Remittances and returns
A LARGE chunk of people born in developing countries like Pakistan will not work at home. Chasing jobs, they will go to other places and from there send back the cash that keeps the economy at home functioning.
Just how large these numbers are in the developing world was revealed in a recent World Bank report, which estimated a 5pc increase in the amount of remittances that will be sent to developing countries in 2014. Such remittances are expected to reach $435 billion in 2014 and $454bn in 2015.
Countries like India are major labour exporters, with nearly 14 million people working abroad and sending back nearly $71bn a year. For smaller countries like Nepal, Tajikistan and others, remittances count for as much as 42pc and 29pc respectively of their entire GDP.
For Pakistan, remittances in the past year totalled approximately $17bn, which represented a robust increase. These remittances are crucial to the country, representing the economy’s main source of foreign exchange. According to the World Bank report, they sustain the country’s balance of payments, representing half of its imports.
Pakistani workers abroad can be a source of economic rejuvenation at home.
Not only is Pakistan’s exported labour force contributing to the country’s liquidity in terms of foreign exchange, it is also responsible for the largest chunk of aid that is sent back to the country after natural disasters. While data on this year’s floods are not available, in the aftermath of the August 2010 floods, a 19pc increase in remittances was seen in the latter half of the year. This year’s floods are expected to cause a 16.6pc increase in remittances.
The data should provoke some rethinking on the part of Pakistan’s policymakers. One of the report’s most salient points is that development no longer occurs along the model of attracting foreign direct investment to the country. To state the obvious, Pakistan’s myriad security issues are unlikely to spur a boom in this sector.
Like other countries facing conflict and instability, Pakistan’s best bet to energise its economy is to promote what is already happening: labour export as a means of poverty alleviation. Pakistani workers abroad, having strong relationships to their homeland, are proven by these statistics to be the most reliable source of investment and economic rejuvenation in the country.
At the global level, the numbers should also induce a rethink of development aid as a means of poverty alleviation in developing countries like Pakistan. Unlike development aid that is centrally planned and often unable to envisage local needs and conditions, remittances from foreign workers can promote sustainable models with significant community participation. The schools and hospitals built by the Pakistani diaspora are in this sense far more successful in promoting real change than the bureaucratically and politically constrained billions in development aid that remain stuck in Islamabad and benefit a small cadre of middlemen.
None of these realities is particularly novel. Yet, instead of creating policies that would promote the labour export model, political and social policies in Pakistan are largely directed towards ignoring and alienating foreign workers.
First, the issue of rich politicians having access to foreign passports is often conflated with the issue of poor workers who are forced abroad because of a lack of jobs at home. The resulting ethnocentrism, avidly promoted by failing politicians at home, imagines all those working abroad as lacking in loyalty or patriotic fervour. This is in stark contrast to strategies even next door in India, whose travelling prime ministers make it a priority to cavort with thousands of expatriates in dazzling galas. No such love, of course, is available for Pakistani workers abroad.
Prejudice is an intangible burden imposed on the Pakistani foreign worker; another, more tangible, torture is the dismal state of consular services available at Pakistani missions in other countries. Some years ago, when several countries including the UAE began requiring machine-readable passports, no machines to produce these were available at Pakistani consulates. With the short vacation times, this meant either long delays in visiting home or the prospect of getting stuck at home while a machine-readable passport made its way through the domestic bureaucracy.
While machine-readable passports are now being issued at Pakistani missions abroad, it seems that the remittances are not able to convince the government to ensure that the processing time for passports at some embassies is streamlined so that Pakistanis do not have to undergo long delays in the procurement of the document. If the governments of receiving countries impose discrimination and condescension upon arriving Pakistani workers, their own, it seems, is hardly better.
Passports are the least egregious of the sagas of neglect that can be narrated by Pakistanis who turn to their embassies for support when they face difficult situations in foreign countries. Given the lack of consideration afforded to remittances in Pakistan, the predicament of foreign workers is never on the agenda when bilateral relations between this or that country are being negotiated.
Unlike development aid, remittances cannot be pocketed by the government of the day, and used to finance businesses of sons and uncles. Consequently, administrations past and present continue to focus on procuring development aid packages that can pad their pockets instead of negotiating better conditions for exported Pakistani workers who send back money to their families and communities.
Labour export is not Pakistan’s provenance alone. Data shows that South Asia and Southeast Asia will continue to remain hubs of labour mobility in the years to come. Exile for the sake of a job is not an emotionally promising prospect, but it is a pragmatic, if unwelcome, reality. Given its increasing contribution both to the development and sustainability of the country, it is time that cultural, social and policy resources were developed to reflect a country whose people must earn elsewhere but spend largely in and on Pakistan.
The writer is an attorney teaching constitutional law and political philosophy.