False signals.

Byline: Anjum Altaf

THE prime minister has praised his economic team for an 'economic turnaround' that comprises declines in the current account and fiscal deficits and increases in FDI and remittances. All these are misleading indicators but one is especially egregious and contradictory.

Why is the increase in remittances considered part of the economic turnaround and something that governments consider worthy of praise? Consider an airport conversation with a Pakistani working in Italy and supporting a wife and two children in Pakistan. He used to send the equivalent of Rs50,000 per month in lira for family support; now the equivalent of Rs80,000 is needed to sustain the same expenditures. The increase in remittances is an outcome of greater economic distress in Pakistan. It is a false signal reflecting economic failure, not success.

Before patting themselves on the back for ever-increasing remittances, policymakers should think through this phenomenon with understanding and empathy. Remittances grow for two reasons: individual migrants send back more money and the stock of migrants increases as more Pakistanis emigrate. The explanation for the first component has been provided above; it reflects the economic distress inflicted on working-class families by rapid inflation in Pakistan. But what is the explanation for the increasing number of Pakistanis seeking work abroad? It is the inability of the domestic economy to generate a sufficient number of jobs paying enough to sustain families of individuals entering the labour market. It is again a reflection of economic failure, not success.

Why do the rulers consider increase in remittances praiseworthy?

Consider the miseries inflicted by this phenomenon celebrated as a success of economic policy. In human terms, it involves young men separated involuntarily from their families - parents, siblings, wives, children - for long stretches, often living abroad in poor, exploitative conditions.

Many low-income workers abroad have paid huge amounts to unscrupulous middlemen. A recent ILO estimate puts the amount paid in bribes by South Asian workers in the Gulf at $15 billion. This does not include payments by individuals who are duped and fail to emigrate, inflicting huge liabilities on their families.

Even more tragic is the fate of those who get smuggled abroad and are either abandoned in remote places to be incarcerated in camps or left to suffocate in airless containers or sink aboard flimsy...