Remittances and Their Role in National Economy - July 11, 2011

Pakistan’s dependence on remittances is constantly increasing in the wake of lower export earning and constantly rising import bill. Remittances are helpful in filling this large financial gap of income and revenues.

Although Government of Pakistan has maintained no database of Pakistani diaspora, it can be roughly estimated as eight million Pakistanis living and working abroad. Around 5 million Pakistanis are in the Middle East, 1.2 million in UK and 0.9million in USA. The World Bank estimated that Pakistan had received remittances worth USD8.7 billion in 2009 while State Bank of Pakistan is predicting these to reach USD12 billion in 2012. The data in 2009 also shows that remittances were equivalent of 5% of Gross National Income of Pakistan, a proportion higher than the average in South Asia.

As argued by the writer, remittances are playing a positive role in Pakistani economy where at one hand these are helping in reduction of poverty (only if unskilled workers are migrating in large numbers) and helping the national economy in current situation when it has limited access to other sources of finance (be it USA, China, IMF, ADB etc.)

Source: Published in The Dawn, July 11th, 2011 "Remittances and the Pakistani diasporas"