Pakistan has had a phenomenal growth in officially recorded labour exports. The ongoing decade alone has seen average annual labour exports grow more than 150 percent. But latest data released by Pakistan’s Bureau of Overseas Employment shows that growth is slowing down.
According to the statistics released by the bureau, Pakistan’s labour exports in the first seven months of CY17 averaged about 43,300 per month, as against a monthly average of 70,000 and 79,000 in CY16 and CY15 respectively.
A comparison with other labour exporting economies reveals that the market is being gradually chipped away by Bangladesh and India. Detailed country-wise annual labour export statistics for India are not publicly available, but anyone who has been frequenting the UAE knows very well how Indian labour – especially in the white collars and blue collar skilled category - has been elbowing out Pakistani workers.
In Bangladesh’s case for instance, her labour export to the Kingdom of Saudi Arabia (KSA) – which boasts half of Pakistan’s officially recorded labour exports to date – stood at 143,913 in the year 2016. In just the first seven months of CY17, however, Bangladesh exported 341,294 workers to the kingdom. Pakistan, however, managed to export only 89,624 workers in 7MCY17 (averaging 12,803 per month) to KSA as against 462,598 in 2016 (averaging 38,549 per month).
While it is true that low oil prices have had a negative impact on overall labour demand in KSA, the main reason why Bangladesh has been able to chip away Pakistan’s share is the recent lifting of ban Bangladeshi workers imposed in 2008. During the period of the ban, only 139,587 Bangladeshi workers proceeded to KSA; whereas Pakistan exported 2.07 million workers to KSA during the same period.
After the lifting of the ban that followed the visit of Prime Minster of Bangladesh to KSA in June 2016, Saudi investors have entered an agreement with Bureau of Manpower and Employment and Training (BMET) in Dhaka, Chittagong, Manikganj and Mymensingh.
Bangladesh and KSA have also signed a labour pact due to which 500,000 Bangladeshi domestic workers would proceed to KSA. For this purpose, 1000 recruitment centers are operational for processing of these workers. The recruitment of these workers would be processed through online portal called Musanid Platform, according to Pakistan’s bureaus report.
These efforts are similar to those made by Indian premier Modi who (as previously flagged in these columns) has been wooing the UAE for India labour exports amongst other bilateral investment deals.
The future for Pakistani labour exports appears uncertain. The UAE and KSA alone account for about 84 percent of Pakistan’s total labour exports to date, which means since 1971 to July 2017. With oil slowing down amid gradual maturity towards service sector in these economies, Pakistan can only be expected to face tough times ahead.
Oil and gas firms in the GCC are in the process of downsizing, whereas construction sector is also slowing down. The sectors demanding expat labour included the likes of health, hospitality, recreation, entertainment, human resources, automotive industries, sales, accounting, finance, procurement and information technology, the last of which is expected to witness a spike in demand in the ensuing years.
As is the case of goods exports, Pakistan’s labour exports also lack value addition. To date, 42 percent of Pakistan’s labour export is unskilled, and 9 percent is semi-skilled, and barely 6 percent are in the highly qualified and highly skilled category, made by Pakistan’s bureau of overseas employment.
While there have been some improvements in lower skill spectrum (unskilled to skilled) of Pakistan’s labour export in recent years, the country still sends barely a handful of ‘highly qualified’ and ‘highly skilled’ category labour – whereas it is these sectors that are in high demand in the GCC and KSA. Given the importance of worker remittances, labour exports warrant a closer attention by policymakers and other stakeholders alike.
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