Labour migration from Pakistan to the Gulf Cooperation Council (GCC) countries has been a major source of both employment for Pakistani workers and foreign exchange for the country. The export of human resource started picking up in the early 1970s when people started moving to the Gulf region following a boom in the oil and construction industries there. The then prime minister sought good relations with the Muslim states and urged their governments to employ Pakistani workers in large numbers.

Pakistani workers abroad are mostly employed as unskilled or low skilled work force and the share of highly skilled or highly qualified Pakistani workers is very small. Several programmes aimed at imparting technical and vocational skills to the youth have been launched in the country but unfortunately not linked to international markets and their needs. Resultantly, the recruitment for migrant labour has remained unregulated and private players dominate the scene through sale and purchase of work visas turning this into a lucrative business. As a result those who can afford to bear the cost of migration proceed abroad even without any skills while those having suitable skills are stranded.

This is an important issue because low-skilled people can only find low-paid jobs. This results in lower remittances than in the case of countries whose labour is highly skilled and highly paid.

The current situation is quite alarming because of the global economic slowdown caused by Covid-19 and the inability of host countries to retain migrant labour as many development projects are stalled indefinitely. For example, the pandemic has adversely affected development activities related to the Qatar FIFA World Cup, Dubai Expo 2020 and Saudi Arabia’s Vision 2030 plan, as well as the tourism sector of Dubai, which is its main source of income. The questions that haunt many then are what will be the fate of laid-off workers on manpower exporting countries like Pakistan; how will this impact the foreign reserves especially as commodity exports too are likely to decline.

Remittances by workers abroad reached a record high of $23.1 billion in fiscal year 2020. This figure was $21.74 billion in fiscal year 2019 and $19.62 in fiscal year 2018. Besides, the remittances saw an increase of 7.8 percent during the March-June 2020 pandemic period as compared with the corresponding period of the year 2019. Seen in isolation, it would appear that Pakistani migrant labour has survived the major economic shocks caused by the pandemic but analysts believe that this is not the case.

The Economic Survey of Pakistan 2019-2020 has declared the phenomenon a good development and a much needed support during the pandemic and in a scenario where the estimated GDP growth rate for the ongoing fiscal year has been fixed at negative 0.38 percent

However, it also sets off alarm bells and states that: “Remittances may fall significantly due to lay-offs of Pakistani workers abroad due to economic slowdown internationally. Although, there was a 1 percent increase in workers’ remittances on a year-over-year (YoY) basis in April 2020, and for July-April FY 2020 there is a 5.5 percent growth compared to the same period last year; there is a risk of decrease in workers’ remittances in the future. [Even] more challenging will be the influx of returning migrant workers due to job losses. Similar to global conditions, within Pakistan increase in unemployment is inevitable.”

Dr Mansoor Zeb Khan, a labour market analyst and researcher, points out that the increase in remittances during pandemic and economic meltdown can be for several reasons. He says this trend is not likely to continue for long if conditions remain the same. He says it is believed that expatriates had sent more money home for reasons like families facing a shortfall in incomes during lockdowns; workers being able to send accumulated savings which they could not earlier due to lockdowns; those who were laid off being given additional salaries as per terms of their contracts which they repatriated; turning of more and more people towards sending money back home through official channels in the absence of hundi walas etc.

The Asian Development Bank (ADB) has placed Pakistan among the five worst-affected Asian economies as the inflow of workers’ remittances might drop by a massive 27 percent due to job losses and decline in incomes.

The people who want to shut off their businesses also sent money home so that it may be invested in local businesses once they are back home, he says. Another reason for greater savings was that many workers could not travel to their home countries due to restrictions on international travel and sent these in the form of remittances. The extension of reimbursement of Telegraphic Transfer (TT) charges scheme, which allows expatriates to send remittances free of charge to small remitters by reducing threshold from $200 to $100, also encouraged them to send remittances through official channels.

The World Bank has warned that “Global remittances are projected to decline sharply by about 20 percent in 2020 due to the economic crisis induced by the Covid-19 pandemic and shutdown. The projected fall, which would be the sharpest decline in recent history, is largely due to a fall in the wages and employment of migrant workers, who tend to be more vulnerable to loss of employment and wages during an economic crisis in a host country.”

It says remittances to low and middle-income countries (LMICs) are projected to fall by 19.7 percent to $445 billion, representing a loss of a crucial financing lifeline for many vulnerable households. The remittances are crucial for such countries because “they alleviate poverty in lower- and middle-income countries, improve nutritional outcomes, are associated with higher spending on education, and reduce child labour in disadvantaged households. A fall in remittances affects families’ ability to spend on these areas as more of their finances will be directed to solve food shortages and immediate livelihoods needs,” the World Bank adds.

The Asian Development Bank (ADB) has placed Pakistan among the five worst-affected Asian economies as the inflow of workers’ remittances may be hit by a massive 27 percent due to loss of jobs and drop in income of expatriates, mainly in the oil-producing and exporting nations. The bank has ranked Pakistan fourth number among the likely five worst-affected Asian developing economies after Nepal, Tajikistan and Bangladesh.

According to official statistics during the period ranging from 1971 to 2019, over 11 million Pakistanis have moved abroad for work. Over 90 percent of these labour migrants have found jobs in the GCC countries, with Saudi Arabia and the United Arab Emirates hosting the largest share of Pakistani migrant workers.

Sabir Farhat, secretary general of the Pakistan Rural Workers Social Welfare Organisation (PRWSWO), which works on labour migration in South Punjab, tells The News on Sunday that there was a psychological reason as well behind the higher remittances during the recent months. He says many workers he interacted with feared that the savings that they had stashed in banks and not disclosed to families back home would remain untraced if they contracted Covid-19, and in worst case scenarios, lost their lives.

Farhat stresses that the government must focus on labour migration, prepare the work force for high-wage and high-skilled jobs, and explore more markets if it wants to increase remittances to the country. “This responsibility lies with the federal government. The provinces can train workers in high-skilled jobs and share their details.” Currently, he says, Pakistani workers mostly find jobs as construction workers, masons, drivers etc. Their share in hospitality industry, engineering jobs, marketing and other sectors is limited.

Muhammad Yousaf, a Pakistani worker based in Dubai, hopes that lost jobs will be won back once the economies rebound. He insists that a lot more needs to be done to encourage workers to send their remittances through official channels. “At the moment, very few bank branches are allowed to send remittances to Pakistan and workers have to travel long distances from labour camps to reach those.” He says he has to travel a long distance to a specific bank branch, where he has to pay a parking fee for his car, and then walk to the branch to process his request.

On the other hand, he says, hundi walas visit labour camps and operate in markets and offer better exchange rate to those willing to send money home. He says people have been affected by pay cuts, and are now forced to do the work previously done by the laid-off staff. All this has taken a toll on their mental health.

The writer is a staff member. He can be reached at shahzada.irfan@gmail.com