Challenges on the remittances' front.

Byline: Mohiuddin Aazim

More Pakistanis went abroad to find jobs in the first nine months of 2019 than in entire 2018 as economic growth slowed down and unemployment rate remained high.

Historical evidence suggests this will lead to increased home remittances.

In Jan-Sept, 430,529 workers went abroad for jobs, up 12.5 per cent from 382,439 people who went overseas in the entire last year. The government is taking pride in this fact and is also promising that it will result in thicker inflows of remittances.

The concentration of expatriate Pakistanis in Saudi Arabia and the UAE makes our inflows too vulnerable

But before pinning our hopes on such promises, let's first see if there is a correlation between an increase in the yearly export of manpower and the ultimate rise in remittances in the near future. In 2008 (calendar year), 430,314 Pakistanis went overseas against 208,733 a year before.

Quite expectedly, home remittances in 2008-09 surged 21pc to $7.81 billion. Again, Pakistan exported an all-time high 946,571 workers in 2015 (calendar year), up from 752,466 a year ago. But what happened then? Home remittances in 2015-16 increased just 6.4pc to $19.92bn.

So a correlation exists between the size of manpower exports and volumes of home remittances.

But if we obtain a 21pc increase in remittances after doubling the manpower export and - and 6.4pc growth in inflows after increasing manpower exports by no less than 25pc - the issue requires a deeper analysis.

It makes one thing clear: gains in home remittances via additional exports of manpower are very little per person. That compels one to look at the ratio between unskilled labour and semi-skilled workers, skilled workers, managers and professionals who leave the country each year for jobs abroad.

In 2015, their respective shares were 39.3pc and 60.7pc. And in the first nine months of this year, these are 39.4pc and 60.6pc, according to the Bureau of Emigration and Overseas Employment. So as a rule of thumb, we should not expect any dramatic increase in remittances in the near future just on the basis of larger exports of manpower.

When it comes to projecting the volume of remittances, a number of variables become important like the total size of a country's diaspora and its distribution across geographical locations and occupational lines, yearly exports of manpower and its quality, economic situation in host countries and the treatment of immigrant workers there as well as the...