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Migration and Development: Revisiting Pakistan's Experience

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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, …

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.

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  • 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
  • Transcript

    • 1. MIGRATION & DEVELOPMENT: REVISITING PAKISTAN’S EXPERIENCE Safwan A. Khan, Vaqar Ahmed
    • 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$)
    • 7. Top emigrant destinations 0 50000 100000 150000 200000 250000 300000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Numbers Saudi Arabia. U.A.E. Oman
    • 8. Migration by labor type 0 50000 100000 150000 200000 250000 Numbers Year Highly Qualified Highly Skilled Skilled Semi Skilled Un-Skilled
    • 9. Migration by province 0 50000 100000 150000 200000 250000 300000 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Number Year PUNJAB SINDH K.Pakhtunkhaw BALUCHISTAN AZAD KASHMIR N/AREA TRIBAL AREA
    • 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
    • 12. Model specification lnyt = β10 + β11lnkt + β12tmt + β13lrt + u1,t lnkt = β20 + β21lnyt + β22tmt + β23lrt + u2,t tmt = β30 + β31lnyt + β32lnkt + β33lrt + u3,t lrt = β40 + β41lnyt + β42lnkt + β43tmt + u4,t
    • 13. Regression Results • Effect on GDP per capita
    • 14. • Effect on capital stock • Effect on migration numbers
    • 15. • Effect on literacy rate
    • 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
    • 26. Thank you safwan@sdpi.org, vaqar@sdpi.org

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