Pakistan’s manpower exports to support GDP growth: ADB

KARACHI: Pakistan’s struggling economy can get a boost in GDP growth from an increase in exports of its burgeoning labour forces to developed Asian economies, facing deficit in the working population, Asian Development Bank (ADB) said in a report on Tuesday.

ADB, in Asian Economic Integration Report (AEIR) 2016, said many economies in Asia and the Pacific -- the world’s largest source of international migrants – could expand their role as source or host economy for migrant workers.

The region accounted for more than a third of the 243.7 million migrants worldwide as of 2015. The report said Pakistan is one of the seven developing economies that have a growing supply of labour and could export labour across the region. Other economies include Cambodia, Indonesia, Lao, Mongolia, Myanmar, India and the Philippines.

“…aging economies like Hong Kong, China, the Republic of Korea, Japan and Singapore are unable to meet labour demand with their dwindling workforces,” it said. “Hence, these economies would benefit from immigrant labor.”

In 1995, when the net migration (difference between inbound and outbound migration) in Pakistan was 0.3 million in deficit, the country’s GDP per capita was recorded at $817. However, the income grew to $978 with 0.7 million surplus in 2005 and at $1,152 with 2.3 million surplus in 2015.  

“For the source economies, Pakistan and the Philippines, the working populations show surpluses from 2015 to 2050,” the report said. “These estimates are expected as the two economies have relatively younger populations.” 

According to the government numbers, around 7.8 million Pakistanis are working in oversees market with the majority of the workers concentrated in the Middle Eastern region. Some 49 percent manpower is in Middle East with Europe having 28.2 percent and United States of America 16 percent.

The report, however, said increasing migration flows will require proactive efforts in host and source economies. “The magnitude of these changes critically depends on policy decisions, especially in the areas of healthcare and pension provision and business opportunities.” 

The report said Japan needs to augment its labor force by 37 million people, and the Republic of Korea needs to import labour to address a worker shortfall of 36 million. Pakistan achieved 4.7 percent growth in the last fiscal year of 2015/16, which was the highest in the past three years. The growth is still not enough to accommodate its growing work force.

The country’s labour force has crossed the 61 million-mark. Official figures showed that only four million workers are unemployed. But, the government acknowledged that Pakistan continues to be the sixth most populated country in the world with an estimated population of 195.4 million. The population growth rate is 1.89 percent, which is higher as compared to neighbouring countries like India, Iran and Bangladesh.

The growth rate needs to be more than seven percent to create job opportunities. Agriculture sector, which employs almost half of the labour force, is reeling under slow growth. Soft oil prices for the past two years significantly dented the inflows of remittances from Middle East – the major host of Pakistan’s working migrants.  Remittances dropped 3.83 percent to $6.258 billion during the first four months of the current fiscal year of 2016/17.