Why Pakistanis Are Desperately Seeking a Future Abroad

Writer : Syed Salman Mehdi

Key Facts (Summary):

• Economic Collapse: Pakistan faces hyperinflation, currency devaluation, and political instability, driving a mass exodus.
• Over 450,000 Departures: In the first quarter of 2023 alone, more than 450,000 Pakistanis sought opportunities abroad.
• Visa and Passport Applications Surge: Passport offices and visa application centres report an unprecedented surge in demand, with over 45,000 daily passport applications.
• Youth Migration: A significant portion of the outflow comprises young Pakistanis seeking scholarships or jobs abroad.
• Remittances Grow: Despite the brain drain, remittances remain a critical economic lifeline for Pakistan.
• Saudi Arabia: Currently, about five million Pakistanis work in Saudi Arabia, with talks to increase this number under Saudi Vision 2030.
• IELTS and Visa Tests: There’s a marked increase in IELTS and UK visa tests as more Pakistanis seek educational and work opportunities overseas.

The Migration Surge: Why Pakistanis Are Leaving

Pakistan is witnessing an unprecedented wave of migration driven by economic hardships and political instability. In just the first quarter of 2023, more than 450,000 Pakistanis have left the country, seeking better opportunities abroad. This mass exodus is visible at passport offices and immigration centres nationwide, where queues are longer than ever before. The uptick in migration is mostly attributed to young Pakistanis who are either pursuing educational scholarships or seeking employment opportunities overseas.

A senior official from the Passport and Immigration Department noted that the daily applications for passports have surged to over 45,000—almost double the previous numbers. The department, which has the capacity to process about 25,000 to 27,000 passports per day, is now facing a backlog of approximately 13,000 to 15,000 applications daily.

One of the key reasons for this surge is the expiration of a large batch of 10-year passports, initially issued in 2013 under former interior minister Rehman Malik’s tenure. A significant number of passport seekers are renewing these long-expired documents in a bid to leave the country.

The Economic Collapse

The economic meltdown is a significant factor contributing to the massive outflow of Pakistanis. Hyperinflation, political turmoil, and currency devaluation have made it increasingly difficult for ordinary citizens to make ends meet. According to a recent report, inflation reached a staggering 38% in mid-2023, and by January 2024, it still hovered at 30%. With the Pakistani Rupee plummeting due to policies enacted by the State Bank of Pakistan under IMF guidelines, consumer prices skyrocketed, leaving millions struggling to survive.

Pakistan's heavy reliance on imported food and fuel, along with dwindling foreign reserves, has further exacerbated the crisis. The country's foreign reserves dropped to a mere $4 billion, insufficient to cover even a month's worth of imports. The government's emergency loans from Saudi Arabia and the IMF only provided temporary relief, as Pakistan continues to grapple with $125.7 billion in external debt and faces $24.6 billion in repayments by the end of June 2024.

The country’s tax collection woes only add to its problems. With tax revenue at a meagre 10% of GDP, Pakistan is one of the worst global performers in tax collection. This shortfall in revenue limits the government's ability to repay loans or fund state-owned enterprises, perpetuating a vicious cycle of borrowing and debt accumulation.

Impact on the Youth

Young people are disproportionately affected by Pakistan's current economic crisis, and they are increasingly turning to opportunities abroad. The British Council has reported a surge in applications for IELTS and visa tests, with about 2,500 applicants sitting for the IELTS test weekly. In addition, UK VIA visa tests are increasingly popular, with 600 applicants appearing each week.

Many young Pakistanis, particularly those from middle-class and educated backgrounds, are opting for scholarships and job opportunities abroad, primarily in Western countries or the Middle East. The Middle East, especially Saudi Arabia, remains a top destination, with five million Pakistanis already working in the Kingdom, contributing significantly to Pakistan's foreign remittances.

Political Response: Opportunities Abroad

While many decry the brain drain, some officials, including caretaker Prime Minister Anwaarul Haq Kakar, see potential in the migration trend. According to Kakar, the exodus presents both a challenge and an opportunity, as Pakistanis working abroad will continue to contribute significantly through foreign remittances. He also emphasized the need for professional and vocational training programs aligned with international market demands.

Special Assistant to the Prime Minister on Overseas Pakistanis, Jawad Sohrab Malik, has urged Saudi Arabia to accept over one million Pakistanis annually as part of Saudi Vision 2030, which aims to modernize the Kingdom’s workforce. This move is expected to bolster remittance inflows, which remain a critical lifeline for Pakistan.

The Role of Remittances

Remittances from overseas Pakistanis continue to play an indispensable role in keeping the country’s economy afloat. In 2021, during the height of the pandemic, Pakistan received a record $31.1 billion in remittances. As of 2023, remittances account for nearly 10% of Pakistan’s GDP, much higher than the South Asian average.

Economists distinguish two primary motives behind remittances: altruism and speculation. Altruistic remittances increase when households in Pakistan face tough times, such as during inflationary spikes. On the other hand, speculative remittances rise when Pakistanis abroad send money home to take advantage of investment opportunities. Both motivations remain strong drivers of remittance flows, which are expected to remain significant going forward.

Policy Solutions and Future Outlook

To counter the negative effects of migration and brain drain, the Pakistani government must implement stronger policies. First, tax reforms are crucial. Taxing agricultural income and real estate, two sectors currently enjoying exemptions, would go a long way in increasing the state’s revenue and repaying the country’s mounting debt. Furthermore, reducing subsidies and enhancing vocational training programs for international job markets would ensure that Pakistan’s workforce remains competitive abroad while still contributing to domestic growth through remittances.

While the exodus continues, many experts believe that the situation could stabilize with the right economic policies and a more stable political landscape. Until then, migration for better opportunities abroad will remain a defining trend in Pakistan’s socio-economic landscape.

References:

• Raza, Syed Irfan. “Number of Pakistanis Looking for Opportunities Abroad Surges.” Dawn, 22 October 2023.
• Sathe, Tarini. “The Struggles of the Pakistani Economy.” Modern Diplomacy, 31 January 2023.
• Hussain, Asad. “Pakistan and IMF Reach Deal for Releasing $700m.” Al Jazeera, 16 November 2023.
• Maini, Tridivesh Singh. “Pakistan’s Elite and the Current Economic Crisis.” Modern Diplomacy, 31 January 2023.
• “Investing as a Pakistani Expat: How to Build Your Financial Future Abroad.” ACE Money Transfer Blog, 23 October 2023.