Does the last Wednesday speech of the US President Donald Trump in which he declared that the USA is 100% self-sufficient in meeting its energy needs raise alarms for the overseas workers working in the Gulf? Majority of the overseas workers in the Gulf region work in the energy organizations. In the wake of subdued activities in the oil sector and dwindling demand, there is anticipation of thumping job losses of the emigrant workers. However, nothing could be pronounced with certainty.
Two leading economies of the world make a difference in terms of almost all business activities.
The USA which is $21 trillion economy and China which is a $14 trillion economy set the direction of the economic prosperity in the entire world to some extent. In case the energy import needs of these two economies decelerate and they become net exporters of energy, the oil producing countries would have to find new avenues to sustain. The primarily oil-dependent Gulf region economies have been making money by exporting oil to leading economies of the world. At this juncture, it seems as if the entire spectrum of the world is changing with the shift to the use of clean energy and self-sufficiency. The USA has been importing paltry percentage of its energy needs from the Gulf, which has never been over 20% of its overall requirement. At present, the USA has become exporter of oil instead of importing oil. With the dwindling oil revenue, it is obvious that the oil producing economies would slash the work force. This would lead to monumental job losses affecting the remittances of the countries whose diaspora is working on such projects.
Pakistan, a debt-laden economy, desperately needs foreign remittances to address its economic woes. The economy worth $284 billion receives around $20 billion dollars from nine million Pakistani diaspora living across the globe. With the total population 212 million, Pakistan needs robust measures to sustain at present. Remittances have been thumping impetus in terms of economic sustenance over the period of over a decade. The primary apprehension at present might be the impending job losses of Pakistani workers working in the Gulf region in the wake of under-performance of some countries and the dwindling oil demand globally.
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Pakistan receives over 80% of its remittances from five countries i.e. Saudi Arabia, United Arab Emirates, United States, United Kingdom and Malaysia. Out of $20 billion received, over 65% flow in from the Gulf region. With the dismal performance of the oil sector and the burgeoning nationalization of jobs in the Gulf region, it seems certain that both blue collar and white collar overseas employees would bear the brunt. Pakistan desperately needs the dollars which flow in the shape of remittances.
The launch of the Pakistan Remittance Initiative (PRI) in 2009 was a dazzling endeavor of the then government to encourage the flow of remittances through official channels which has buttressed the economy over the last decade. Imran Khan, the incumbent Prime Minister of Pakistan calls the overseas Pakistanis ‘an asset for the country’ and he has directed the relevant authorities to facilitate them in terms of remitting to Pakistan which eventually underpins the economic activities in Pakistan. However, there is dire need at present to ensure that Pakistan has robust skilled work force and this work force is sent to the right destinations across the world to ensure sustainable flow of dollars every year as is being done by various countries in the world.
Around $551 billion were received by low- and middle-income countries through remittances last year. India with $82 billion, China with $70 billion, Mexico with $39 billion, the Philippines with $35 billion, and Egypt with $26 billion were at the top of the list of the remittance recipient countries last year. Remittances received by Tajikistan and Nepal last year were 30% of their GDP.
The contribution of the foreign remittances in the GDP of Pakistan is around 7% which must be hiked to 20% through well chalked out strategies with wider diversity not depending on just a few countries.