Tuesday, July 13, 2021

Pakistan's Demographic Dividend: Record Remittances From Overseas Workers

Pakistan has received nearly $30 billion in worker remittances in fiscal year 2020-21, according to the State Bank of Pakistan. This is a new record representing about 10% of the country's gross domestic product (GDP). This money helps the nation cope with its perennial current account deficits. It also provides a lifeline for millions of Pakistani families who use the money to pay for food, education, healthcare and housing. This results in an increase in stimulus spending that has a multiplier effect in terms of employment in service industries ranging from retail sales to restaurants and entertainment. 

Overseas Pakistani Workers' Remittances. Source: Arif Habib

Pakistan's share of working age population (15-64 years) is growing as the country's birth rate declines, a phenomenon called demographic dividend. This dividend is manifesting itself in high levels of worker exports and record remittances pouring into the country. Saudi Arabia and the United Arab Emirates(UAE) are the top two sources of remittances but the biggest increase (58%) in remittances is seen this year from Pakistanis in the next two sources: the United Kingdom and the United States. 

Pakistani Workers Going Overseas. Source: Bureau of Emigration

Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade. 

Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

Pakistan Demographics

About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. 

Projected Population Decline in Emerging Economies. Source: Nikkei Asia


DW said...

Whats the reason for the largest growth of remittance from USA & uk?

Riaz Haq said...

Not sure but I do know the education, skill levels and earnings of Pakistanis in the US are higher than their counterparts in the Middle East.


Riaz Haq said...

Six reasons why remittances soared in South Asia during COVID-19


Tax incentives. Increasingly, policymakers want to encourage greater formal remittances. Pakistan and Bangladesh, which (along with Mexico) saw the highest surge in remittances in a sample of 45 developing countries, had recently introduced new remittance tax incentives. This one-off change may explain the high growth rate in 2020.


Remittance flows are a major source of income for all countries in South Asia, larger than all other capital inflows combined. In 2019, India received more remittances than any other country in dollar terms, and Nepal ranked third in the world in terms of remittances to GDP at 27 percent. Remittances seem to have been even more essential during the COVID-19 pandemic, increasing by 5.2 percent in 2020 in South Asia. But this was somewhat surprising because household surveys globally showed remittances falling, especially in the second quarter of 2020.

So, what happened in South Asia? Many studies indicate that remittances tend to increase when receiving households experience disasters or recessions. However, since the COVID-19 shock was global in nature, both home (recipient) and foreign (sender) countries were impacted. Migrant workers, many of whom- in North America, the EU, and the Middle East- are employed mostly in contact-intensive services sectors were particularly hard hit by COVID-19.


Our analysis in the World Bank’s latest South Asia Economic Focus shows that several factors help explain the large increase in remittances in 2020. Some also suggest there are great opportunities for policy interventions.

Savings repatriation. A portion of the recorded rise in remittances could represent repatriated savings of emigrants returning home after losing their jobs or not finding new opportunities. One example: Saudi Arabia granted less than 10,000 work visas per quarter in the first and third quarters of 2020, compared to an average approval rate of over 40,000.
Better capturing of remittance statistics. Remittances could have shifted from informal (unrecorded) to formal (recorded) channels. Part of the increase was just recording of flows unnoticed in the past in official statistics, not an actual increase . Before COVID-related travel restrictions, a significant share of remittances may have arrived through trips home by migrants or their trusted friends with cash in hand, gifts, etc. This was no longer an option during the pandemic.
Generosity. Dire economic conditions in South Asia could have encouraged greater giving by migrants’ close-knit family and community ties. South Asian countries rank high compared to other middle-income countries on a measure of altruism based on FINDEX . Current giving campaigns by diaspora amid the health crisis in India suggest this altruism is alive and well in 2021!
Financial innovation. The shift to more formal channels was facilitated by the accelerated development of Fintech and digital transfer apps such as G-pay and Alipay, which have made the digital transfer of funds more accessible and cheaper per transaction, leading to an overall increase in remittances.
Tax incentives. Increasingly, policymakers want to encourage greater formal remittances. Pakistan and Bangladesh, which (along with Mexico) saw the highest surge in remittances in a sample of 45 developing countries, had recently introduced new remittance tax incentives. This one-off change may explain the high growth rate in 2020.
Host country transfers. Some migrants were able to access cash transfers offered by host country governments, which would allow then to send home higher amounts than normal (e.g., stimulus payments in the United States).

Riaz Haq said...

India received over USD83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite a pandemic that devastated the world economy, according to a World Bank report.


China, which received USD 59.5 billion in remittances in 2020 against USD 68.3 billion the previous year, is a distant second in terms of global remittances for the year gone by, as per the latest World Bank data released on Wednesday.

In 2019, India had received USD83.3 billion in remittances.

The report said India’s remittances fell by just 0.2 per cent in 2020, with much of the decline due to a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.

In 2019, India had received USD83.3 billion in remittances.
India received over USD83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite a pandemic that devastated the world economy, according to a World Bank report.

China, which received USD 59.5 billion in remittances in 2020 against USD 68.3 billion the previous year, is a distant second in terms of global remittances for the year gone by, as per the latest World Bank data released on Wednesday.

In 2019, India had received USD83.3 billion in remittances.

The report said India’s remittances fell by just 0.2 per cent in 2020, with much of the decline due to a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.

India and China are followed by Mexico (USD42.8 billion), the Philippines (USD34.9 billion), Egypt (USD29.6 billion), Pakistan (USD26 billion), France (USD24.4 billion) and Bangladesh (USD21 billion), it showed.

In neighbouring Pakistan, remittances rose by about 17 per cent, with the biggest growth coming from Saudi Arabia, followed by the European Union countries and the United Arab Emirates.

In Bangladesh, remittances also showed a brisk uptick in 2020 (18.4 per cent), and Sri Lanka witnessed remittance growth of 5.8 per cent.

In contrast, remittances to Nepal fell by about two per cent, reflecting a 17 per cent decline in the first quarter of 2020.

The World Bank, in its latest Migration and Development Brief, said despite COVID-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.

Officially recorded remittance flows to low- and middle-income countries reached USD540 billion in 2020, just 1.6 per cent below the 2019 total of USD548 billion.

“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” Rutkowski added.

Jamil Ahmad said...

But Pakistan have 35B USD defecit in Trade import Export.
So still 5B USD loss.
May Almighty ALLAH protect Pakistan.

Riaz Haq said...

Jamil: "But Pakistan have 35B USD defecit in Trade import Export"

Pakistan annual trade deficit for fy 21 was $30 billion, not $35 billion


Riaz Haq said...

The annual trade deficit reached $30.796bn in July-June FY21 from $23.180bn over the corresponding period of last year. This may pose some challenges for the government in controlling external accounts.


In rupee terms, the trade deficit was posted at 33.8pc on a year-on-year basis.

The monthly deficit reached $3.333bn in June 2021 from $2.120bn a year ago, reflecting an increase of 57.2pc. In rupee terms, the trade deficit was posted at 50.5pc on a year-on-year basis. In FY20, the country’s trade deficit had narrowed to $23.099bn from $31.820bn in the previous year.

Trade gap has been widening since December 2020, mainly led by exponential growth in imports and comparatively slow growth in exports. The annual import bill went up by 25.8pc, or $11.517bn, to $56.091bn in FY21 from $44.574bn over the corresponding months of last year. In June 2021, the import bill reached an all-time high of $6.052bn against $3.719bn over the last year month, indicating growth of 62.7pc. On a month-on-month basis, the import bill increased by 14pc.

Adviser on Commerce Razak Dawood told a news conference on Thursday that the import bill increased mainly due to wheat and sugar imports. He said the import value of wheat and sugar stood at $1.2bn in outgoing fiscal year.

Commerce adviser says annual goods export of $25.3bn is highest in country’s history

Similarly, he said the import value for cotton stood at $1.2bn due to shortage in domestic production while machinery imports stood at over $8bn — an indication of expansion in industrial base.

The import bill is also rising mainly due to the increased imports of petroleum, soybean, machinery, raw material and chemicals, mobile phones, fertilisers, tyres and antibiotics and vaccines. The growth in remittances at the moment will be sufficient to finance the import bill.

Exports posted a growth year-on-year 18.2pc or $3.9bn to $25.294bn in FY21 from $21.394bn over the last year. In June, export proceeds reached $2.718bn from $1.599bn over the corresponding month of last year, indicating a growth of 70pc

On a month-on-month basis, exports surged by 62.65pc.

The commerce adviser said the value of annul export proceeds is the highest-ever in the history of Pakistan. The exports in June 2021 were also the highest for any month, he further claimed.

The export of services for FY21 is projected to be $5.9bn while the cumulative exports of goods and services during FY21 will cross $31bn.

“This is a remarkable achievement by our exporters considering the difficulties created by the Covid-19 pandemic at home and resultant contractions in our major markets,” Mr Dawood said.

“It was not an easy task as many countries went into lockdown which severely affected the business,” he said. “Not only did our exports survive the crisis but also we have enhanced it in many sectors. I salute our exporters on achieving the milestone,” the adviser added.

Talking about sectoral performance, he said textile exports increased 18.85pc, pharmaceutical 27pc and copper and copper derivatives 44pc, respectively. Meanwhile, he said, rice exports declined 8pc, cotton yarn 2pc, raw leather 16pc and plastic 6pc, respectively.

“With the current measures, exports are expected to grow by 5pc in next two years,” he added.

When asked about the stagnated exports at $25bn for last one decade, the adviser replied that it will take time to boost exports. He started giving reasons of decline in exports since 2013. “We have reversed the trend,” Mr Dawood claimed.

On the issue of non-implementation of The Strategic Trade Policy Framework and Textile Policy, Commerce Secretary Sualeh Faroqui said both policies were under the consultation process with the ECC.

Riaz Haq said...

Highest Levels in Country's Economic History in FY21...

1) Goods Exports =$25.26 bln
2) IT Exports=$2 bln
3) Remittances = $29.37 bln
4) Forex Reserves = $25.41 bln
5)Wheat Production=28.75mln tons
6)C/A Surplus =$153mln (11M)


Riaz Haq said...

In #Asia, rising #demand for fuel #oil from #Pakistan in August and September has seen higher premiums for spot HSFO cargoes loading over late-July 2021, which are typically used for blending. #energy #economy https://www.spglobal.com/platts/en/market-insights/latest-news/shipping/071921-asia-residual-fuels-key-market-indicators-for-july-19-23

ICE Brent futures September contract were trading at $72.55/b at 0145 GMT July 19, down from the $73.61/b level at 0830 GMT July 16, Intercontinental Exchange data showed.

In Asia, rising demand for fuel oil from Pakistan in August and September has seen higher premiums for spot HSFO cargoes loading over late-July, which are typically used for blending.

Singapore fuel oil traders estimate the August low sulfur fuel oil arbitrage flow of cargo from the West into the Straits at lower than July's levels of about 2.2 million mt.

** The premium for supply of Singapore ex-wharf marine fuel 0.5%S bunker on a term contract basis for August dates was heard offered at $3.50-$4.50/mt on the last trading day of the week ended July 16.

** Industry sources said that balance July dates are currently being inked at a premium of $3-$3.50/mt over Singapore Marine Fuel 0.5%S cargo assessments, compared with a premium of $1.50-$2.00/mt for offers made in June for July supply.

** In North Asia, suppliers in Zhoushan continue to compete with each other amid high inventories, market sources based there said. Low sulfur fuel oil production in China remains steady, contributing to ample supply, the sources added.

** China has eased the prevention measures for ships coming from India, but some regulations are still there in Zhoushan, capping bunker demand, industry sources said. Reflecting the weaker demand, the delivered Zhoushan 0.5%S marine fuel bunker price has fallen below the Singapore price since July 14.

** Meanwhile, Hong Kong has been seeing strong demand since the 14-day mandatory quarantine rule for crew members under COVID-19 restrictions was lifted a month ago, while supply for 0.5%S sulfur grade is likely to remain sufficient.

** The port is yet to see a full recovery in bunker demand after the 14-day mandatory quarantine was lifted, Hong Kong bunker industry sources said, attributing the slow recovery to lower bunker prices in mainland Chinese ports and shipowners' reluctance for bunker-only calls in Hong Kong amid high freight rates.

High Sulfur Fuel Oil
** According to ICE data, morning discussions for the August Singapore 380 CST/Rotterdam high sulfur fuel oil spread inched lower to $12/mt July 19, from the July 16 spread at $12.10/mt.

** After Pakistan LNG Ltd. cancelled procurement tenders for spot LNG, Pakistan State Oil has since issued seven new buy tenders for fuel oil to meet utilities demand, the first of which closes at the end of the week of July 26.

** The rise in demand for high sulfur fuel oil saw the cash differential to the FOB Singapore 180 CST HSFO assessment rise to a five-month high on July 15 at $3/mt, before falling to $1.44/mt July 16, S&P Global Platts data showed.

** Demand to meet the specifications of the cargoes sought by PSO has also seen higher prices paid for spot high sulfur fuel oil cargoes sold by India's BPCL and HPCL, market traders said.

** In North Asia, the 380 CST high sulfur bunker supply in Hong Kong is expected to remain tight for the rest of July when replacement cargo is scheduled to arrive, said a bunker supplier based there.

** Bunker suppliers hold 380 CST bunker grade only to meet demand and supply has been thin after the IMO 2020, market sources said.

** Hong Kong's 380 CST price was the highest in Asia over June 24-July 6, and has been the second highest since July 7 after Japan, reflecting the tightness, Platts data showed.

Riaz Haq said...

#Pakistan Commerce Chief says country aims to unlock #manufacturing & export potential. #Export-led growth & Make in Pakistan are our priorities. Exports reached a record $31.3b (goods $25.3b) & (services $6b) in fiscal 2020-21 despite #pandemic challenges https://gn24.ae/c047920aa036000

* The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery.
* To bolster exports, the government has removed three barriers: Shift from fixed parity that artificially overvalued rupee, giving refunds to exporters and industrialists on time and exemptions on customs duties mainly on raw materials.
* The Ministry of Commerce has set its eyes on the export target of $35 billion in the next fiscal year.
As the country plans to move beyond simple manufacturing, the five key areas of focus will be: pharmaceutical, engineering, food processing, fisheries, fruits and vegetables.
* To identify new markets and boost trade ties and investments, Pakistan is eyeing massive participation at Expo 2020 Dubai.
“Make in Pakistan is our top priority now” Dawood asserted. Pakistan’s policy in the past has been to support trading rather than manufacturing which is now changing under Khan’s administration. “Manufacturing is wealth creation. It helps build industries, create more jobs” which Pakistan, a country of 220 million people, desperately needs. The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery. Industrial support packages, incentives such as gas and electricity at regionally competitive rates for export-oriented businesses, tax exemptions for high-performing sector manufacturers helped achieve this growth.

Riaz Haq said...

#Malala says girls' #education 'worth fighting for'. The #GlobalEducationSummit wants to raise $5bn (£3.6bn) to support education in some of the world's poorest countries. #UK is promising £430m, #EU £595m, #US £218m, #Norway £300m & #Canada £173m https://www.bbc.com/news/education-58006728

"The world is facing a girls' education crisis," with more than 130 million girls missing out on school around the world, Malala Yousafzai has warned.

"Their futures are worth fighting for," the education campaigner told a global education summit in London.

She said the recovery from the pandemic had to mean fair access to education.

The Global Partnership for Education summit wants to raise $5bn (£3.6bn) to support education in some of the world's poorest countries.

Hosted by the UK and Kenya, it will raise funds for the next five years, creating an extra 88 million school places and supporting the learning of 175 million children.

'Biggest game-changer'
The pandemic has exacerbated the problems already facing schools in poorer countries - with warnings that children who were forced out of school because of coronavirus might never return.

School aid for Syrian children who know warplanes and not shops
PM pledges £430m for girls' education at G7
Government wins vote to cut overseas aid
The UK has promised £430m and other donor countries will be making pledges - with about $4bn (£2.9bn) of the total expected to be promised by Thursday.

The European Union promised £595m, Norway £300m, Canada £173m and the United States £218m over three years.

Julia Gillard, former Australian prime minister and chair of the Global Partnership for Education, which distributes funding from donor countries, was confident that the full $5bn would be raised, but different national budget cycles would mean it would arrive in stages.

She said the pandemic had disrupted education in all countries - but the impact of closing schools had been much worse in poorer countries where many families lacked access at home to internet connections or electricity.

Malala, a Nobel prize winner from Pakistan who has campaigned for female education, told the summit of the importance of investing in education, particularly for girls who don't have opportunities "just because of their gender".

"Too many children around the world - girls in particular - were already out of school before the pandemic," said UK Prime Minister Boris Johnson.

"Enabling them to learn and reach their full potential is the single greatest thing we can do to recover from this crisis," he said, urging the international community to contribute funding.

However, Mr Johnson has faced criticism, including from some of his own MPs, for pushing ahead with a cut in the UK's overseas aid budget.

Gabriela Bucher, executive director of Oxfam, questioned the priorities of a world in which billionaires could compete in launching private space rockets while millions of children are unable to go to school.

She also warned of the negative impact from the UK "dramatically cutting aid".

"It will especially leave girls less healthy and less safe, before they even set foot in the classroom," said the aid charity head.

Opening the event, UK Foreign Secretary Dominic Raab emphasised the value of investing in girls' education as the "engine of progress" - with better-educated mothers improving the health and wellbeing of their families.

Education for girls is the "biggest game-changer", he told the summit.

Kenya's cabinet secretary for foreign affairs Raychel Omamo warned of the disruption caused by the pandemic - but said "education is the pathway, the way forward".

Riaz Haq said...

Message to #Pakistani "liberals": The ideal praise to criticism ratio is about 5.6 to 1. Praise your country and its people 5.6X more often than you criticize to encourage better #performance. #positivethinking https://hbr.org/2013/03/the-ideal-praise-to-criticism

Which is more effective in improving team performance: using positive feedback to let people know when they’re doing well, or offering constructive comments to help them when they’re off track?

New research suggests that this is a trick question. The answer, as one might intuitively expect, is that both are important. But the real question is—in what proportion?

The research, conducted by academic Emily Heaphy and consultant Marcial Losada*, examined the effectiveness of 60 strategic-business-unit leadership teams at a large information-processing company.

“Effectiveness” was measured according to financial performance, customer satisfaction ratings, and 360-degree feedback ratings of the team members. The factor that made the greatest difference between the most and least successful teams, Heaphy and Losada found, was the ratio of positive comments (“I agree with that,” for instance, or “That’s a terrific idea”) to negative comments (“I don’t agree with you” “We shouldn’t even consider doing that”) that the participants made to one another. (Negative comments, we should point out, could go as far as sarcastic or disparaging remarks.) The average ratio for the highest-performing teams was 5.6 (that is, nearly six positive comments for every negative one). The medium-performance teams averaged 1.9 (almost twice as many positive comments than negative ones.) But the average for the low-performing teams, at 0.36 to 1, was almost three negative comments for every positive one.

So, while a little negative feedback apparently goes a long way, it is an essential part of the mix. Why is that? First, because of its ability to grab someone’s attention. Think of it as a whack on the side of the head. Second, certainly, negative feedback guards against complacency and groupthink.

And third, our own research shows, it helps leaders overcome serious weaknesses. The key word here is serious. Our firm provides 360-degree feedback to leaders. We have observed among the 50,000 or so leaders we have in our database that those who’ve received the most negative comments were the ones who, in absolute terms, improved the most. Specifically, our aggregate data show that three-fourths of those receiving the lowest leadership effectiveness scores who made an effort to improve, rose on average 33 percentile points in their rankings after a year. That is, they were able to move from the 23rd percentile (the middle of the worst) to the 56th percentile (or square in the middle of the pack).

A few colleagues have raised their eyebrows when we’ve noted this because we’re strongly in the camp that proposes that leaders work on their strengths. How do we reconcile these seemingly contrary perspectives? Simple: the people who get the most negative feedback have the most room to grow. It’s far harder for someone at the 90th percentile already to improve so much.

But clearly those benefits come with serious costs or the amount of negative feedback that leads to high performance would be higher. Negative feedback is important when we’re heading over a cliff to warn us that we’d really better stop doing something horrible or start doing something we’re not doing right away. But even the most well-intentioned criticism can rupture relationships and undermine self-confidence and initiative. It can change behavior, certainly, but it doesn’t cause people to put forth their best efforts.

Riaz Haq said...

Workers' #remittances from #Pakistani diaspora amount to $2.71 billion in July 2021, down 2.1% from July 2020. State Bank of #Pakistan points out that the figure has remained over $2 billion for the 14th straight month in a row. #economy https://www.brecorder.com/news/40112428

Overseas workers' remittances amounted to $2.71 billion in July 2021, a 2.1% fall year-on-year, with the country's central bank pointing out that the figure has remained over $2 billion for the 14th straight month.

Data released by the State Bank of Pakistan (SBP) on Tuesday said that inflows of $2.71 billion were recorded in July 2021. This is the second-highest ever level of remittances reported in the month of July, it added.

In terms of growth, remittances increased 0.7% over the previous month ($2.68 billion in June 2021), and showed a decline by 2.1% over the same month last year ($2.76 billion in July 2020). This marginal year on year decline was largely on account of Eid-ul-Azha, which resulted in fewer working days this July compared to last year, said the SBP.

Remittance inflows during July 2021 were mainly sourced from Saudi Arabia ($641 million), United Arab Emirates ($531 million), United Kingdom ($393 million) and the United States ($312 million).

The central bank was of the view that proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.

Pakistan's remittances reach historic high of $29.4 billion in FY21

Remittances play an important part in Pakistan's economy that continues to battle widening trade and current account deficits. The country's trade deficit widened by 85.53% to $3.104 billion in July 2021 as compared to $1.673 billion in the corresponding month of 2020, said the Pakistan Bureau of Statistics (PBS).

According to trade data, the import bill in July this year went up 47.90% to $5.434 billion against $3.674 billion over the corresponding month last year. Meanwhile, the country’s exports witnessed an increase of 16.44% and remained $2.33 billion in July 2021 compared to $2.001 billion in July 2020.

The SBP's Third Quarterly Report on The State of Pakistan’s Economy for the fiscal year 2020-21, expected workers' remittances to remain buoyant, as the main factors (switch to formal channels, incentives for banks and MTOs, etc.) will still be in place.

Riaz Haq said...

The New Population Bomb


"A few years ago, we would get three times more recruits than we could accept," observed an employee with a staffing company in Vietnam that recruits workers for Japan's Technical Intern Training Program. "These days, we can barely get twice as many. Within five years, the number of people working away from home may start to drop."

Many Asian economies have experienced this phenomenon already, known in economics as the Lewis turning point, after British economist W. Arthur Lewis. Workers migrate from rural areas to cities, supporting economic growth by working for low wages. Eventually, growth stops because of rising wages and a shrinking labor force.

The answer, in many cases has been immigrants, which have contributed to growth in developed countries after population growth slowed. According to the U.N., there were 281 million international migrants in 2020, 1.6 times more than roughly 20 years earlier.

Border restrictions imposed during the COVID-19 pandemic have highlighted how dependent some countries have become on foreign workers.

Without immigration, many advanced economies already cannot sustain their labor pool. In the U.K. after Brexit, the combination of immigration restrictions and the pandemic has led to a severe labor shortage. Before the pandemic, 12% of heavy truck drivers were from the European Union. However, drivers can no longer be hired from outside the country under the U.K.'s new standards. According to the British Road Haulage Association, the country faces a shortage of more than 100,000 commercial heavy truck drivers. Logistics companies are becoming desperate, raising hourly wages by 30%.

The lack of immigration may not be a temporary phenomenon. The countries with the most outbound immigrants are seeing their young populations decline. The number of Indians between the ages of 15 and 29 will peak in 2025. In China that cohort will drop by about 20% in the next 30 years.

The Philippines, one of the biggest labor-exporting countries in the world, where about 10% of the population is thought to work abroad, is also showing signs of reversing course to focus on domestic production. The country is increasing the amount of domestic contract work, such as call centers. The incoming amount of overseas remittances grew by over 7% year-on-year in the first half of the 2010s, but that slowed to 3% in 2018.

Some countries have already started trying to secure workers. Germany increased its acceptance of non-EU workers in 2020. In 2019, Australia increased the maximum length of working holidays from two years to three, on the condition that people work for a set period of time in sectors where there is a labor shortage, such as agriculture. Japan also is bringing in more foreign workers through the "specified skilled worker" system.

Economic forces may drive a new competition among nations for immigrants. One key is to become a "country of choice." "A policy of actively accepting immigrants means it is important to expand the options for foreign workers to settle and live in a country permanently," said Keizo Yamawaki, a professor at Meiji University in Tokyo who specializes in immigration policy.

Riaz Haq said...

Javed Hassan
“We design courses in collaboration with industry and play a very important role in terms of international linkages and accreditation in the skills area. Traditionally, these skills would include plumbing, electrical, welding, carpentry, etc; today they encompass high-tech areas”

“such as AI, coding and web design. To summarise, NAVTTC designs policy for the government, allocates resources and ensures that the standards meet the local market requirements and are internationally accepted as well.”




MAB: How receptive is the industry to this idea?
SJH: People in the industry always maintain that training is the critical need of the country and we should be investing much more in that direction. The reality is that they look to the government to provide all the training and the facilities; they don’t want to invest time and energy in a more involved collaboration. We have tried to work with the Chambers of Commerce, but so far, we have not seen the kind of enthusiasm that is needed. However, things are changing. For example, we are working closely with the Hashoo Group to train young people in the hospitality sector. We are also working with a few manufacturing companies that are providing training on the factory floor. Pakistan’s main problem is productivity and productivity is dependent on the capability of the labour force; unless industry is prepared to invest in them, it will not have a capable labour force.

MAB: From which educational stream do most trainees come from?
SJH: When we were just offering traditional skills, we were attracting young people from the Matric or FSC level from government schools; young people who probably were unable to get into a university. As a result, there was a stigma attached to vocational training, an unfair one in my view – and people preferred not to opt for vocational training, even though there are good jobs out there and with good earning potential. Under Hunarmand Pakistan’s Kamyab Jawan Scheme, we have introduced high-end technical skills that offer entrepreneurial or digital facing opportunities, and since then we have seen a very different kind of student body coming in. Many are graduates who have not found jobs because they lack industry experience (it makes you wonder what kind of graduates we are producing that the industry is unwilling to hire them) and have taken advantage of the courses we offer and almost immediately found jobs. In the first phase, we trained about 40% of our intake in traditional skills, and according to an internal survey, almost 65% found a job. In terms of the high-end technical skills, about 80 to 85% have either started their own companies, are freelancing or are in jobs. We are now seeing young people from different social stratas taking up the trainings we offer. We cannot know everything about the market and one of the best proxies to understand the market requirements is to find out what the young themselves want to learn; they better than anyone else know what kind of jobs are out there and we have persuaded the institutes to talk to industry as well as to the young people and design the courses accordingly. As a result, applications have been much higher compared to the previous ones, when NAVTTC as well as the vocational institutes had to run after people to persuade them to enrol; in fact, this time, the courses have been oversubscribed. We should not underestimate the wisdom of young people. Most of them want to find jobs and stand on their own feet; do not force them on to a certain path; instead, ask them what path they want to follow and enable it.

Riaz Haq said...

Overseas worker #remittances to #Pakistan continue to remain robust, stand at $2.5b in October 2021, up 10.2% from October 2020. Remittances sent home by overseas #Pakistanis residing in the #US soared 26.4%.

The remittances sent home by overseas Pakistan surged 10.2% in October 2021 to $2.5 billion on a year-on-year basis owing to measures taken by the government and the State Bank of Pakistan to encourage the use of formal channels to send money home.

According to the data released by the State Bank of Pakistan (SBP) on Sunday, the inflow of remittances had stood at $2.3 billion in the same month last year.

“In addition to staying above $2 billion since June 2020, this is the eighth consecutive month when remittances have been close to or above $2.5 billion,” SBP said in a statement. “Proactive policy measures by the government and SBP to incentivise the use of formal channels and altruistic transfers to Pakistan amid the pandemic have positively contributed towards the sustained improvement in remittance inflows since last year.”

However, the inflows declined 5.7% on a month-on-month basis as they had amounted to $2.67 billion in September 2021.

Speaking to The Express Tribune, Ismail Iqbal Securities Head of Research Fahad Rauf said that the trend of remittances has remained robust for the past few months.

“While regional countries witnessed a drop in remittance inflows in the last few months, Pakistan recorded a sustained uptrend in receipts,” he cherished citing that the current number was encouraging for economic managers of Pakistan.

Speaking about the month-on-month decline, he pointed out that a slowdown in growth was being witnessed due to resumption of cross border travel in the world.

However, he held firm hope that Pakistan would record receipt of $30 billion from overseas Pakistan in full fiscal year 2021-22.

Echoing his views, Pak-Kuwait Investment Company Head of Research Samiullah Tariq stated that the month-on-month decrease was a seasonal phenomenon and increase in number of foreign flights had capped remittance flow.

During the first four months of the ongoing fiscal year (July-October 2021), remittances rose 11.9% to $10.6 billion on a year-on-year basis. The country had received $9.4 billion in the same period of previous fiscal year.

Country wise figures

According to the central bank, Pakistanis based in Saudi Arabia sent the largest amount of remittances at $655.4 million in October 2021, which was 3.25% higher than $634.8 million received in the same month last year.

The amount sent home by expatriates in UAE registered a decrease of 10% to $456 million in October 2021. Inflows from the Middle Eastern nation had amounted to $504.1 million in the same month last year.

Pakistanis in UK managed to send $346.7 million home in the month under review compared to $278.5 million in the same month last year, an increase of 24.5%.

Remittances sent home by overseas Pakistanis residing in US climbed 26.4% last month as they amounted to $231.8 million against $183.3 million in the same month last year.

Receipts from GCC countries other than Saudi Arabia and UAE inched up 4.7% to $285.6 million. The amount received from the region had stood at $272.8 million last year.

Pakistanis in European Union sent 43% higher remittances in October 2021 as the inflows amounted to $291.1 million against 203.2 million in October 2020.


Riaz Haq said...

Nations Lure Foreigners. After #COVID19 #Pandemic, Wealthy Nations Wage Global Battle for Migrants. Several developed countries, facing #aging #labor forces & #worker #shortages, are racing to recruit, train & integrate foreigners. #Canada #Germany #Japan https://www.nytimes.com/2021/11/23/world/asia/immigration-pandemic-labor-shortages.html?smid=tw-share

As the global economy heats up and tries to put the pandemic aside, a battle for the young and able has begun. With fast-track visas and promises of permanent residency, many of the wealthy nations driving the recovery are sending a message to skilled immigrants all over the world: Help wanted. Now.

In Germany, where officials recently warned that the country needs 400,000 new immigrants a year to fill jobs in fields ranging from academia to air-conditioning, a new Immigration Act offers accelerated work visas and six months to visit and find a job.

Canada plans to give residency to 1.2 million new immigrants by 2023. Israel recently finalized a deal to bring health care workers from Nepal. And in Australia, where mines, hospitals and pubs are all short-handed after nearly two years with a closed border, the government intends to roughly double the number of immigrants it allows into the country over the next year.

The global drive to attract foreigners with skills, especially those that fall somewhere between physical labor and a physics Ph.D., aims to smooth out a bumpy emergence from the pandemic.

Covid’s disruptions have pushed many people to retire, resign or just not return to work. But its effects run deeper. By keeping so many people in place, the pandemic has made humanity’s demographic imbalance more obvious — rapidly aging rich nations produce too few new workers, while countries with a surplus of young people often lack work for all.

New approaches to that mismatch could influence the worldwide debate over immigration. European governments remain divided on how to handle new waves of asylum seekers. In the United States, immigration policy remains mostly stuck in place, with a focus on the Mexican border, where migrant detentions have reached a record high. Still, many developed nations are building more generous, efficient and sophisticated programs to bring in foreigners and help them become a permanent part of their societies.

“Covid is an accelerator of change,” said Jean-Christophe Dumont, the head of international migration research for the Organization for Economic Cooperation and Development, or O.E.C.D. “Countries have had to realize the importance of migration and immigrants.”

The pandemic has led to several major changes in global mobility. It slowed down labor migration. It created more competition for “digital nomads” as more than 30 nations, including Barbados, Croatia and the United Arab Emirates, created programs to attract mobile technology workers. And it led to a general easing of the rules on work for foreigners who had already moved.


One of the sharpest shifts may be in Japan, where a demographic time bomb has left diapers for adults outselling diapers for babies. After offering pathways to residency for aged-care, agriculture and construction workers two years ago, a Japanese official said last week that the government was also looking to let other workers on five-year visas stay indefinitely and bring their families.

Riaz Haq said...

World Bank: "Remittances to South Asia likely grew around 8 percent to $159 billion in 2021....Pakistan had another year of record remittances with growth at 26 percent and levels reaching $33 billion in 2021" #Pakistan #remittances #diaspora #migration https://www.worldbank.org/en/news/press-release/2021/11/17/remittance-flows-register-robust-7-3-percent-growth-in-2021

Remittances to low- and middle-income countries are projected to have grown a strong 7.3 percent to reach $589 billion in 2021. This return to growth is more robust than earlier estimates and follows the resilience of flows in 2020 when remittances declined by only 1.7 percent despite a severe global recession due to COVID-19, according to estimates from the World Bank’s Migration and Development Brief released today.

For a second consecutive year, remittance flows to low- and middle-income countries (excluding China) are expected to surpass the sum of foreign direct investment (FDI) and overseas development assistance (ODA). This underscores the importance of remittances in providing a critical lifeline by supporting household spending on essential items such as food, health, and education during periods of economic hardship in migrants’ countries of origin.

“Remittance flows from migrants have greatly complemented government cash transfer programs to support families suffering economic hardships during the COVID-19 crisis. Facilitating the flow of remittances to provide relief to strained household budgets should be a key component of government policies to support a global recovery from the pandemic,” said Michal Rutkowski, World Bank Global Director for Social Protection and Jobs.

Factors contributing to the strong growth in remittance are migrants’ determination to support their families in times of need, aided by economic recovery in Europe and the United States which in turn was supported by the fiscal stimulus and employment support programs. In the Gulf Cooperation Council (GCC) countries and Russia, the recovery of outward remittances was also facilitated by stronger oil prices and the resulting pickup in economic activity.

Remittances registered strong growth in most regions. Flows increased by 21.6 percent in Latin America and the Caribbean, 9.7 percent in Middle East and North Africa, 8 percent in South Asia, 6.2 percent in Sub-Saharan Africa, and 5.3 percent in Europe and Central Asia. In East Asia and the Pacific, remittances fell by 4 percent - though excluding China, remittances registered a gain of 1.4 percent in the region. In Latin America and the Caribbean, growth was exceptionally strong due to economic recovery in the United States and additional factors, including migrants’ responses to natural disasters in their countries of origin and remittances sent from home countries to migrants in transit.

The cost of sending $200 across international borders continued to be too high, averaging 6.4 percent of the amount transferred in the first quarter of 2021, according to the World Bank’s Remittance Prices Worldwide Database. This is more than double the Sustainable Development Goal target of 3 percent by 2030. It is most expensive to send money to Sub-Saharan Africa (8 percent) and lowest in South Asia (4.6 percent). Data reveal that costs tend to be higher when remittances are sent through banks than through digital channels or through money transmitters offering cash-to-cash services.

“The immediate impact of the crisis on remittance flows was very deep. The surprising pace of recovery is welcome news. To keep remittances flowing, especially through digital channels, providing access to bank accounts for migrants and remittance service providers remains a key requirement. Policy responses also must continue to be inclusive of migrants especially in the areas of access to vaccines and protection from underpayment,” said Dilip Ratha, lead author of the Brief and head of KNOMAD.

Riaz Haq said...

Power will be more concentrated in #India’s Hindi belt where #Modi is popular. “The large, poor tracts that line the northern Ganges River continue to show high fertility rates”. Already, 69% of #Indians say only #Hindi speaking #Hindu are truly Indian


India’s population growth is losing steam as the average number of children born crossed below a key threshold, according to newly released data from a government survey.

India’s most recent National Family Health Survey, which is conducted every five years by the Health Ministry, was released Wednesday and showed the total fertility rate (TFR) across India dropping to 2.0 in 2019-2021, compared with 2.2 in 2015-2016. A country with a TFR of 2.1, known as the replacement rate, would maintain a stable population over time; a lower TFR means the population would decrease in the absence of other factors, such as immigration.

The figures were hailed as a heartening signal by government officials and researchers in a country that is expected to overtake China to become the world’s most populous sometime this decade. Since the mid-20th century, Indian leaders have tried to curb high birthrates, which are often reversely correlated with women’s welfare metrics and economic progress. A burgeoning population is seen, in the longer term, as a hurdle to development and a driver of environmental degradation and greenhouse gas emissions.


Heartland misery: Four states hosting 30% of Lok Sabha seats are among the poorest. That’s a message for India

The South appears better placed. In 1991, on economic reform-eve, Bihar and Tamil Nadu were nearly at par in per capita GDP. Three decades later, TN has whittled down its multidimensionally poor to 4.9% of population while Bihar languishes at 51.9%. Jharkhand follows with 42%, UP 38% and MP 37%. The cruel governance irony of these numbers is that the four laggard states cumulatively account for 30% of seats in Lok Sabha and their electoral outcomes play a decisive role in national government formation. https://timesofindia.indiatimes.com/blogs/toi-editorials/heartland-misery-four-states-hosting-30-of-lok-sabha-seats-are-among-the-poorest-thats-a-message-for-india/

The heavy poverty burden, despite tremendous political heft and massive welfare funding, indicts heartland netas. Poor states cannot afford their enduring obsession with identity politics, but a shift in discourse towards economic development looks unlikely. Meanwhile, farm laws’ reversal makes poverty eradication in villages harder. Accounting for nearly 5 crore of India’s 12.5 crore unviable agricultural land holdings under 2 hectares, the failure of these four states to call out the subsidised big farmers and lead the clarion call for agri-reforms was another missed opportunity for their political economy.

The multidimensional poverty index constructed on health, education, and standard of living indicators like nutrition, years of schooling, and amenities like cooking fuel, electricity, pucca housing, sanitation, household assets etc, claims to better the erstwhile methodology of pegging a poverty baseline in monetary terms. Performance here depends to an extent on India’s sprawling welfare state, which has admittedly gained more mastery in delivering household amenities to the poor. But NFHS-5 findings of 60% women and young children facing malnutrition uncovers the limitations of welfarism, and conversely, the importance of economic growth to create enough jobs. Over to Nitish, Soren, Yogi, Shivraj, Akhilesh, Tejashwi and Kamal Nath.

Riaz Haq said...

India’s population will start to shrink sooner than expected
For the first time, Indian fertility has fallen below replacement level


When something happens earlier than expected, Indians say it has been “preponed”. On November 24th India’s health ministry revealed that a resolution to one of its oldest and greatest preoccupations will indeed be preponed. Some years ahead of un predictions, and its own government targets, India’s total fertility rate—the average number of children that an Indian woman can expect to bear in her lifetime—has fallen below 2.1, which is to say below the “replacement” level at which births balance deaths. In fact it dropped to just 2.0 overall, and to 1.6 in India’s cities, says the National Family Health Survey (nfhs-5), a country-wide health check. That is a 10% drop from the previous survey, just five years ago.


Slowing growth will reduce long-term pressure on some resources that are relatively scarce in India, such as land and water. The news may have other benefits, too. Politicians have often used fear of population growth to rally votes, typically by accusing “a particular community”—a circumlocution referring to India’s 15% Muslim minority—of having too many babies. Narendra Modi, the prime minister, has warned of a looming population explosion. Members of his Bharatiya Janata Party (bjp) have even called for limits to family size. In July legislators in bjp-controlled Uttar Pradesh proposed a law that would deny government services to families with more than two children.

The Indian government’s new numbers may curtail these execrable suggestions. Fertility among Indian Muslims is generally higher than among Hindus. This is in part because so many are poor. But the difference has steadily narrowed; between 2005 and 2015 the fertility rate among Indian Muslims dropped from 3.4 to 2.6. Data on religion have yet to be parsed from the latest survey, but the fertility rates it shows for India’s only two Muslim-majority territories, the Lakshadweep Islands and Jammu & Kashmir, are far below replacement level and among the lowest in India, at 1.4.

While a declining fertility rate is broadly a sign that India is richer and better educated than before, it will also bring worries. Economists have long heralded the “demographic dividend”, when productivity rises because a bigger slice of the population pyramid is of working age. This window will now be narrower, and India will have to contend sooner with a fast-growing proportion of elderly people to care for.

Stark discrepancies in fertility rates between states also carry dangers. In future more Indians from the crowded north will seek jobs in the richer and less fecund south. Politicians will also face the hot issue of how to allot parliamentary constituencies. Back in 1971 Mrs Gandhi froze the distribution of seats among states. The result is that whereas an mp from Kerala now represents some 1.8m constituents, one from Uttar Pradesh represents nearly 3m. When the freeze on redistricting lifts some time in the next decade, these disparities will spawn a big fight.

Riaz Haq said...

Manpower export: Pakistan hopes to send 2 million workers abroad in next two years
Pakistan sent over 1.1 million workers abroad during the last three years despite the COVID-19 pandemic, claims Fawad Chaudhry


As per the stats, Saudi Arabia is the largest recipient of Pakistani workers as 56,9870 people reached the kingdom during the last three years for various jobs, followed by UAE with 27,1775 Pakistani expats.

During the three-year period, 61,423 Pakistanis were sent to Oman, 53,692 to Qatar, 2,464 to UK, 1,943 to China and 1,157 to the US.

In total, Pakistan sent 1,026,640 workers abroad in the last three years.

Pakistan beat India, Bangladesh in manpower export in 2020

According to the Ministry of Overseas Pakistanis, the country has beaten Bangladesh and India in manpower export and has emerged as the "manpower export leader" in the region by sending around 224,705 workers to different countries for various jobs in 2020.

In a statement in July, the ministry said Bangladesh sent 217,699 workers abroad and India 94,145 for employment purposes during the same period.