Reverse migration: poor return to villages as living costs surge in cities

Policy experts urge tax cuts for low-income households

KARACHI/LAHORE:

Salma Faheem has not spoken to her husband, Mohammad, since June, when he dropped her and their three children off in his home village of Dalma in Khyber Pakhtunkhwa (K-P) because he could no longer afford to have them living with him in Karachi.

Now instead of living in one room in an urban slum with water on tap and a gas-powered cooker, Salma has to walk an hour every day to fetch water and she must cook her family’s meals on a wood-fired stove.  “I hate it here,” she said by phone. “I loved it in Karachi.”

Her husband, Faheem, 33, is not happy either but he feels he had no choice. “In the village, the house is ours so it is rent-free,” he said. “(But) I loved having them around. I miss my children,” said Faheem, who earns Rs35,000 a month as a furniture handler could no longer stretch to cover food, rent and tuition.

Pakistan’s $350 billion economy is in meltdown with low growth, a weak currency and spiralling prices. The pain is being felt most keenly by those living on low incomes in cities. Some have decided that the only answer is to leave or to send their families back to their home villages, where living is cheap.

Like other developing countries, Pakistan is heavily reliant on imports of oil, gas and other commodities, and has been hit hard by the Covid pandemic, the global slowdown that followed the war in Ukraine and floods last year that submerged a third of the country.

High fuel and energy prices have pushed inflation to 31.4% year-on-year in September, up from 27.4% in August, and there is little the new caretaker government, which took over in August, can do to rein in prices.

A $3 billion loan programme, approved by the International Monetary Fund (IMF) last July, averted a sovereign debt default but reforms linked to the bailout, including an easing of import restrictions and a demand that energy and fuel subsidies be removed, have thrown oil on the inflation fire.

The economic crisis is exacerbated by rising political tensions ahead of a national election scheduled for January. With no relief in sight, some people in this nation of around 240 million are cutting costs the only way they can: by moving home to their villages.

“The decision to return to our hometown was not an easy one,” said Waseem Anwar, a water filter and sanitary fittings installer who moved with his wife and five children to the small dusty town of Chowk Marlay – about four hours from Lahore -- in May.

Anwar’s wages could no longer cover rent, utilities, medical expenses and tuition in the city. “Although the work opportunities here [village] are not as plentiful, the reduction in my overhead expenses to about half ... has provided great relief,” Anwar, who now works as a plumber, said.‘Alleviate suffering’

There is no immediate data available on the total number of people who have moved back to villages in recent months, but researchers cite substantial anecdotal evidence based on dozens of conversations with so-called reverse migrants and their relatives.

One reason that hard figures are difficult to come by is because the 2023 Census operation meant the labour force survey, normally carried out every two years by the Pakistan Bureau of Statistics (PBS), has been delayed indefinitely, explained Bilal Gilani, executive director of research firm Gallup Pakistan.

He noted however that other surveys provided evidence of some population movements. “Avoiding rent in [the] city by sending families back to rural areas or avoiding food costs by returning to villages where there is own-grown wheat, and meat and milk through owned livestock provides a cover.”

While the government has said it expects inflation to ease eventually, it warned that prices would remain high in November due to an upward adjustment in energy tariffs and a major increase in fuel prices.

Too little, too late?

A finance ministry official said that the government had rolled out a range of targeted social safety net programmes aimed at income support, food assistance, and healthcare. “We are fully committed to ensuring that the most vulnerable segments of our society are protected during these trying times.”

Policy experts suggest that the government should support poor households by lowering taxes, such as sales levies, in the short term and introducing a targeted subsidy system, which could help narrow the fiscal deficit.

“If even a part of the untargeted subsidy to energy [among others] can be targeted, it would make a big difference,” said Haris Gazdar, director at the Karachi-based Collective for Social Science Research.

Gazdar said that while the recent trend of reverse migration would not have major economic impacts immediately, because workers would likely return to cities once the economy picked up, it could lead to “longer lasting” problems with, for example, many children being taken out of schools.

He urged the government to learn from countries like the neighbouring India, where citizens can enrol for work, such as building roads, digging wells or creating other rural infrastructure, and receive a minimum wage for at least 100 days each year.

He also cited the example of the United States, where social security benefits kick in when someone becomes jobless. “These are responsive systems, which we do not yet have and would need to work towards,” said Gazdar.

It may all be a little too late for those already pushed to the financial limit, people like Muhammad Aslam, Anwar’s older brother, who lives in Lahore. “Mounting financial pressures are beginning to weigh me down,” said Aslam, also a plumber, adding that he owes his landlord three months’ rent.