KARACHI: Every month, Zakia Khatoon, a resident of a remote village in Azad Kashmir, happily travels to Rawalakot, a nearby city, to collect money sent by her husband employed in Saudi Arabia.
“My husband, Tariq Khan, found a job in the Kingdom eight months ago. We were facing a difficult financial period, but things turned around when he flew abroad and started working as a driver,” Khatoon told Arab News via telephone on Saturday.
Saudi Arabia is home to about 2.5 million Pakistanis who have made the Arab state the single largest source of foreign remittances for Pakistan.
Since the opening of Pakistani workers’ entry in the Gulf market back in 1971, Saudi Arabia has remained the top destination for Pakistani workers that has provided jobs to more than 5.7 million of them since then.
The United Arab Emirates (UAE) was the second largest job market for Pakistanis with 3.9 million of them going there since the beginning of the 1970s.
“On an average we receive about $1 billion from Saudi Arabia and the UAE every month which is more than 50 percent of our exports. These inflows not only support our external accounts but also keep the local markets functional through consumption,” Muzzamil Aslam, senior economist, told Arab News, adding: “Consider it a form of export of services that plays a massive role in our economy and prevents the country from going externally bankrupt.”
On Friday, Pakistan’s central bank said that the workers’ remittances during the first nine months of the current fiscal year (9MFY20) amounted to $16.99 billion, implying a six percent increase when compared to $16.03 billion during the same months in the last fiscal year. A quick look at the data revealed that Saudi Arabia and the UAE retained their positions as top contributors to Pakistani remittances with $3.92 billion and $3.55 billion of inflows, respectively.
Despite the coronavirus pandemic and the ensuing lockdowns across the world, Pakistani workers’ remittances in March 2020 increased by 3.8 percent to $1.9 billion when compared to the inflows in the previous month.
In March, larger amounts of remittances were received from Saudi Arabia that went up by 7.2 percent to $452.3 million. The amount received from the UAE also registered 8.6 percent increase and stood at $420.4 million.
However, the country’s overseas employment promoters say the current lockdown in the Kingdom and the UAE, much like rest of the world, has terrified Pakistani workers. They maintain that this will also be reflected in the next remittance inflows that are likely to record a drastic decline.
“A large number of Pakistanis working in the Gulf countries are currently in a state of panic. They are not sure if they will be able to continue or sent back by their employees. Apart from essential services, all projects are completely closed. In April 2020, we expect drastic cuts in remittances,” Ikram Qureshi, convener of the standing committee of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Overseas Employment and Development, told Arab News.
Qureshi said that about 20,000 Pakistani workers with visas were in the process of entering the Kingdom, but the situation had changed and even those working there seemed uncertain about their future.
“It is the right time for Pakistani diplomatic missions and embassies to actively engage with the host governments to secure the future of overseas Pakistani workers. Otherwise, they may face mass layoffs,” he warned.
“The future of more than 2.5 million Pakistanis in the Kingdom and around 1.7 million in the UAE depends on the actions of their government,” Qureshi continued.
Economists fear that any decline in remittance will have a negative impact on Pakistan’s economy, making it likely that the country will default on some of its international financial obligations.
“If there is a slowdown in this area, Pakistan’s per capita income will be reduced and the country may go bankrupt externally,” Aslam warned.
As Khatoon prays for the safety and job security of her husband, Aslam believes that the cordial relations between Pakistan and the Gulf states could minimize the number of Pakistanis losing their jobs.