Exodus From Pakistan: 1.62 Million Emigrated in 2023

[Riaz Haq]

Pakistan had a net negative migration of 1.6 million people, the highest of all countries in 2023, according to the World Population Prospects 2024 report released by the United Nations. Other Asian nations like India (-980,000), China (-570,000), and Bangladesh (-550,000) are also far up the ranking. Pakistan's figure of 1.62 million includes 541,000 Afghans who were expelled from the country last year. Net migration is the net total of migrants during the period, that is, the number of immigrants minus the number of emigrants, including both citizens and noncitizens.

Top Countries Losing People to Emigration. Source: Visual Capitalist

Pakistan Bureau of Emigration and Overseas Employment data shows that 862,625 Pakistanis went to work overseas, mostly to Gulf Arab nations, in 2023. The US government granted 16,320 immigrant visas to Pakistani nationals. Another 11,861 immigrant visas were given to Pakistanis by the Canadian government in the same period.  The total number of new Pakistani immigrants admitted as permanent residents in North America in 2023 was 28,181. It is likely that a similar number of Pakistani migrants arrived in Europe last year. Altogether, the total number of Pakistanis emigrants adds up to about a million. The remaining 600,000 are most likely non-citizens deported from Pakistan. 

With a growing share of the working age and insufficient job opportunities, South Asian nations of India, Pakistan and Bangladesh are among the largest labor exporters in the world. 

Dependency ratio, defined as the percentage of children and retirees to the working age population, is rapidly declining in Pakistan (current dependency ratio is 69.03%) and the rest of the developing nations of Asia and Africa. This demographic shift means that the world's richest and most powerful nations with the largest share of working populations will no longer be in Europe and North America by 2050. Among South Asian nations, Bangladesh has already joined the list of top 10 nations in terms of the largest share of the working age population. India and Pakistan are expected to join it by 2050. Increasingly better educated working age population is expected to significantly enhance their productivity and increase their incomes. 

Shift in Share of Working Age Populations. Source: NY Times

The total dependency ratio reported for Pakistan in 2022 is 69.03%, much higher than Bangladesh's 47.09% and India's 47.5%, according to the World Bank.  Dependency ratio for China is 44.96% but it is rapidly increasing.  China's share of the working age population will no longer be in the top 10 by 2050 due to its aging population, according to the UN projections. 

Declining Dependency Ratio in Pakistan. Source: Trading Economics/W...

Global Age Dependency Ratio Map. Source: World Population Review

New York Times' visual journalist Lauren Leatherby recently described this major demographic and economic shift in the following words: "The richest most powerful countries today have long had these really large working-age populations. And economists agree that that’s been a huge, huge advantage economically and geopolitically. And meanwhile, a lot of developing nations have had quite high dependency ratios having a high number of children compared to working-age people. And so, I think we know a lot of these storylines one by one, but putting it all together, it’s just like the world is going to shift really dramatically". 

Current Share of Working Age Populations. Source: NY Times

"And then I think what we see (rapidly aging population) in Japan today is only the tip of the iceberg. A lot of East Asia, China, Europe, South Korea will be much older than Japan is today, in just you know, 20 or 30 years. Some countries will have upwards of 40% of their population that are 65 or older in just two or three decades. And meanwhile, on the other end, you have a lot of these other countries that have long been, you know, hindered economically by their age structures. And suddenly a lot of them will start to enjoy the exact same age structures that Europe and East Asia, the U.S., that a lot of those countries have historically enjoyed", Leatherby added. 

Prijected Share of Working Age Populations in 2050. Source: NY Times

It is based on this demographic shift that Goldman Sachs analysts Kevin Daly and  Tadas Gedminas are projecting Pakistan's economy to grow to become the world's sixth largest by 2075.  In a research paper titled "The Path to 2075", the authors forecast Pakistan's GDP to rise to $12.7 trillion with per capita income of $27,100.  India’s GDP in 2075 is projected at $52.5 trillion and per capita GDP at $31,300.  Bangladesh is projected to be a $6.3 trillion economy with per capita income of $31,000.  By 2075, China will be the top global economy, followed by India 2nd, US 3rd, Indonesia 4th, Nigeria 5th and Pakistan 6th. The forecast is based primarily on changes in the size of working age populations over the next 50 years.  

GDP Ranking Changes Till 2075. Source: Goldman Sachs Investment Res...

 

Economic Growth Rate Till 2075. Source: Goldman Sachs Investment Re...

Economic Impact of Slower Population Growth: 

Daly and Gedminas argue that slowing population growth in the developed world is causing their economic growth to decelerate. At the same time, the economies of the developing countries are driven by their rising populations.  Here are four key points made in the report:

 1) Slower global potential growth, led by weaker population growth. 

2) EM convergence remains intact, led by Asia’s powerhouses. Although real GDP growth has slowed in both developed and emerging economies, in relative terms EM growth continues to outstrip DM growth.

3) A decade of US exceptionalism that is unlikely to be repeated. 

4) Less global inequality, more local inequality. 

Goldman Sachs' Revised GDP Projections. Source: The Path to 2075

Demographic Dividend: 

With rapidly aging populations and declining number of working age people in North America, Europe and East Asia, the demand for workers will increasingly be met by major labor exporting nations like Bangladesh, China, India, Mexico, Pakistan, Russia and Vietnam. Among these nations, Pakistan is the only major labor exporting country where the working age population is still rising faster than the birth rate. 

Pakistan Population Youngest Among Major Asian Nations. Source: Nik...

World Population 2022. Source: Visual Capitalist

World Population 2050. Source: Visual Capitalist

Over a million Pakistani university students are currently enrolled in STEM courses. Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. Nearly 700,000 Pakistanis have already migrated in this calendar year as of October, 2022. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East was over half a million in the last decade. 

Consumer Markets in 2030. Source: WEF

World's 7th Largest Consumer Market:

Pakistan's share of the working age population (15-64 years) is growing as the country's birth rate declines, a phenomenon called demographic dividend. With its rising population of this working age group, Pakistan is projected by the World Economic Forum to become the world's 7th largest consumer market by 2030. Nearly 60 million Pakistanis will join the consumer class (consumers spending more than $11 per day) to raise the country's consumer market rank from 15 to 7  by 2030. WEF forecasts the world's top 10 consumer markets of 2030 to be as follows: China, India, the United States, Indonesia, Russia, Brazil, Pakistan, Japan, Egypt and Mexico.  Global investors chasing bigger returns will almost certainly shift more of their attention and money to the biggest movers among the top 10 consumer markets, including Pakistan.  Already, the year 2021 has been a banner year for investments in Pakistani technology startups. 

Record Remittances From Overseas Pakistanis:

 

Pakistan is already seeing high levels of labor export and record remittances of over $30 billion pouring into the country. Saudi Arabia and the United Arab Emirates(UAE) are the top two sources of remittances but the biggest increase (58%) in remittances is seen this year from Pakistanis in the next two sources: the United Kingdom and the United States.

 

Remittances from the European Union (EU) to Pakistan soared 49.7% in FY 21 and 28.3% in FY22, according to the State Bank of Pakistan. With $2.5 billion remittances in the first 9 months (July-March) of the current fiscal year, the EU ($2.5 billion) has now surpassed North America ($2.2 billion) to become the third largest source of inflows to Pakistan after the Middle East and the United Kingdom. Remittances from the US have grown 21%, second fastest after the EU (28.3%) in the first 9  months of the current fiscal year. 

 

Worker Remittances as Percentage of Pakistan GDP. Source: World Bank

Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  

 

Pakistan Demographics

About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. 

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[Riaz Haq]

What migration reveals about religion in India

https://www.bbc.com/news/articles/cm23n23dwx3o

https://www.pewresearch.org/religion/2024/08/19/the-religious-compo...

The religious composition of Indians who emigrate differs significantly from those who stay in India, analysis by the US-based Pew Research Center has found.
About 80% of people in India are Hindu, but they form only 41% of emigrants from the country, the survey on the religious composition of the world's migrants says.
In contrast, about 15% of people living in India are Muslim, compared with 33% of those who were born in India and now live elsewhere.
Christians make up only about 2% of the Indian population, but 16% who have left India are Christian.

"Many more Muslims and Christians have left India than have moved there. People of other, smaller religions, like Sikhs and Jains, are also disproportionately likely to have left India," Stephanie Kramer, a lead researcher of the analysis, told me.
More than 280 million people, or 3.6% of the world’s population, are international migrants.
As of 2020, Christians comprised 47% of the global migrant population, Muslims 29%, Hindus 5%, Buddhists 4% and Jews 1%, according to Pew Research Center's analysis of UN data and 270 censuses and surveys.
The religiously unaffiliated, including atheists and agnostics, made up 13% of global migrants who have left their country of birth.
The migrant population in the analysis includes anyone living outside their birthplace, from babies to oldest adults. They could have been born at any time as long as they are still alive.
As far as India is concerned, the analysis found that the religious make-up of the population who have moved to India is much more similar to that of the country's overall population.

Also, Hindus are starkly under-represented among international migrants (5%) compared with their share of the global population (15%). There are about one billion Hindus around the world.
“This seems to be because Hindus are so concentrated in India and people born in India are very unlikely to leave,” said Ms Kramer.
“More people who were born in India are living elsewhere than from any other country of origin, but these millions of emigrants represent a small fraction of India's population.”
About 99% of Hindus lived in Asia back in 2010, almost entirely in India and Nepal, and researchers say they wouldn't expect that share to drop much, if at all.
Since partition, India hasn't experienced a mass migration event, and many of those who migrated then are no longer alive.
“In contrast, other religious groups are more dispersed globally and face more push factors that drive emigration,” Ms Kramer said.

[Riaz Haq]

Remittances soar to $3b in Aug


https://tribune.com.pk/story/2494858/remittances-soar-to-3b-in-aug

KARACHI:
Workers' remittances sent home by overseas Pakistanis remained strong at nearly $3 billion in August 2024, marking a significant 40.5% increase compared to the same month last year. This robust growth is attributed to the prolonged stability of the rupee against the dollar and a surge in overseas employment, particularly in the Middle East, which allowed more expatriates to support their families back home.

According to data released by the State Bank of Pakistan (SBP), remittance inflows rose to $2.94 billion in August 2024, up from $2.09 billion in August 2023. However, the inflows experienced a slight decline compared to $2.99 billion in July 2024. Cumulatively, remittances surged by 44% to $5.94 billion in the first two months (July-August) of the current fiscal year 2024-25, compared to the same period last year.

The average monthly inflow of nearly $3 billion during the first two months of FY25 is notably better than the full-year average of $2.68 billion per month in FY24, suggesting that the growth momentum could be sustainable moving forward.

Speaking to The Express Tribune, Tahir Abbas, Head of Research at Arif Habib Limited (AHL), noted that the major growth in remittances was recorded from Middle Eastern countries. A significant number of Pakistanis found employment in Saudi Arabia and the United Arab Emirates (UAE) in recent months, contributing to the increase in remittances.

Abbas dismissed concerns about the impact of declining international petroleum prices on remittance inflows, stating that the current downward trend in oil prices is more of a normalisation than a sharp decline. He explained that oil prices below $70 per barrel do not pose a significant threat to remittance inflows from oil-dependent Middle Eastern countries like Saudi Arabia and the UAE, which are major sources of remittances for Pakistan.

"Even if oil prices briefly dip below $60 per barrel, it would not destabilise remittance inflows. However, if prices were to fall below $50 per barrel, it could hurt receipts, though such a scenario is not foreseen at present," Abbas explained.

———————-
From Arif Habib

Remittances increased by 40% YoY to $ 2.9bn during Aug’24

Remittances by overseas Pakistanis increased by 40% YoY to USD 2.9bn during Aug'24 compared to USD 2.1bn during Aug’23. On MoM basis, remittances decreased by 2%.

During 2MFY25, remittances went up by 44% YoY to USD 5.9bn as compared to USD 4.1bn in 2MFY24.

@StateBank_Pak
#remittances #SBP #Pakistan #Economy #AHL

https://x.com/ArifHabibLtd/status/1833164216926343427

[Riaz Haq]

Arif Habib Limited
@ArifHabibLtd
Remittances increased by 29% YoY to $ 2.8bn during Sep’24

Remittances by overseas Pakistanis increased by 29% YoY to USD 2.8bn during Sep'24 compared to USD 2.2bn during Sep’23. On MoM basis, remittances decreased by 3%.

In 3MFY25, remittances increased by 39%YoY to USD 8.8bn.

https://x.com/ArifHabibLtd/status/1843884748168478837

-----------------

https://tribune.com.pk/story/2501681/pakistan-sees-388-increase-in-...
In the first quarter of fiscal year 2025, overseas Pakistanis sent a total of $8.8 billion back to Pakistan, marking a significant increase of 38.8% compared to the same period in fiscal year 2024.

Overseas Pakistanis sent an impressive $2.849 billion back to Pakistan in September 2024, reflecting a notable 29% increase from $2.208 billion in the Septermber 2023, Express News reported. Despite this positive trend, remittances saw a slight decline of 3% compared to August 2024, when the total was $2.943 billion

The average monthly remittances from workers over the three months amounted to approximately $2.92 billion.

Pakistani workers in Saudi Arabia were the largest contributors in September 2024, sending $681.3 million. Although this figure is a 4% decrease from August, it still represents a 27% increase from the $538.3 million sent in September of the previous year.

In contrast, remittances from the UAE showed an upward trend, rising by 4% from August, from $538.4 million to $560.3 million. Year-on-year, this figure jumped significantly by 40%, compared to $399.8 million in September 2023.

Pakistani workers in the United Kingdom sent $423.6 million in September 2024, which was an 11% decrease from August. However, this amount still signifies a 36% increase compared to last year.

[Riaz Haq]

Pakistan’s Top Talent Is Leaving the Country in Record Numbers

https://www.bloomberg.com/news/features/2024-10-31/pakistan-s-brigh...

Economic hardship has pushed skilled workers to move abroad, hollowing out banks, hospitals and multinational companies.

One million skilled workers — doctors, engineers, accountants and managers, among others — left Pakistan over the past three years alone, according to a government tally. That makes Pakistan one of the top 10 countries for emigration.

Asad Ejaz Butt is one of Pakistan’s best and brightest. After completing graduate studies in Canada, the economist returned home with a drive to contribute to his home country and its development.

Yet prestigious jobs working under two finance ministers weren’t enough to pay the bills. Over the past few years, as Pakistan’s inflation outranked any other nation in Asia, Butt couldn’t afford basic necessities, including rent. So he left his highly coveted government job and moved back to North America — to buy time and complete another advanced degree.

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https://youtu.be/YAeOOpk0OEI?si=thP0nkD0AL5l-ZwU

A growing number of skilled workers are leaving Pakistan, seeking opportunities abroad as their country faces one of Asia’s highest inflation rates, rising food and energy prices and a devalued currency.

To address the dire economic situation, the government has implemented unpopular reforms, including raising corporate tax rates and utility prices. These measures are part of Pakistan’s latest $7 billion loan deal with the International Monetary Fund, aimed at averting national bankruptcy.

But the result of all this has been an increasing number of would-be taxpayers emigrating to wealthier nations. So what does that mean for the country’s economic and political prospects?

[Riaz Haq]

Record numbers of Pakistan’s top talent fleeing country

From Bloomberg by Fasih Mangi:



https://www.bloomberg.com/news/features/2024-10-31/pakistan-s-brigh...

https://dailyausaf.com/en/pakistan/record-numbers-of-pakistans-top-...

ISLAMABAD: Pakistan, a nation grappling with severe economic turmoil, is facing an unprecedented brain drain. Asad Ejaz Butt, a brilliant economist, exemplifies this exodus.

After completing his graduate studies in Canada, Butt returned to Pakistan with a passion to contribute to his homeland’s development. However, despite securing prestigious jobs under two finance ministers, he struggled to make ends meet due to soaring inflation.

Butt’s story is not unique. Pakistan’s inflation rate has surpassed that of any other Asian nation, rendering necessities unaffordable for many.

The cost of living has become so prohibitive that even essential items like milk in Karachi exceed prices in Paris. Faced with economic precariousness, accomplished citizens across industries are fleeing the country, depriving banks, hospitals, and multinationals of vital talent and resources.

According to recent United Nations data, Pakistan recorded the highest outflow of skilled workers in several years, with over 1 million departing over the past three years alone.

This makes Pakistan one of the top 10 countries for emigration. The exodus is most pronounced among the wealthy and educated, with nearly 40% of Pakistanis expressing a desire to leave.

Business leaders lament that confidence in the country and its politicians has never been lower. Veqar Islam, CEO of JBS in Karachi, notes that desperation is at an all-time high, surpassing levels seen in the last 40 years.

Companies are struggling to retain talent, particularly in key sectors like tech and finance. To stay competitive, firms like TPL Corp. offer travel perks and pay top talent in US dollars.

Pakistan’s financial sector has been severely impacted, with top brokerage houses losing employees to foreign opportunities. Despite the country’s stock market being the world’s top performer, few bankers and traders want to stay. Mohammed Hunain, a certified financial analyst, relocated to Saudi Arabia despite being among Pakistan’s top 5% of earners.

The government recognizes the gravity of the situation, acknowledging that no great nation can thrive by exporting its top talent. To address this, officials have implemented measures like increasing taxes on high earners to meet IMF program requirements.

However, it remains uncertain whether this strategy will stem the brain drain.

For now, Pakistan’s economic downturn continues to drive away its brightest minds. Asad Ejaz Butt, now pursuing another advanced degree in Massachusetts, exemplifies this trend.

Though he misses Pakistan, he cannot envision returning home anytime soon due to the volatile economy. “I have to be more practical, more reasonable with my decision-making, even though I still have those emotions for my country,” he said.

The brain drain has severe implications for Pakistan’s future, underscoring the urgent need for economic reform and stabilization. As the country struggles to regain its footing, it risks losing the very talent it needs to propel growth and development.--

[Riaz Haq]

Pakistan’s trade deficit contracts 31% YoY to $1.5bn in October 2024 - Pakistan - Business Recorder


https://www.brecorder.com/news/40330236


Pakistan’s trade deficit significantly decreased by 31% to $1.5 billion in October 2024 as compared to the same month of the previous year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.

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Pakistan’s remittance inflow at $3.05bn in October 2024, up 24% year-on-year - Markets - Business Recorder


https://www.brecorder.com/news/40331410

On a month-on-month (MoM) basis, the inflow in October was 7% higher when compared to $2.86 billion in September 2024.

During 4MFY25, remittances went up by nearly 35% YoY to $11.8 billion as compared to $8.8 billion in 4MFY24.

Experts credit the increase in inflows to the stability of the exchange rate, a narrowing gap between open and inter-bank market rates, increase in digital payment channels and a rise in the number of workers relocating abroad, especially to GCC countries.

“These stronger inflows will help Pakistan maintain PKR stability and contain the current account deficit,” said Mohammed Sohail, CEO Topline Securities, in a note.

Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing the disposable incomes of remittance-dependent households.