A Decline in Remittances Portends Ill for Pakistan’s Economy

Pakistan’s economy has long been dependent on two sources: remittances from its diaspora working in the Gulf and in the West and loans from friendly states and international financial institutions (World Bank and IMF).  The first among these, remittances, bring in an annual $15-20 billion for the beleaguered economy.

In April 2020, the World Bank in its issue “Migration and Development” had noted that “remittances to Pakistan in 2020 are projected to decline by 23 per cent, totaling about $17 billion, compared with $22.5bn remitted in 2019, in the wake of the economic crisis caused by the Covid-19 outbreak.”

Covid19 and the resulting oil prices crisis has led to a twofold problem for Pakistan. Not only is Pakistan going to receive fewer remittances but “it has to devise a strategy to accommodate the returning Pakistani workforce from overseas in the domestic job market.”

As an Editorial in Daily Times noted, “No matter how expected a slump in remittances was, news items confirming such fears still make for some worrying reading. That is because knowing about and understanding a problems does not always mean that it can be solved easily. Now, just as the economy is contracting for the first time in many decades – anywhere between negative 0.5 and two per cent, depending on whose analysis you are reading – the time has also come for remittances to begin falling short of the usual number. Financial trauma in the US as well as the Gulf countries, where most expatriate Pakistanis live and work, is now having a very pronounced knock on effect on the Pakistani economy for very obvious reasons.”

Author: Nasir Saeed

Latest articles

Establishment Fooling Pakistanis, again!

For the last 73 years, the Pakistani state has argued that Pakistan and Pakistanis cannot exist with the ‘K’ of Pakistan (Kashmir) becoming a...

India’s Actions in Kashmir Criticized for Human Rights Violations

One year after India revoked Article 370 from Indian occupied Kashmir (state of Jammu and Kashmir), Indian authorities continue to impose harsh and inhuman...

Book Banning and Censorship Exposes Hollowness of ‘Ideology of Pakistan’

Banning books, films, paintings, and poems, and censoring academics and journalists is now old in Pakistan. But in recent times this has taken an...

FATF Sword of Damocles Keeps Hanging Over Pakistan

In 2018, the United Nations (UN) Financial Action Task Force (FATF) -- the international watchdog against money laundering and financing of terrorism ---  placed...

Related articles

Leave a reply

Please enter your comment!
Please enter your name here

Author: Nasir Saeed