The Impact of Migration on Pakistan’s Economy and Society

Perhaps the most significant economic development in Pakistan over the past decade has been the dramatic growth of remittances from the Middle East (see Figure 4.1). Manpower export to the Middle East began on a large scale in 1975. None the less, as one can see from Figure 4.1 a sudden jump in remittances coincided with the first year of the Zia government as the first influx of migrants began to remit their incomes. The rupee value of remittances also registered a sharp rise between 1982 and 1985, on account of the delinking of the rupee from the dollar. During this three-year period, the rupee declined by 52 per cent. This led to a substantial increase in the rupee value of remittances, since the same dollar amount remitted could be exchanged for more rupees. By 1984 remittances constituted the largest single source of foreign exchange earnings; they were four times greater than net aid inflow to Pakistan. Not only did they provide 40 per cent of total foreign exchange earnings, but they also financed 86 per cent of the trade deficit (Pakistan Economic Survey, 1983–4). Their volume, 3.2 billion dollars annually at their peak, was substantial in relation to the size of the economy. The value of remittances has been approximately equal to 8 per cent of GNP. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.