Overseas job loss fears

Remittances from abroad are a major source of foreign exchange for our country. The full-year remittances — at $23.10 billion in FY20 — nearly equal the sum total of our exports proceeds and FDI inflows, hovering somewhere around $22 billion and $2.5 billion respectively. With the successive governments terribly failing to find foreign markets for local products, and attract foreign investors to the country, the inflows from the 9 million-strong expatriate community remains a very valuable support to our foreign exchange reserves. However, this major source of earning is in for quite a significant hit.

A report from the SBP has warned about the possibility of forced repatriation of overseas workers in the Gulf region — which “could create grave problems for the economy” — for a variety of reasons, including 1) the reigning Covid-19 crisis that has forced companies to contract; 2) the contraction in demand of foreign workforce because several Middle Eastern countries are pursing internal reform processes and taking steps to encourage recruitment of local workers; and 3) a dull crude oil market that has further weakened the economic outlook of oil-exporting economies.

The report says that around 50,000 Pakistani migrants have already suffered layoffs in different countries, and there jobs may not be recovered in the short term. Another 50,000 emigrants, excluding those holding Azaad Visa, have re­­turned to the country on paid or unpaid leaves as of June 20, with their job continuation entailing risk. Apart from that, the recruitment process for more than 100,000 overseas jobs was disrupted due to Covid-19, with job-seekers having to wait for the projects they were being recruiting for to be revived.

As the central bank does not see a complete return to pre-Covid migrant employment levels at least over the next two years, the government must not waste any more time to evolve a comprehensive migration policy to deal with the situation.

 

Published in The Express Tribune, November 23^rd, 2020.

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