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Thursday March 28, 2024

Govt urged to devise diaspora strategy to accelerate economy

LAHORE: Pakistani diaspora is mainly seen as a source of remittances alone, but its other major role of accelerating economic growth through trade, investment and technology transfer has not been exploited yet, experts said on Tuesday. “History tells us that even centuries ago trade was conducted most comfortably between merchants

By Mansoor Ahmad
July 01, 2015
LAHORE: Pakistani diaspora is mainly seen as a source of remittances alone, but its other major role of accelerating economic growth through trade, investment and technology transfer has not been exploited yet, experts said on Tuesday.
“History tells us that even centuries ago trade was conducted most comfortably between merchants of same ethnic groups some of whom were residing in alien countries,” they said, adding that the importance of diaspora’s economic potential is much beyond remittances.
“Indians exploited the presence of their nationals in alien lands on the same principle,” said market analyst Benish Toor. She said the high tech industries in India were mostly created by returning migrants that maintained connections with the diaspora they left behind in host country. She said beginning with IT exports of $1 billion at the start of this century its exports now exceed $100 billion. The remittances continue to pour into India exceeding $60 billion a year making it the largest global recipient of workers’ remittances, she added.
Pakistan has a substantial diaspora, which is evident from the fact that this year worker remittances crossed $18 billion. This is not bad compared with six times larger India’s $60 billion. But very few expatriate Pakistanis have invested in Pakistan or imported goods from their home land. Sir Pervaiz, a Pakistani immigrant residing in UK, has made investments in cement and banking sector, she said. Netsol is another name that comes to mind where Pakistani brothers are obtaining IT orders while residing in United States and executing them from their Pakistani base. “We have billionaire expat Pakistanis residing in European Union and United States but they are shy of investing in Pakistan or doing any business with their native country,” she said.
“Perhaps many Pakistanis left the country not feeling it as a safe place to live,” said financial analyst Amina Usman. However, those that left the country in disappointment have not disappeared. They still send remittances to their dear ones in Pakistan and there is a need to engage with them. “They could become valuable assets not only for Pakistan but for their host country as well,” she said.
Pakistan exporters would feel more comfortable in doing business with expat Pakistanis than with natives of the land they live in. Similarly, Pakistani expats would find little difficulty when they deal with nationals of their country of origin than with Indians or Bengalis. Since these co-ethnic workers maintain regular contact with each other they stand a better chance to enforce contracts at long distances when the existing institutional framework could not do so reliably, she said. They have the ability to punish opportunistic behaviours, which is the reason that they could establish trust between exporters and importers.
These Pakistanis maintain the same culture as maintained by domestic Pakistanis and none would risk reputational costs and other forms of social punishment for not paying for goods, she added.
Social Worker Dr Kishwar Dhingra said creditable research has shown that on a level playing field countries trade more with, and invest more in, the diaspora of the home countries. Moreover, she added, with proper transfer of technology countries become good at making the products that their expatriates’ home countries are good at making.
She said the reason that Pakistani diaspora has not performed to its potential is that unlike India where return of Indian immigrants has started the Pakistani expatriate are still reluctant to come back. She said Indians returning after successful stays abroad do business with the diaspora they left behind whom they can trust. This is because both having lived for long in the same culture know the rules of the game that native Indians may find difficult to adopt.
She said the diaspora should not be looked down by native or host country, further adding that it is the channel created by the diaspora through which not only money flows, but also tacit knowledge. She said money and knowledge are the potential sources of opportunities for trade, investment and innovation. Government of Pakistan, in order to benefit from its overseas workers, should formulate diaspora strategy based on natural feelings of identity and affection.