Fall in workers’ remittances unlikely

Published December 22, 2014
Illustration by Abro
Illustration by Abro

While the nation mourns the ruthless massacre of children in Peshawar and as the leadership ponders over the security strategy, it must not be easy for overseas Pakistanis to overcome their fear for their families’ safety back home.

Whatever their predicaments, the government expects their share in the national economy to increase, as indicated in the State Bank of Pakistan’s annual report for FY14 where it deals with the subject of remittances.

“…there is an element of counter-cyclicality in these inflows. When the domestic economy is not faring well, expatriate Pakistanis are likely to increase remittances to help their families here; also, if domestic employment opportunities do not look promising, or Pakistanis opt to emigrate because of security concerns, the flow of remittances is likely to increase,” it report says.

“This is not the case with traditional exports, which are dependent on a smooth functioning domestic economy or the in-roads that have been created in the international market,” it adds.

“Overseas Pakistanis are key stakeholders, as remittance sent back home not just support their families, but makes up for the laggard growth in exports to provide stability in the external sector, which is reflected in the value of the currency,” commented a senior official of the ministry of overseas Pakistanis and human resources over phone from Islamabad.

During the last fiscal year, exports rose 4pc, against about 14pc increase in home remittances, according to official data. In absolute terms, exports were $21bn in 2013-14, whereas remittances were reported at $15.8bn.

The relevant officials dismissed the possibility of an impact of the steep fall in oil prices on remittance inflows from the Middle East in the near future. As much as over 60pc remittances arrive in Pakistan from oil producing Middle Eastern states with Saudi Arabia leading with a 29.5pc share, followed by the UAE with 19.5pc. Other GCC countries collectively account for a further 11.8pc, according to the Economic Survey of Pakistan 2013-14.


I foresee no recession in inflows from the Middle East despite the 40pc fall in oil prices since June, and speculations about a reversal in the trend would be misplaced — federal secretary for overseas Pakistanis, Sikandar Ismail Khan


“I foresee no recession in inflows from the Middle East despite the 40pc fall in oil prices since June. If you look at the historical data, flows from that region have consistently been increasing. With several mega projects launched in the region and several others in the pipeline, given the multiple global and business events [Fifa World Cup, Expo 2020 etc], speculations about a reversal in the trend would be misplaced,” the federal secretary for overseas Pakistanis, Sikandar Ismail Khan, told Dawn over phone from his office.

A statement by the IMF last week supports his view: “The Arab energy exporting states of the Gulf can cope comfortably with sliding oil prices.”

While the federal minister for overseas Pakistanis Pir Sadruddin Shah Rashdi was not available, Rana Matloob, director-general of the Bureau of Emigration and Overseas Employment (BE&OE), endorsed the view of the federal secretary.

“According to our records, as many as 7.75m Pakistanis have left the country on work visas in the last 43 years since 1971. About 96pc of the workers are located in the Middle East. In the last two years, 98pc of the manpower went to this region,” he told this writer.

Under the Emigration Ordinance 1979, all citizens intending to travel abroad for employment are required to register with the BE&OE.

Dilating on the composition of the Pakistani workforce abroad, Matloob, who has worked in the department for over two decades, said Pakistan enjoys a competitive edge over other labour-exporting countries in the category of ‘construction workers,’ where Pakistanis are high in demand and command better salaries than other nationals.

In the service sector, Indians, Phillipinos, Sri Lankans, Thais and Indonesians fare better.

He informed that people either find a job directly or through employment facilitators. “The bureau gives licences to ‘employment promoters’. These are private establishments that are required to deposit

Rs300,000 to get a licence to operate. Currently, there are as many as around 2,000 promoters working in the country,” he disclosed.

They are expected to act as match-makers, but oftentimes are authorised by overseas companies to recruit on their behalf. Matloob promised to send the names of the 10 biggest companies in the field via email, but the message was not received before the deadline for this report.

Insiders say many of these outfits buy visas from their contacts in Middle Eastern countries and sell them in Pakistan at a premium.

When confronted, DG Matloob said his organisation, within its capacity, tracks and identifies wrongdoers, cancels their licences and penalises them by forfeiting the fee or a portion of it.

On the issue of planning and negotiating a better deal for job seekers who wish to emigrate for employment, ministry officials told this scribe that it was beyond the ambit of the federal ministry, and after the 18th amendment, the four provinces are supposed to handle the training and development of manpower. There has been some effort in the direction in Punjab and Sindh, but systems have yet to evolve to create a visible impact.

Officials at FPCCI, the apex trade body, were not equipped to make an informed comment, but they wished to be taken on board by the government on policy decisions.

“It is the prospects of increasing investment that generates interest in business circles. If expat Indians can prop up their economy by investing, I see no reason why overseas Pakistanis cannot be persuaded to invest in businesses and projects in Pakistan,” Dr Mehr, who heads a research cell at FPCCI, told this writer.

On the living and working conditions of Pakistani workers, a source in the federal ministry said ILO conventions often do not apply in kingdoms and emirates where most Pakistanis land for work. “Many Middle Eastern nations are not signatories to several human rights conventions,” he said.

“Besides, the government is too preoccupied to spare a thought for out-of-sight workers as long as the stream of foreign exchange inflows appears secured,” he added in frustration.

“Unfortunately, they are treated as a source of remittance in their country of origin and as alien workers in their country of destination. The issues of their well-being, hopes and aspiration are lost in reports expressing them in digits.”

Published in Dawn, Economic & Business, December 22th , 2014

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