Labor exports drive the economy

LAHORE:

Pakistan’s export of labor to various regions around the world has become an important aspect of its economic landscape. With millions of Pakistanis working abroad, their contributions through remittances have emerged as a lifeline to the country’s economy, especially in times of economic turmoil. However, the accompanying brain drain raises complex questions about the nation’s future development.

In 2024, 727,381 Pakistanis left the country in search of better opportunities abroad. According to the Office of Immigration and Overseas Employment, this number is almost 15% lower than the 2023 total of 862,625.

A significant number of these workers headed to the Middle East, particularly Saudi Arabia and the United Arab Emirates (UAE), where sectors such as construction, healthcare and IT absorbed Pakistani talent.

These workers sent remittances of $34.634 billion during the calendar year 2024, according to the State Bank of Pakistan (SBP), accounting for a significant portion of the country’s foreign exchange reserves. This marks a 31.36% increase from the $26.37 billion received in 2023, reflecting the resilience of expatriate workers amid global economic challenges.

“Remittances are the backbone of our economy. They help the country pay its external bills at a time when foreign direct investment and exports are under pressure,” said economist Osama Siddiqui. These inflows act as a safety net during economic downturns, ensuring that families dependent on these funds are able to afford basic needs. In addition, they support consumption-led growth, which remains a critical component of Pakistan’s economy. “The continuous flow of remittances has shielded Pakistan from severe balance of payments crises in the past. Without them, the financial strain would have been much worse,” he added.

By comparison, India, with its huge IT sector, received a record $129 billion in remittances in 2024, while Bangladesh collected $27 billion. Both countries have leveraged their skilled and semi-skilled workforce, channeling remittances into economic growth.

India’s focus on sending highly skilled workers to Western countries has enabled it to maintain dominance in global remittance flows. Meanwhile, Bangladesh’s emphasis on low-skilled labor for the Middle East has kept overseas employment numbers high. Pakistan, positioned between these models, faces the challenge of diversifying its labor exports.

While the economic benefits of manpower exports are undeniable, the phenomenon of brain drain presents a pressing dilemma. According to a report by the Pakistan Institute of Economic Development (PIDE), about 200,000 skilled professionals left Pakistan in 2024, seeking better opportunities abroad.

“Obviously, the brain drain is a national tragedy. When our doctors, engineers and IT specialists leave, we lose the very talent needed to drive innovation and growth. But they had the opportunity to acquire skills that connect with the fourth industrial revolution in Pakistan?” asked Sheikh Tahir Imran, a Pakistani living in the US.

On the other hand, he argued that brain drain can have long-term benefits. Overseas Pakistanis play a critical role in knowledge transfer, investment and entrepreneurship when they return or engage in the local economy from abroad. “Many of our expatriates bring back advanced skills and global networks that can be leveraged for national development,” Imran said.

It would be a wonderful thought to have cooperative job opportunities in Pakistan along with equal income and other benefits. However, the reality is different, said Salman Sikander, a British Pakistani national. Pakistan is a third world country, using almost obsolete technology with decades old ways of doing business. “People say it’s a brain drain. It may be, but there are still hundreds of thousands of professionals available in Pakistan. Why aren’t governments and private companies taking advantage of them?” he asked.

“Imagine if today there were very few Pakistani expatriates, how would Pakistan get over $30 billion in remittances? Can we afford to rely on Pakistani exporters who receive benefits from governments through subsidies but are not ready to add any value to the their products?World is a global village now We need Pakistani experts in every country so that they can advance to higher positions like India,” Sikander pointed out.

“The Indian brain drain is huge but they are proud of it. We just had an Indian Prime Minister in the UK, US presidents now have Indian advisers and the IT sector and other think tanks are also dominated by Indians. Because of the brain drain , although Pakistan needs to upgrade its workforce to reach this point, we need to do this for the stable future of our country dreams and opportunities should be to harness those dreams for the collective good of our nation,” Sikander added.