Living off the diaspora

Remittances rise, expected to keep rupee stable

The rise in remittances in October was welcome, especially as they exceeded October, which in turn was higher than September. However, theory also highlighted the fact that one of Pakistan’s most important exports, in future perhaps its most important, is labour. The remittances are important to the economy, because they represent a balancing factor, as the country looks to them to balance the current account, and thus enable the country to pay for its imports. At the same time, the remittances are awaited with anxiety by households all over the country, for very few of those who go abroad do not carry expectations from the family they have left behind, that they will send scads of money back home.

There are a number of problems that need to be looked at. First, as the government depends on this money to balance its books, it cannot be indifferent at the quality of the people it sends abroad. This implies it must be careful about the education that its people receive. As it is not known which individual will go abroad, the government will have to provide education to everyone, and of a high quality too, because individuals will need to be better educated than people in the native population if they are to get a job. The government should realise that if other South Asians, like Bangladeshis and Sri Lankans, have undercut Pakistanis in the Middle East labour market, they will soon do in the semi-skilled job market. It may be too late, but the government needs to focus now on highly skilled positions, for which Middle Eastern countries import Europeans, and for which the USA imports Indians. Another question which has not really been answered is what can be done with the money sent home. The answers seem to be conspicuous consumption and real estate. Neither is very productive.

Pakistan should understand that its competition abroad is in the neighbourhood. If in the 19th and 20th centuries India exported indentured labour to Fiji, the West Indies, Mauritius and wherever sugar was grown, South Asia still looks abroad to make its excess population productive. Such measures as giving overseas Pakistanis a greater voice in running the country are no substitute for Pakistan working on sending better labour abroad. Also, it would perhaps help if the government was to accept that it sent labour abroad. Perhaps then it could see the people who do that labour.

Editorial
Editorial
The Editorial Department of Pakistan Today can be contacted at: [email protected].

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