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NON-FICTION: CAPITALISING ON MIGRATION

April 29, 2018

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Migrant labourers work on a road construction site in Dubai | AP
Migrant labourers work on a road construction site in Dubai | AP

Building Nations with Non-Nationals: The Exclusionary Immigration Regimes of the Gulf Monarchies is a short book at only 129 pages long and it appears at a difficult moment in Pakistan’s history. Authored by Ivan Szelenyi in collaboration with Riaz Hassan and Vladislav Maksimov, it is an important study that should be carefully read, not only by scholars but also by policy analysts and policymakers.

It has been published at a time when Islamabad must begin to seriously rethink its relations with the world outside. Pakistan’s relations with the United States have deteriorated fast with American president Donald Trump using language for Pakistan that would be hard to swallow for any self-respecting nation. He has begun to blame Pakistan for the American problem in Afghanistan and has carried out his threat to cut all forms of assistance to Pakistan. This could have had serious consequences had China not appeared on the horizon with a large programme of assistance to Pakistan.

Having failed to increase its domestic savings rate and build its export sector, Pakistan has depended heavily on foreign flows to finance economic development. Historically, the US was an important source of external assistance. In fact, Pakistan’s three periods of high rate of economic growth were all associated with large capital flows from the US. In the 1960s, 1980s and the early 2000s, Washington needed Pakistan’s help. Islamabad was ready to aid America and was rewarded with large amounts of economic and military assistance. But after its own mission was accomplished, Washington walked away, leaving Islamabad to deal with the consequences of the American exit. It came back all three times, needing Pakistan’s help in a different matter.

A book looking specifically at Pakistani migrants to the UAE has important lessons for policymakers within Pakistan

The US needs Pakistan’s help again to achieve its objectives in Afghanistan, a country with which it has been engaged for almost 17 years with little apparent success. But under President Trump, the American policy is being defined in crude and unsubtle ways. Ever the dealmaker, Trump wants a lot in return for all that he is prepared to give. However, some of his demands on Pakistan cannot be met. Pakistan must look for other ways of finding foreign capital. The Middle East could be a source of financial flows beyond those already coming in as assistance. This is where the book under review becomes significant.

While the flows associated with the China-Pakistan Economic Corridor (CPEC) would certainly help, Pakistan’s long association with the oil-and-gas-rich countries in the Arab world could be turned into a more reliable source of foreign capital. Millions of Pakistanis live and work in these countries. Over the last almost 50 years, they have remitted billions of dollars to their country of origin.

Szelenyi, Hassan and Maksimov suggest how the savings of these migrants could be turned into investment with the adoption of the right set of policies. I will get to the book’s policy recommendations later in this review. At this point, I will describe how the material for this book was gathered by the authors, why they chose Pakistan for their fieldwork and the hypotheses they set out to test.

The three authors have studied the United Arab Emirates’s use of non-nationals to build the Arab nation. The UAE was formed in 1971 with the merger of seven small princely states a couple of years before they saw their incomes increase exponentially with the explosion in the price of oil and gas. They spent a good part of this windfall income to build a modern economy and improve the standard of housing for the native population. This could be done only with the import of millions of unskilled workers, mostly from South Asia.

“The birth of the new nation had to resolve the problems of how to merge various tribal identities into a common Emirati identity and retain such identity at a time of massive influx of typically non-Arab, overwhelmingly non-native Arabic speakers,” write the authors. “Many of them were South Asians and often they were even non-Muslims (Hindus, Christians, Buddhists or people of other religions).” Within a decade or so, the natives constituted a small minority in the total population. By the 2003 census they represented just over 20 percent of the population; by the 2011 census the native population had declined to just over 10 percent of the total. How a nation could be built from such diversity posed a real challenge for the rapidly shrinking ruling class.

The book identifies four possible approaches to building nations in these circumstances. The first is the exclusion of natives from the economic and social structures that were built by the newcomers. This was the option adopted by white migrants to the US, Canada, Australia and New Zealand. The second option is to use ‘naturalisation’ to accommodate newcomers. This began to be done in countries that initially followed the ‘native exclusion’ approach — the white colonies ran out of people as the demands of their economies for manpower increased. South Asians were accommodated in North America and Australia. This approach is now being challenged by the US administration headed by President Trump. It may lead to some reductions in the flow of South Asians to the US.

The third option is to build trans-nationalist migration regimes where multiple citizenships are permitted. This is the model that evolved as European nations created the European Union (EU). As was seen in the United Kingdom’s move to opt out of the EU, this approach produces reactions among some segments of the native populations that were economically hurt by the arrival of large number of migrants. These tensions not only resulted in Brexit, but also led to the rapid rise of Islamophobia in the European continent since a significant number of newcomers were of the Islamic faith.

Finally, there is the strict migrant-exclusion approach as has been adopted by the Arab monarchies. Non-nationals are admitted only temporarily with no promises or institutions to ever grant them citizenship. It is expected that “guest” migrants (and even their children born in the countries in which they work) will return to their home countries once their services are no longer needed. The authors conclude that this model is not viable in the long run, especially when it institutes major changes in the structures of the countries’ economies. This has begun to happen.

As the economies of the oil-exporting countries mature, they move into areas in which the nature of demand for more skilled workers will inevitably increase. How should Pakistan — which is in great need of foreign capital — respond to avail this opportunity? This will require changes, some significant, in the making of public policy. The country needs to invest more in producing the skills needed by the Arab world. As the oil-exporting countries diversify their economies, they will need highly skilled workers that they cannot get from the local population. These people will be available from South Asia — Pakistan included. Islamabad, working with the private sector, would do well to create skills the Middle East will need. Once this type of flow increases, it would be productive to create opportunities for this type of migrant to invest in their home country. This will require a change in the country’s own immigration policy by allowing dual nationality.

The authors conducted hundreds of interviews in Pakistan, talking to those who had gone to the UAE but returned after completing their time-bound assignments, as well as those who were getting ready to leave for the Middle East. Their three findings should be of interest to policymakers as well as to those who study social and economic change.

One, most migrations are the result of family pressure when parents and other relatives of able-bodied young men, having seen a large inflow of money into their village from those who have gone abroad, pressure them to find jobs in the Middle East as well. Two, most job placements are done by people who have preceded and built some contacts in the places where they work. But getting to the new place of work requires financial resources which are provided by friends and relatives with the expectation that not only will the money they have provided be paid back, but will come with a decent return. There is scope here for the banking system to play a role. For that to happen, the State Bank of Pakistan will need to change its regulatory system. Three, the migrants — having worked in a multi-ethnic and multi-cultural environment — develop greater tolerance for those different from their own social and religious backgrounds. This last aspect should be more advertised, perhaps by the government finding a way to conduct the type of research that has resulted in the writing and publication of the book under review.

The reviewer is an economist, formerly with the World Bank

Published in Dawn, Books & Authors, April 29th, 2018