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Manpower export and future prospects of remittances from GCC countries

Human capital is acquiring a more significant role in economic development. In a fiercely competitive international market, industrially advanced countries import cheap, skilled and highly educated professionals to reduce costs and enhance productivity. Labor-importing countries save money on the high cost of skills training and education of professionals. The demand for workers in labor-deficit countries fluctuates with economic cycles but does not perish. Mobility of capital and the growth serve as a magnet for attracting both domestic labor and foreign manpower.

Saudi Arabia and the United Arab Emirates (UAE) host the bulk of the Pakistani labor force abroad and, hence, send the most remittances back to Pakistan. The emigration decline to Saudi Arabia is the most substantial amongst the destination countries for Pakistani workers. However, while Saudi Arabia noticed a decline of 48 percent in overall labor recipients between January to June 2017, other Gulf countries observed a decrease too. A comparison shows that emigration to the UAE was only down 6.27 percent and to Bahrain 4.41 percent over the same period, while Oman decreased by 3.75 percent in comparison to 2016.

Oman is said to have several developmental projects, such as the construction of hospitals, airports and malls, in process. However, according to the Bureau of Emigration, Oman is only taking in migrants as per the designated proportion for these developmental projects. Like Saudi Arabia, its long-term plan is to employ Omani nationals in both private and public sectors. In the foreseeable future, jobs for Pakistanis are going to reduce in Oman as well. Similarly, despite being the hub of trade routes and attracting a considerable number of Pakistanis, Bahrain has reduced the number of Pakistani migrants it employs. However, the country intends to start a few developmental projects in oil, gas and infrastructure, which may encourage migrant worker employment in the near future.

On the other hand, Kuwait showed an increase of 56 percent in labor absorption from Pakistan. According to Bureau of Emigration, it is the semi-skilled and skilled worker categories that are the most in demand in Kuwait. Qatar, too, showed a 20 percent increase in the number of Pakistani migrants last year. Mass development is happening in Qatar as part of its Vision 2030 plan. Pakistanis employed there are mostly on the technical side of construction and development projects. Despite garnering a great deal of media attention in the last four years owing to the human rights violations reported against migrant workers, Qatar is still a thriving destination for migrant workers.

While the Gulf labor market is transforming through taxation and nationalization, a string of one-off projects and events intended to create jobs, including FIFA World Cup 2022 in Qatar, Expo 2020 in Dubai and Saudi expansion plans in Makkah have been announced that will still require a steady stream of foreign labor. Ahead of the football World Cup in 2022 Qatar has emerged as the brightest spot for remittances in the Gulf. The population in Qatar, which has the largest expat population in the Gulf, reached 2.43 million last year, compared to 1.3 million a few years ago, creating robust demand for services like remittances. In Qatar, there have been a lot of investments in infrastructure. Even after the World Cup, things will be in good shape in Qatar.

Pakistan not only needs to invest in a clearer and effective migration policy, but also needs to have an expansive approach. It needs to look beyond Saudi Arabia and the UAE as its only key sources of remittances and regulate migration to other countries, too.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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