Presently, remittance constitutes an important portion of the Gross Domestic Products in various states. The United Nations projects that between 2015 and 2030, a predicted US$ 6.5 trillion in remittances will be sent to low and middle-income states. The World Bank statistics identified that the major 5 remittance recipients worldwide during 2016 were India, China, the Philippines, Mexico, and Pakistan whereas as a share of GDP, however, the major 5 recipients were Kyrgyz Republic, Nepal, Liberia, Haiti, and Tonga.
According to the present statistics of State Bank of Pakistan (SBP), Pakistan received remittances amounting to $1.576 billion in November 2017, which is 2.57 percent lower as against with $1.618 billion the country received in the corresponding month of the previous year.
The total, overseas Pakistani workers remitted $8.021 billion in the first five months (July to November) of FY2018, gain 1.28 percent as against to $7.919 billion received during the corresponding period of the preceding year. During November 2017, Pakistan attained $213 million in remittances from the UK, which is 10 percent larger than $193 million that Pakistan received in the corresponding month of the last year. Similarly, the rise was also recorded in remittances coming from the US as Pakistan received $204 million from the US during November 2017, gain 5 percent as against to $194 million in the corresponding month previous year. SBP mentioned that the overseas Pakistanis living in EU (European Union) sent back $49 million during November 2017, gain 32 percent as against to $37 million in the corresponding month of previous year. Remittances from Saudi Arabia and the UAE – the two most important sources of remittances for Pakistan in the Gulf – are continuously declining because of Saudi Arabia and GCC policies. Pakistan attained remittances of $409.5 million from Saudi Arabia during November 2017, down 12 percent as against to $465 million in the corresponding month of 2016. Similarly, Pakistan received $353 million from the UAE, down 2.75 percent as against to $363 million from the corresponding month of the previous year. Remittances coming from the GCC countries remained almost flat. Pakistan received $192 million from the GCC countries during November 2017 as against to $193 million in the corresponding month previous year.
Present studies mention that the number of Pakistani workers going to Gulf Cooperation Council (GCC) is on the decline, fuelling fears of a consequent decline in remittances from there, chiefly at a time when the entire region in general and Saudi Arabia in particular is undergoing dramatic economic and political changes.
Pakistan’s remittances from the GCC (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE) started growing rapidly from 2002, partly owing to post-9/11 developments and increased manpower export to that region. But from 2014, statistics shows that our manpower export to UAE has been on the wane. And from 2015, the same has been the case with Saudi Arabia.
Though Pakistan has not yet experienced any major setback in remittances’ flow from UAE and Saudi Arabia states, some signs of weakening are quite visible now. If we look at yearly remittances from Saudi Arabia, no big change has occurred in the previous 5 years despite the fact that our manpower export to that country has seen a falling trend after 2015. Statistics also shows that a main cause is that remittances coming from the greater than 2.0 million Pakistanis already working in the kingdom and fluctuations in manpower export for 1 or 2 years cannot majorly disturb remittances.
However, 2017 is unique because during the first 9-month of this year our manpower export to Saudi plunged to less than 25 percent of what it was in last year. Such a big fall is bound to affect the inflows from there. In the 9-month through September, our manpower exports to the UAE also declined but less steeply than in the case of Saudi Arabia.
Besides, many Pakistanis who go to the UAE for career/job find opportunities of doing their own part-time business far easily than in Saudi Arabia. Dissimilar sources also mention in their reports that another thing that may offset a falling trend in remittances from the UAE is that many Pakistanis previously settled and employed in the United States, Britain or Canada have moved to the UAE. The lifting of the ban in 2016 on manpower exports to Kuwait has yet to make any important impact, despite tall claims of the government.
No doubt, remittances play a main role in stabilizing Pakistan’s external sector, as they make up almost half the import bill and cover the deficit in the trade of goods account. Many states are reshaping their economic policies would impact on our countries remittance in future.