LAHORE: A report prepared by a private educational institute has disclosed that outflow of Pakistani migrants to the United Arab Emirates (UAE) declined drastically from 33.8 per cent in 2019 to 9.6 per cent in 2021, which is contrary to the historical trends.
It further reveals that remittance inflows from the UAE and Saudi Arabia increased at a lower rate in 2020-2021 compared to 2019-2020. The report declares the latest statistics worrisome as the two countries are the largest recipients of migrants and senders of remittances to Pakistan.
State Bank of Pakistan acting governor Dr Murtaza Syed was the chief guest at the launch of the Pakistan Migration Report 2022 at the Lahore School of Economics (LSE), Barki Campus, on Thursday.
The report is second in the series published biennially by the Centre on Migration, Remittances and Diaspora (CIMRAD) LSE. Graduate Institute of Development Studies (GIDS) and CIMRAD Director Dr Rashid Amjad opened the proceedings of the launch.
According to the report, it is unlikely that the surge in remittances witnessed during 2020 and 2021 will sustain. While the shift in inflows from informal to formal channels and the new initiatives during Covid-19 period were able to increase the average monthly inflows to around USD 2,500 million, the impact of these factors has been diminishing and inflows are slowing down.
Deteriorating economic conditions and political environment discourage investment-oriented inflows, the report warns, adding that this aspect demands consideration given the over reliance on these inflows.
Migrant outflows to the United Arab Emirates (UAE) declined drastically from 33.8 per cent in 2019 to 9.6 per cent in 2021, which is contrary to the historical trends. Correspondingly, remittance inflows from UAE and Saudi Arabia increased at a lower rate in 2020-2021 compared to 2019-2020.
The report highlights the above observation as worrisome as the two countries are the largest recipients of migrants and senders of remittances to Pakistan. It also mentions that about half of Pakistani labour migrants continue to be low skilled or unskilled, while the planned demand for such workers is shrinking in Saudi Arabia and the UAE.
In terms of new migrant destinations, Pakistan has not made much progress. Malaysia that was considered as an emerging market showed a declining trend following the pandemic. Japan and China could be important destinations in the future but remain numerically insignificant as of 2021.
Dr Syed lauded the efforts of the LSE in producing the exclusive report on migration and remittances and emphasised on the critical role of remittances sent by overseas Pakistanis in sustaining the external account of Pakistan. Over the past 10 years, on average 91 per cent of the country’s merchandise trade deficit has been financed by remittances.
State Bank acting governor highlighted that monthly remittances received by Pakistan have consistently exceeded 2 billion US dollars from June 2020 onwards despite Covid-19 and ensuing lockdowns.
Dr Syed also identified three policy gaps including mismatch in the skillset of workers going abroad from Pakistan and the type of job openings abroad, need for improvement in financial literacy of population to enhance individuals’ trust in the formal financial system and increasing coordination and collaboration between the public and private sectors to identify and resolve bottlenecks.
Forman Christian College Rector Dr Jonathan S Addleton pointed out that over the years Pakistan’s migration dynamics have been dominated by recurring themes of low skill level of labour migrants and outflows concentrated in districts of Punjab and KP. Also in terms of destination countries, the Gulf has remained amongst the top host countries, consistently.
Dr Amjad emphasised on the need to focus on policies to address challenges of informal remittance inflows and illegal migration.
According to previous estimates around 57 per cent of remittance inflows are through the informal channels. He also highlighted data constraints and stressed the need for access to more detailed data for carrying out more rigorous analysis.
Other speakers GIDS and CIMRAD Coordinator Prof Dr Nasra Shah and Almazia Shahzad were also present.
Published in Dawn, July 1st, 2022