For Pakistan, remittances vs. brain drain reveals broken mass exodus narrative

For Pakistan, remittances vs. brain drain reveals broken mass exodus narrative

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The number of overseas Pakistanis – those having either permanently migrated or out of the country temporarily for work – recently crossed the astonishing landmark of 10 million. For comparison’s sake – over 120 individual countries of the world have populations less than this number!
This is the largest diaspora in the world behind only Indians, Chinese, Americans, Russians and Mexicans. Most non-resident Pakistanis work in the Gulf states while there are sizeable numbers in the US, UK and Scandinavia. Nearly a million Pakistanis left the country in 2023, and over 300,000 in the first half of 2024 alone.
Most agree that growing outflow is an outcome of Pakistan’s general drift and lack of focus on tackling challenges of modern statecraft. The country barely escaped formal default last year and is currently struggling to secure a lifeline bailout from the IMF. Thanks to a troubled economy and unending political uncertainty that is diminishing hopes in a brighter future for millions, the unusual emigration translates into a ‘voting with the feet’ in the country’s ability to protect their interests.
But the question is, is being the sixth largest diaspora in the world a leverage or a liability? In many ways the acute political polarization of national politics is being projected to wherever Pakistanis are in large concentrations – especially in the UK and US. The diaspora is split into bitter camps demonizing each other.
Over the past few years, supporters of Nawaz Sharif’s party PML-N and Imran Khan’s PTI have been clashing in public, often resulting in ugly physical brawls in London and Washington. Last week a near-consensus resolution passed by (an otherwise politically split) Congress in the US questioning legitimacy of recent Pakistani elections was blamed by PML-N as supported by PTI. This polarization within the Pakistani diaspora is hurting Islamabad.
None of the four different governments in four years have expressed concern about this mass emigration probably because remittances from overseas Pakistanis constitute to be the single biggest source of revenue in the national budget other than loans.

Over the last 10 years, the average annual remittances sent by overseas Pakistanis is nearly $23 billion – 7% of the country’s GDP.

Adnan Rehmat

Over the last 10 years, the average annual remittances sent by overseas Pakistanis is nearly $23 billion – 7 percent of the country’s GDP. By contrast, Pakistan is seeking a $6 billion loan package from the IMF for a 4-year cycle. The contrast in size of these two revenue streams couldn’t be starker.
Perversely, this simple socio-economic equation of ‘let them search for jobs overseas and send money back home instead of providing them employment at home and paying them’ disincentivizes political governments from prioritizing expansion of domestic labor markets. But it is not just workers for the lower end of the wage markets that the country loses but the professional classes that drive the socio-political economy and strengthens productivity.
This is a double edged sword – the ‘cash gain’ by the state is simultaneously a ‘brain drain’ for the country that is sending many of the brightest away, leaving a growing hole in the landscape of entrepreneurship, innovation and professional expertise such as management and socio-economic leadership.
Pakistan needs to fix this broken system that is eroding the trust of even its best and brightest in it. Pakistani political parties keep speaking about the need for a national charter of economy that can create consensus on broad-based socio-political reforms linked to economic development. It’s time they walked their talk. A strategic solution to addressing Pakistan’s brain drain challenge lies in an integrated long-term approach.
This can be a combination of investing in education and research to encourage innovation; creating a favorable business environment to encourage entrepreneurs and professionals to find growth and stability; promoting public-private partnerships to strengthen industries that can absorb skilled workers; introducing skill development programs to enhance employability; addressing political instability to strengthen trust in the system; engaging diaspora to allow successful professionals abroad to contribute nationally; improving social security and health care to disincentivize emigration; promoting remote work to allow professionals to contribute globally and celebrating success stories of professionals who stayed and made a difference as positive narratives inspire others to stay too.

- Adnan Rehmat is a Pakistan-based journalist, researcher and analyst with interests in politics, media, development and science.

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