KARACHI: Remittances from Saudi Arabia remain the biggest single source of foreign currency inflows from Pakistani overseas workers, providing key balance of payment support to the country, experts say.
Remittances from overseas Pakistanis account for about 8 percent of the country's gross domestic product (GDP). Saudi Arabia has been the top contributor of remittance inflows to Pakistan since the opening of its labor market for foreigners in 1971. Massive employment opportunities and cultural similarities have since then attracted more than 5.7 million Pakistani workers to the oil-rich kingdom.
"Remittances are a major source of balance of payment support to Pakistan. In the last five years, we have received $105 billion, of which Saudi's share was $26.73 billion," Samiullah Tariq, head of research at Pakistan-Kuwait Investment (PKI), told Arab News.
Remittances from #SaudiArabia are more than #Pakistan’s current account deficit amount, says @samigodil, research chief of Pakistan #Kuwait Investment. || #Economy
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Read special by @Khurshid72: https://t.co/d2jHdqYpBe pic.twitter.com/jY38vtSmAO— Arab News Pakistan (@arabnewspk) July 18, 2020
During the outgoing fiscal year, he said, Pakistan received $23.1 billion in remittances, of which the Saudi share was 23.5 percent. "The inflows by May 2020 from KSA were higher than our current account deficit."
"Saudi Arabia is a big job market for Pakistani workers and they have a lot of opportunities there. The saving ratio is high as compared to other countries and this offers them an opportunity to send more money home," said Ikram Qureshi, the Federation of Pakistan Chambers of Commerce and Industry's (FPCCI) convener on overseas employment.
Given the religious affiliations, similar traditions, and brotherly ties between #Pakistan & #SaudiArabia, Kingdom will remain big potential job market for Pakistanis, says Chairman of Overseas Employment Committee of FPCCI.
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Read special by @Khurshid72: https://t.co/d2jHdqYpBe pic.twitter.com/HuIoJhWf2k— Arab News Pakistan (@arabnewspk) July 18, 2020
Religion also plays a role, he added, as by choosing Saudi Arabia, Pakistani workers also get a chance to perform the Hajj and Umrah.
Qureshi expects Saudi Arabia to remain a major foreign job market for Pakistani workers, but said that the nature of the jobs they will undertake is "destined to change" after the COVID-19 health crisis.
The inflows are a major source of economic activity at home, as they help create jobs and generate consumption. Development experts argue, however, that more needs to be done to utilize the inflows for long-term relief.
"The Saudi remittances are no doubt a very valuable contribution to the foreign exchange reserves, but Pakistan has not been able to utilize the huge inflows for the long-term good of the national economy and poverty alleviation through creation of a sort of fund etc.," Dr. Abdul Jabbar Khan, Development Economist and an expert on poverty alleviation, told Arab News.
