Development is a complex phenomenon and is affected by a multitude of factors. Over the years, labor mobility, as reflected by migration patterns, has also seeped into the development discourse, particularly in the context of developing economies like Pakistan. This study tries to explore the relation between emigration from Pakistan and socio-economic progress within the country, specifically focusing on per capita output growth, capital accumulation and education, hypothesizing whether and how these variables have been related through the county’s history and their relationship with migration and remittances.
2. Migration and Development: Emerging Debates
• Balanced growth theory (Haas, 2012)
▫ Migration development of human capital
▫ Reverse transfers of money, knowledge, best
practices, technology etc.
• Asymmetric development theory (Haas, 2012)
▫ Migration underdevelopment of the sending
country
▫ Brain drain
• Migration and development: no relationship
(Skeldon, 2012)
3. The Case of Pakistan
• Average growth in annual emigration flows (1970-2011):
7%
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
EmigrantNumber
Year
Emigrant Numbers
Emigrant Numbers
4. Research Approach
• Data
▫ Pakistan Economic Survey
▫ World Development Indicators
▫ Bureau of Emigration & Overseas Employment
• Theory triangulation
▫ As on previous slide
• Methodological
▫ Qualitative methods (Key informant interviews)
▫ Quantitative methods (Time-series analysis)
5. Migration Patterns in Pakistan
GDP growth and emigration (% change)
-60
-40
-20
0
20
40
60
80
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
%
Year
GDP Growth (%)
% Change in Emigrant
Numbers
6. Pakistan: Consumption, savings, and remittance flows
0
20
40
60
80
100
120
%
Year
Gross domestic savings (% of GDP)
Final consumption expenditure, etc.
(% of GDP)
0
2000
4000
6000
8000
10000
12000
MillionUS$
Year
Remittances (Million US$)
10. The number of overseas Pakistanis (2010)
Source: Bureau of Emigration and Overseas Employment (2010)
Africa
2%
Americas
19%
Asia and Far East
3%
Australia and
New Zealand
1%
Europe
28%
Middle East
47%
Region-wise percentage of overseas Pakistanis
(2010)
11. Time-series Analysis
• 3 SLS estimation (Foldvari et. al, 2012)
• Variables used
▫ GDP per capita (lny)
▫ Physical capital stock (lk)
▫ Annual emigration numbers (ltm)
▫ Literacy rate (lr)
• Period covered
▫ 1972-2011
16. Migration & Development: Cross-
cutting Themes
• Overseas exposure and training: qualified diasporas
• Japan: Knowledge and technology transfers due to
increased migration
• Globalized citizenry
• Lack of economic opportunities migration away
from the country
• Pakistani exports 20% higher owing to Pak
diasporas
17. • 1970s and 1980s: Loss in production quality as
qualified personnel moved abroad
18. • The case of illegal migrants: over 33,000 in EU
• Bilateral readmission policies being undertaken by
EU to address illegal migration
• The EU model of increased labor mobility and
increased economic activity
• Two-way migration for reverse transfers and
development
• Malaysia: improved markets lower migration
Labor Mobility and Development
19. • Cluster phenomenon: concentration in sectors of
comparative advantages rather than subsidies
• Exchange programs can be more beneficial for
brain gain
• EU reintegration support fund: to facilitate
migrant settlement in home country; run by
NGOs instead of the GoP
20. Remittances & Development
• Higher remittances inflationary pressures
poverty
• Remittance flows only second to export earnings
• Remittance spending consumption goods and
investment goods
• Use of remittance flows: financing of CAD less
available for expenditure on social services
21. • Positive effect of remittances (Ahmed et
al., 2010)
▫ GDP growth
▫ Household expenditure
▫ Real investment
▫ Poverty
▫ Income inequality
• But need to be aware of ‘Dutch Disease’
22. Conflict & Migration
• Push and pull effects of migration
• Karachi: conflict push migration flight of
capital
• FATA: conflict pull migration source of
livelihoods
23. Case Studies on Returning Migrants
• Faculty at various public and private educational
institutions
• Shifa International
• Omar Saif (SMSall)
• Centaurus
• Rozee.pk
24. Future Outlook
• 2014 withdrawal of US troops from Afghanistan
influx of Afghan migrants
• Push migration likely over the next 5 years
flight of talent
• Competitive markets opportunities for
commercial investments by diasporas
▫ China
▫ India
25. Policy Implications
• Skills training for manpower export high end
skills
• Too narrow a focus on remittances alone
engaging Diaspora in knowledge, ideas and
technology transfer
• Easier transition for returning migrants
conducive business environment
• Diasporas opportunities for export markets
• Competitive markets where Diaspora can enter into
Joint Ventures: ASEAN economies, China, India
Based on Board of Emigration and Overseas Employment (2011)
Naked eye-view: weakly positive relation
The long run economic growth rate has not been much encouraging given the idle capacity in Pakistan’s economy and many have explained this in terms of lacking capacity to generate and retain savings. However we do observe that even in times of falling savings and investment, it was the rising consumption expenditures that cradled GDP growth.
Oman has the least number of Pakistanis (amongst these three), the numbers migrating to the country has been rising steadily. On the other hand, UAE and Saudi Arabia, both of which have higher numbers of Pakistani migrants, have experienced far more fluctuations in the number of Pakistanis immigrating to the countries.
Unskilled and skilled high less gain in terms of reverse transfers. Also, remittance flows end up in consumption rather than investments.
EU example: over 33K illegal Paki migrants in the region currently