $100bn this year, depleting a vital source of financing for low and middle-income nations as they struggle with the economic chaos triggered by the coronavirus pandemic, according to the World Bank.

In a report released on Wednesday, the bank said the impact of lockdowns that have closed economies across the globe and the resulting job losses would cause a 20 per cent decline in remittance flows to low and middle income countries compared with last year, from a record $554bn to $445bn.

It would be the largest fall in recent history, and those most vulnerable to the decline include fragile states such as Somalia, Haiti and South Sudan, and small island nations such as Tonga, with remittances accounting for more than a third of gross domestic product in some. Larger countries including India, Pakistan, Egypt, Nigeria, and the Philippines will also be hit as remittances have become a crucial source of external financing for them.

Dilip Ratha, the World Bank’s lead economist for migration and remittances, told the Financial Times that the fall would be a “major financial shock” to countries that depend on remittances.

“If we are expecting a fall of 20 per cent it’s going to be a huge shock, it’s going to cause a lot of hardship for countries in terms of macroeconomic management and balance of payments difficulties,” Mr Ratha said. “But more important is the human story . . . The number of people who are going to be impacted — both for the migrants in host countries and families back home it’s going to be huge.”


Last year, remittances overtook foreign direct investment to become the biggest source of capital inflows to low and middle-income countries for the first time; they accounted for about 8.9 per cent of GDP in poorer countries in 2019.

The World Bank estimates that in 2019 there were 272m international migrants — including 26m refugees — and more than 700m internal migrants around the world providing financial support to dependants elsewhere. But foreign workers are often the first to lose their jobs in times of crisis.


As global travel has been frozen, many are now in limbo, neither able to work nor to return to their home countries.

Some governments have introduced measures to support business to ensure they continue paying workers. But the World Bank said: “So far, government policy responses to the Covid-19 crisis have largely excluded migrants and their families back home.”

There have also been allegations that some Gulf states, including Saudi Arabia and Qatar, have deported migrants during the crisis. Saudi officials deny they have forcibly repatriated workers and said Riyadh was co-operating with governments if migrants wanted to return. Doha said those it deported were involved in “illegal activities” and insisted it was adhering to international standards in its treatment of workers.

Lockdowns have also made it harder for migrants to send money back to their families as money-transfer offices have been forced to close; many poorer migrants do not have bank accounts and are not able to conduct online money transfers.

Riaz Haq said...

#Pakistani diaspora bails out #Pakistan #economy. Account surplus of $424m in July 2020 vs current account deficit (CAD) of $613 million in July 2019. Remittances from diaspora reached monthly record $2,768 million in July 2020 #ImranKhan #PTI #COVID19 https://www.dawn.com/news/1576206

According to data released by the State Bank of Pakistan (SBP) last week, the country received record-high remittances of $2.768 billion in the first month of the new fiscal year, following the record $23bn received during the outgoing financial year.

“This ($2.768bn) is the highest-ever level of remittances in a single month in Pakistan,” SBP had said.

“More good news for Pakistan economy,” Prime Minister Imran Khan had tweeted last week. “Remittances from overseas Pakistanis reached $2768 million in July 2020, highest ever amount in one month in the history of Pakistan.”

Separately, Planning Minister Asad Umar also lauded the current account surplus for July 2020 in a tweet today, recalling that the PTI government had "inherited" a deficit of $2 billion "as a legacy of PML-N", which was in power until 2018.

"Remember the current account deficits have led to massive external debt and compromises our independence and security," he added.

Earlier this month, while quoting data released by the Finance Ministry, Dawn had reported that since the PTI came to power, CAD had been brought down from $20bn to $3bn while exports were up despite Covid-19 demand stagnation while cost of borrowing had been brought down due to better debt management.

Riaz Haq said...

In the outgoing FY (2019-20), Pakistani expatriates remitted a record of $23.12 billion with more than 6% year-on-year (YoY) growth compared to $21.74 of FY 2018-19.


http://tribune.com.pk/article/97174/the-curious-case-of-pakistans-spiralling-remittances

The momentum has not only persisted but amplified in on-going FY 21 with a whopping $2.77 billion remittance in July, followed by an inflow of $2.095 billion in August. This unprecedented surge is bemusing, and what has baffled many is the fact that this escalation has occurred during the pandemic. So, what could the potential triggers to this mammoth inflow be?
The extraordinary leap can be primarily due to the tightening of informal money markets, which has augmented the inflow through formal banking channels. In the budget for FY 2020-21, the incumbents allocated Rs25 billion to formalise foreign remittances, which would aid in stockpiling foreign exchange reserves to service colossal national debt obligations.
Pakistanis typically used to carry cash in their luggage physically. But due to flight reduction and sparse international travels, they would have been compelled to access official banking channels for money transfers. Also, remittances might have incremented on account of significant job losses in the Gulf region due to the Covid-related recession. Hence the spiral may demonstrate high one-time repatriation of money back to Pakistan.
On the other hand, the State Bank of Pakistan (SBP) has emphasised an orderly ‘market-based’ exchange rate management and sound policymaking under the Pakistan Remittance Initiative. The SBP sheds the spotlight on the reduction of the threshold for eligible transactions from $200 to $100 under the Reimbursement of Telegraphic Transfer (TT) Charges Scheme. It also stressed on adoption of digital channels and targeted marketing campaigns to promote formal routes. Similarly, IT-related freelance services’ payment limits have increased from $5,000 to $25,000 per individual per month. The SBP believes that it has facilitated to enhance home remittances through formal banking channels in Pakistan.
The crux of the matter is remittances will upslope further in the future due to effectuated compliance of formal banking channels. Still, the recent abnormal increment will ease down in the coming months when the western economies recuperate from the ramifications of the Covid-related slump.

Riaz Haq said...

Fitch has warned of decline in remittances amid the #Coronavirus shock. But #remittances have been robust in #Pakistan and Bangladesh. ADB says 14% of households in #Bangladesh, 8% in #Philippines, 4% in Pakistan and 2% in #India receive remittance income. https://www.fitchratings.com/research/sovereigns/apac-remittances-to-decline-amid-coronavirus-shock-08-09-2020

Fitch Ratings-Hong Kong-08 September 2020: The coronavirus pandemic and subsequent impact on the oil market are having a considerable effect on migrant workers and are likely to supress remittance flows in the APAC region, Fitch Ratings says in a special report. We expect flows to weaken in the coming quarters, even though recent amounts have been surprisingly robust in some countries due to temporary factors. Declining remittances in economies that are dependent on them may affect sovereign ratings through pressures on external finances and economic growth.

Demand for migrant labour has provided an important and stable source of foreign-currency remittance flows for a number of APAC sovereigns, including Bangladesh (6.0% of GDP), Pakistan (7.9%), Sri Lanka (8.0%) and the Philippines (8.4%). India is the largest recipient of remittances globally but they account for a small share of GDP at 2.9%. Remittance flows have helped keep current account deficits contained by offsetting large trade deficits. Indeed, without remittances the Philippines, Pakistan, Sri Lanka, and Bangladesh would all have large current account deficits of between 7%-10% of GDP.

Remittances in APAC also provide economic benefits to recipient countries. First, they support domestic consumption by providing an additional income source to households. According to the Asian Development Bank, about 14% of households in Bangladesh receive remittance income, 8% in the Philippines, 4% in Pakistan and 2% in India. Second, job opportunities for migrant workers relieve slack in domestic job markets.

Remittance flows in APAC were surprisingly mixed in the second quarter of 2020. Monthly data show a considerable and broad decline in remittances during April and May, as Fitch expected, but a recovery in June and July. The rebound in flows was particularly robust in Pakistan and Bangladesh, where flows broke records in both June and July. Sri Lanka and the Philippines also saw an improvement in remittance flows in June, but much more modest.

Anecdotal evidence points to temporary factors for the increase in recorded remittances in the recent period. These include migrant workers transferring their savings in preparation to return home, the impact of lockdown restrictions on transferring funds and a shift to formal remittance channels, which are picked up in the official data.
Fitch forecasts a 12% decline across the region in the second half of the year as the temporary support factors fade.

The deterioration in remittance inflows is likely to widen current account deficits, contributing to higher external financing needs. For countries with fragile external finances, such as Pakistan and Sri Lanka, the shock to remittances could exacerbate existing challenges. Lower oil prices and subdued import demand, however, are likely to soften the aggregate impact on external balances.

Remittances typically provide a countercyclical buffer for economic activity and vulnerable households. In domestic economic shocks, family members working abroad can increase remittances to help mitigate the impact of sluggish domestic activity. The pandemic, however, represents a much more synchronised global economic shock than previous downturns. This limits the potential support of the remittance channel.

Lower remittance flows could affect public finances through two channels: lower revenue collection from weaker consumption and higher social spending to support remittance-dependent households as well as returning migrant workers. Many countries in the region already have limited fiscal space to address the current coronavirus shock and the decline in remittances could exacerbate current challenges.