Impact of Foreign Remittances on Economic Growth and Poverty Reduction in Pakistan

The first is that they did not come in even increments. Shortly after the loans were given conditions would stabilize, but then according to Dr. Ehtisham Ahmad, ” when these inflows declined, the economy quickly headed towards fiscal and balance of payments crises.” (Ahmad, E., & Mohammed, A., 2012). It is hard for industry to ever stabilize when you are constantly battling credit crises. Since the country can’t always meet the conditions of the loans from the IMF, the US has gleefully stepped up to lend the country money, but at what cost? According to Dr. Ehtisham Ahmad, “The foundation of the relationship with the US is based on Pakistan’s strategic location at the mouth of the Persian Gulf”. (Ahmad, E., & Mohammed, A., 2012). So the IMF is setting Pakistan up for failure with it’s “stop and go” lending, allowing the US to enter the picture as a lender in return for certain political favors involving the land. So in it’s series of loans to Pakistan, it has stripped the independence from the country and helped other nations come in to make decisions involving it’s

Synchronously, the developing economies such as some Asian and South American regions which exported their experienced workers to the overseas market can also reduce the unemployment pressure that governments must face in long-term period. On the other hand, international remittances are beneficial for both migrant-sending and migrant-receiving countries. Statistics discovered that the international remittances transmitted to the homeland of 35 to 40 million migrant workers are currently estimated to be about US $66 billion per year, and represent the second largest international monetary trade flow, exceeded only by petrol (Sasikumar 2001). For the countries which exported labour to rich countries, they would gain enormous exchange funds from international remittances and regard the money as foreign investment to facilitate their economic development. By contrary, for these migrant-receiving countries, the outflow of vast domestic currency would take away some financial threats such as malignant inflation to a great extend. Nay, the popularization of one country's currency could also accelerate its economic fluidity and strengthen its economic influence to the other countries.

According to a 1999 International Monetary Fund report, remittances from Dominican Americans are estimated to be about $1.5 billion per year. Most of these funds are used to cover basic household needs such as shelter, food, clothing, health care, and education. Secondarily, remittances have financed small businesses and other productive activities

The “Vicious Cycle” begins with the push factors that cause people to migrate out (Hinojosa, 2015). Lack of opportunities take people across treacherous borders in the hopes of reaching their destination, a country like the United States in which they find a decent paying job that allows them to sustain themselves and their loved ones back home (Hinojosa, 2015. The inflow of remittances to a home country add up to millions and sometimes billions for some countries. The large cash inflow into countries heavily dependent on

One of the negative thing about remittance is that a numerous immigrants are disappointed not just with the poor reliability quality and rate of the present casual settlement system, additionally with the immense expenses they should pay. They may pay 6 -15 percent of the dispatched sum for the exchange. On top of that, they pay another 3-5 percent

There are a lot of immigrant’s workers come to the United State, those starting sending money to their relative in the form of remittances. By the way, I think that these people struggling themselves to help others in back negative ways on themselves without any considerations for the modernity of life in a special way, besides the reasons and wisdom that our God create us, furthermore balances between spirit, mind, and body. Therefore, neglecting these considerations causes and create many bad back effects on the same remittance and their family including subsequently this community.

Cotton, textile, grains, fruits and vegetables are the major exports and source of foreign exchange earnings. The international trade regulation and competition have caused Pakistani producers to introduce technologies in processing and manufacturing better quality, cost-effective and value-added products, in accordance with the international standards. In addition to this, globalization has opened doors for millions of job opportunities for Pakistanis all over the world. Personal remittances account for 7% of GDP for Pakistan (World Bank, 2015) and not only help in increasing the living standards but also, through private domestic investments, help in economic growth. Furthermore, the free and preferential trade agreements with regional and international economies has allowed the inflow of technology and surplus capital into Pakistan, allowing the development of infrastructure, telecommunication and energy

There are many reason that effects on the remittance worker but I choose the most three negative that effects on the remittance worker life. First of all, I will explain how the remittance life going on. For example, Lying, Cannot go home if you illegal and Life of hard work.

The connections created by the Indonesian migrant workers during their migration journey have underscored the transnational dimension of their immigration experiences. The links made, for example, indicate a multiple borders connection especially through their remittance sending and the transnational motherhood ties. Hugo in his exploration of the Indonesian labor export notes the direct impact of the remittances on family and village economies, which can be seen from the brick houses and modern household appliances (1995: 288). In addition, land purchase, housing, business enterprise, and family day to day needs are the typical patterns use of remittances (Hugo 1995: 289; Stahl 172). Likewise, Fransisca Ria Susanti (2013) and Dewi Anggraeni

A remittance is a transfer of money by a foreign worker to an individual in his or her home country. “Remittances can fuel additional migration and thereby foster a migration chain” (Akkoyunlu and Boriss 80). Skill based immigration is good to improve the economic growth of both host and home countries, and skilled migrant workers make important contributions to the labor market in high skilled occupations. Skill development is critical for economic growth and social development. For example, country like India produces a lot of skilled manpower in different industries sending to world

In today’s world, when technological advancements have made globalization possible and have thus made different economies from all over the world intricately connected—and, to a great extent, interdependent—it is of no surprise that migration of people from one country to another has much greater impact on global economy today than it had in the past. For some countries, this movement of people have played a key role in shaping their economy, often causing unprecedented changes and resulting in adjustments of old policies and formation of new ones.

Many economists have different opinions and recommendations regarding international immigration policies. Richard H. Adams and John Page’s essay “Do International Migration and Remittances Reduce Poverty in Developing Countries?” focuses on remittances, or the money sent back home by migrant workers, and their effect on poverty in labor exporting countries. The authors conclude that an increase in the amount of migrant workers in a country’s population will lead to a decrease in poverty for the labor-exporting country. They give policymaking recommendations to the international community and ask that world leaders make it easier for these remittances to be sent to family members of migrant workers. In Kenneth F. Scheve and Matthew J. Slaughter’s essay “Labor Market Competition and Individual Preferences over Immigration Policy,” the economists focus on how individual preferences concerning immigration policies are influenced by an individual’s socioeconomic status. Less-skilled workers fear an influx of “job-stealing” low-skilled immigrants, and therefore are more likely to favor restrictionist policies that limit immigration. While these fears are believed and often influence policy, they do not hold up to economic theory and should be disregarded. International and domestic law should ignore policy preferences of low-skilled native workers and should be reshaped to allow the free-flow of human capital. This would improve the economies of both labor-importing and

Tajikistan is also the most remittance dependent country in the world, with inflows from Russia accounting for an estimated $4.1 billion per year or 48% of its GDP (World Bank 2013). According to the International Organization for Migration, nearly half the working-age Tajik men are in Russia, with the majority being illegal migrants which precludes them from accessing many services including health care (IOM, 2013).

Most foreign workers are coming from ASEAN countries, Nepal and India. Very often, false promises were made by agent and they are forced to sign another contract where the salary and benefit is totally decreased upon arrival. The Chin Well Fastener Co Sdn Bhd case in year 2002 was clearly shown how the migrant workers from India being “cheated” by the India Agent, the middleman and Malaysia employer. In this case, 80 workers had pay Rupees 100,000 (about RM8, 000) to the foreign agent in India to secure the employment in Malaysia. Basic salary of RM600 per month and with overtime total of RM800 will be paid per month was being told. It was established in Court that the employer had signed a contract of employment and three documents as required by the India High Commission promising a basic salary of RM600 per month. When they arrived and worked in Malaysia, they were paid only RM350 instead of RM600. In addition, a “levy” of RM152 was deducted from the salary although it is not stated in the contract or any official documents. When these Indian foreign workers protest against the action being taken, the employer cut off the water and electricity supply to the hostel. Furthermore, the foreign workers are being forced to sign a new fresh contract for a

Economic growth rates have risen from 1.8 percent in 2000/01 gradually to average 6 -7 percent a year in the last four years making Pakistan one of the fastest growing economy in the Asia region. For Pakistan these rates are not spectacular but a reversion to mean. The average growth rate of GDP over 50 year period of Pakistan has been 5.2 percent per annum. Manufacturing sector output growth was over 15 percent, exports have doubled in US dollar terms in these five years, and an open trade regime has allowed imports from all over the world to triple. Tax revenues have risen by 14 percent a year reducing fiscal deficit which used to average 7 percent a year in the 1990s to average 4 percent. Current account turned around from chronic deficit to a surplus for three successive years mainly due to renewed export growth and resurgence of workers’ remittances. Although it has become negative since 2005/06 due to phenomenonal growth in imports of machinery and equipment and increase in world oil prices it is being fully financed by foreign capital flows. Inflation rate during the first four years of the current government remained below 4 percent but oil price pass through and food shortages have led to 8 percent on average since 2004-05. External debt burden has been halved from 52% to 26% of GDP and is projected to be on a declining path. The country’s capacity to service its