Migration Causes And Effects In Pakistan Economics Essay

Since 1947 after partition a millions of people transfer from India to Pakistan. This was one of the mass level migration in the sub-continent. Currently the total number of Pakistani migrant is about 7 millions around the world. Most of them are living in the richer west countries while more then 2 millions are live within Middle-East. This paper is based on secondary data to examine the issue of international migration and their positive & negative impact on the economic development of Pakistan. Migration has both cost and benefits on the socio economic structure of any country. The findings reveal that remittances are one of the most important contributions to the home country while social cost is very high to the migrant families.

Key words: Migration causes and effects, economic development, Pakistan.

1. Introduction:

Migration mean change of habitat or a removal from one place to another .Migration is usually interpreted as a response to two sets of mutual forces i.e. push factors operating at the place of removal and pull factors work at place of target. Every year million of world people make what is often a significant decision to move to a new dwelling. Migration the component of population change may be interpreted as natural efforts to achieve a better balance between population and resources. Migration is define here as a movement of population involving a change of permanent residence of substantial duration. Migration may be divided into various categories but two are very important as under.

Internal migration

External migration

Migration from rural to urban areas is generally the most important form of migration especially in countries experiencing industrialization and rapid technological changes. In area of departure population pressure modernization of agricultures well as tradition system of land turn over have been the key push factors. The rapid increase of employment opportunities in urban areas is the major pull factor. (1)

A helpful approach to understand migration process is to think in terms of push and pull factors. Push factors for example unemployment, famine, political factors enmities etc make people dis satisfied with their home areas. Pull factors help migrants decides exactly where they will go. Close family affiliation, job opportunities better education, facilities and good environment of big cities are major pull factors. (2)

Migration is probably as old as the mankind however rapid development and population pressure has change the causes and dimensions of migration. As like some people migrate from their homelands due to war and terror situation and uncertain circumstances of their country called refugees. Many migrate across the geographical boundaries of the country for the search of better job and maintenance of their financial status in the society. Other compelled by the governments to leave their homes for the time being due to military operations ,natural disaster or any other reason called internally displace persons(IDP). Migration has many types like cyclic movement; consist of seasonal movement and nomadisim (3). The periodic movement involves labor migration and migration from rural areas to cities urbanization. Whatever the type of migration is? The matter of concern is to explore its well-known causes and the impact of migration on the overall economic and social system of a country.

The positive relationship between urbanization and per capita income in one is the most outstanding stylized facts of development process. If a country is more developed measured by per capita income the share of population living in urban areas is also greater so it means that higher income countries are more urbanized. In economics development literature Rural Urban migration was viewed most favorable. Internal migration was thought to be a natural process in which additional labor was withdrawn from rural sector to provide needed workforce for urban industrialization. This process was seem to be very beneficial for the society because there is positive shift of human resources from the place where the marginal product was zero to the place where it is not only positive but increasing rapidly due to capital accretion and industrial development.(4)

As we discussed above that employment opportunities or attractive jobs at urban centers is the major pull factor which may compel the people to leave their home lands, and if they migrate to urban centers then their migration make them economically well off then before. Same is the case with external migration that if the migrant got attractive job across the geographical boundaries then their contribution in shape of remittance which they send to their nation is greater in the development of the country economy. Recent data shows that remittance flows to developing countries reached $328 billion in 2008 up 15% from $285 billion in 2007.(5)

The research on hand will try to elaborate the causes and effects of migration in context of Pakistan, and especially the role/contribution of remittances to balancing the balance of payment of Pakistan.

2. Literature Review:

2.1. Migration in global perspective:

The very old civilization of the world settled in cities and countries around the Mediterranean Sea and along the cost of Arabia India China and the contents of Europe and Asia. Drifting tribes such as Huns In the 3rd century BC dominated various part of the huge core area of Eurasia. The most amazing military migration was that of 13th century AD Mongol tribes under Genghis Khan who Capture China, Southern Russia, Turkistan, Afghanistan, Iran, Syria ,Asia minor and some parts of Europe.(6) During the mercantile period from 1500 to 1800 the movement of people around the world was dominated by Europeans. During period of industrialization an estimated 48 million emigrants between 10 and 20 percent of the population left in Europe.

In 1970 a huge flow of migrants was received by the northern Europe and America such as Italy Portugal and Spain from Africa and Middle East. In the period of 1970 oil producing rich countries made a Persian Gulf a charming destination for migrants. The new International migrants flow have varied from 2 percent increase between 1970and 1980 to 4.3percent from 1980 to 1990 and 1.3percent from 1990 to 2000.

Less developed and middle income countries now send the most emigrants led by Bangladesh, China, India, Mexico, Pakistan and Turkey. (7) All These Facts and Figures are given in the table below.

Table 1.1:

In the late nineteenth century most international migrants come from better off-Europe Top sending countries in 1900 and 2000.

The table depicts that in the late nineteenth century most of international migrants belong to European countries but the flows of international migrants from poor countries and middle income countries also increase in the year 2000. Over the past 15 years the number of people crossing borders in search of better life has been rising steadily. At the start of 21st century one in every 35 people is an international migrant. If they all live in the same place it would be the world s fifth largest country (8).

2.2. Historical Background in Pakistan:

Migration has been a constant in the history of Pakistan. The 1947 Partition of the Indian Sub continent into two sovereign states India and Pakistan consequence a large scale population transfers.6.6 million Muslims entered Pakistan from Indian region and 5.6 millions estimated Hindus and Sikhs migrated to India. Indeed this was remarkable migration from one region to another.

Qayum et al identify that since 1947 an event that intensely related to migration is the transfer of millions of people from India to Pakistan consequential in a large set up of refugee link around the globe. The total recent Pakistani immigrants are about 7 millions most of them are living in the richer West countries and more then 2 millions living within middle east. So according to his findings Pakistan is one of the major recipient of remittances in the developing countries. Migration to gulf countries begins in 1970 by the mid 1980’s when this temporary was at its peak there were an estimated 2 million Pakistani in the Persian Gulf states making up the largest group in the foreign workers. Their men were remitting more then $3 billion every year to Pakistan (9, 10). According to year book (2004-05) of the ministry of labor the estimates of overseas Pakistanis is over 7 millions including illegal immigrants. (11)

Table 1.2: Pakistan around the world:

Saudi Arabia

1200000

UK

1000000

UAE

500000 ………900000

US

210,410………..600,000

CANADA

250,000

KUWAIT

100,000

Oman

85,000

Germany

52,668

QATAR

52,500

FRANCE

50,5000

Norway

35,000

Source: Year book 2004-05.Govt of Pakistan-Ministry of labor force, Manpower overseas Pakistanis (Overseas Pakistanis division), Pp. 29 to 34.

2.3. Cause and effect analysis of International Migration:

What cause migration? Is the question of million worth. Before going to discuss the main causes of international migration first we little bit discuss some general causes of migration. Psychologically it is very difficult to change the abode however if some problems arise at the living station and it makes difficult to survive there then definitely one can decide to move from their homelands. Basically people take the decision of migration due to lack of employment opportunities, better education facilities, some migrate due to lack of good environment at living place and deficiency of other necessities of life, some time hostility against any group cause migration and there are much more causes that may compel the people to leave there place of birth. So these are some general causes of migration even internally or externally. But I think that the major causes of international migration are two as follows

(1)Lack of better job opportunity at home country.

(2) Lack of better education facilities.

Many researches has been don on international migration and their findings are mostly same that the main cause of leaving own country is no job opportunities or low job opportunities. Unequal income and resource distribution and rising trends of poverty and inflation are the major causes that may compel the people to migrate to other countries and find new world of opportunities for them across the boundaries .Same is the case in Pakistan as the Pakistan is over populated country caught up with unemployment hyperinflation and miserable poverty.

The unemployment rate in the country is 5% at the end of labor force year 2005-6. The rate of inflation measured by CPI reached at its peak in August 2008 at 25.3% and bounced backed to 21.1% in February 2009 (Ministry of finance) (12).According to World Bank report poverty rates in Pakistan are 17.2% in recent years means that 17.2% of the total population are living below the poverty line(13). So these figures revealed the fact that when poverty ridden people find no hope to uplift their lives from vicious circle of poverty and unemployment they may migrate across the boundaries to search new hopes for survival.

Another important cause of migration is search of better education in the technological advance countries. Getting higher and good education from the world best universities are now becoming dream of our youth because of the lack of quality education and jobs opportunities accordingly at the home countries. For this purpose many people decided to leave their country and getting higher education abroad for glooming their future.

Some people also migrate due to close friends and family affiliation when working people feel isolation of their friends’ family and children abroad. To the some extent the phenomenon of international migration can also take place due to lawlessness and war and terror situation in the country. People temporarily migrate due to trade and business activities where the profitable business opportunities are not available in the country due to political instability and distortion.

The above mention causes of migration have also some socio economic impacts on the economy. Migration was very favorable in early economic development literature but due to rapid development in industrialization and huge increase in the phenomenon it now becomes a serious problem like various other macro economic problems. Migration creates threat and opportunity for both sending and receiving countries. The labor force movement particularly from one country to another creates negative and positive socio economic effects. The positive economic effect of migration across the border for sending country is found in remittances. This refers to money transfer sent by migrants to there families. Remittance flows globally currently exceeds USD 100 billons (14).The flow of foreign remittance to developing countries has steadily grown over the past three decades – rising from $18 billion in 1980 to $328billion in 2008. Within developing countries South Asia accounted for 23% that is $74 billion. Pakistan accounted for 9.5% or $7 billion remittances. Pakistan’s worker remittances shows a rising trends over the last one decade (1999/00-2008/09).The remittance flows in Pakistan during 2008-09 has surprised many analysts because in the global economic and financial crunch period (2008-09 ) the Pakistan remittances grew by over 21%.. Remittance are very important for developing countries especially for Pakistan ,because it help in up grading the living standard of Pakistani masses at the same time help them to uplift there self from poverty circle. Remittances play a critical roll in balancing the balance of payments of Pakistan and may convert the deficit BOP into favorable BOP.

In absence of remittances, the current account deficit would have been over $20 billion or 12 per cent of GDP in 2007-08 and $16.4 billion or 9.9 per cent of GDP in 2008-09 which is creating a serious balance of payment crisis. Thus, remittances have played an important role in not only preventing the balance of payment crisis but also helping the country to build foreign exchange reserves (15).

If remittance are the positive sign for sending countries at the same time they has to bear the negative effect in shape of brain drain .Most of skilled and highly educated people move from the country and use there intellects and skills for receiving country. Outflow of the most educated persons from developing countries to the most developed countries of the world is the issue at the fore front of developing countries. For example in case of Pakistan many scientists, engineers, and educationist are working in the most advanced countries of the world .Brain drain has been a persistent problem of Pakistan over the years. According to daily times report “New study of the phenomenon in medicine has reveled that Pakistan is the third leading source of International Medical graduates (IMGs) in the affluent countries. The bureau of emigration and overseas employment estimates that annually about 1000 to 15000 physicians leave the country, of whom 10 to 15% return for net migration of 900 to 1275 physicians (16). Another positive effect for receiving countries is the availability of cheap labor to achieve the benefits of low labor cost. And the cost paid by receiving countries in terms of huge immigrant’s burden on economy may leads to labor market distortion and disturb their social setup as there is possibility to increase criminal activities unemployment problems and so many other problems arise. Analyzing the social impact of international migration we can say that it has some negative effect on the sending country.

The social setup of home country could be disturbed by the culture, customs and the values (acquired) adopted by returned migrants from abroad.

Reduction in local investment and productivity because of low availability of highly skilled workers (17).

There is possibility of another negative effect for receiving countries that if immigrants acquired knowledge, skills and education from their country and they immediately go back to their own home lands it may creates an ordinary supply shock for their economy.

Table 1.2:

Global Commission on International Migration (GCIM) pointed out the following Positive and Negative effects.

Positive effects

Negative effects

Provides opportunities to workers not available in the home country.

€ May ease effect on the domestic market of the supply of excess labor and reduce unemployment.

€ Inflow of remittances (that increase incomes and may lead to improved human development outcomes for recipients) and foreign exchange.

€ Technology, investments and venture capital from Diasporas.

€ Can contribute to increased trade flows between sending and receiving countries.

€ Stimulus to investment in domestic education and individual human capital investments.

€ Return of skilled workers may increase local human capital, transfer of skills and links to foreign networks.

Charitable activities of diasporas can assist in relief and local community Development.

Loss of highly skilled workers and reduced quality of essential services.

€ Reduced growth and productivity because of the lower stock of highly skilled workers and its externalities.

€ Lower return from public investments in public education.

€ Selective migration may cause increasing disparities in incomes in the home country.

€ Loss of fiscal revenue from taxation of workers.

€ Remittances may diminish over time.

€ Inflationary potential of remittances, especially on real estate, in some areas.

€ A ‘culture’ of migration, disincentives to invest locally.

Source: UN/DESA (2004: 97) and other sources. (18)

Discussion:

Comparison of existing study with previous studies ?????.

Conclusion:

Migration rather internal or external raises some management and policy challenges at various levels. What government should do immediately is the decision taking about the problem of residency (Residential problems) and citizenship rights, for both temporary and permanent migrants. Migration is always and everywhere a phenomenon of unemployment. To conclude we can say that international migration remittances transfer of skill broader investment, culture circulation brain drain and brain gain and Diaspora network are the important features of international migration that contribute to sustainable development. On the basis of above positive and negative effects it is concluded to Indeed migration is favorable and desirable but the purpose of the study is that we should try to reduce the phenomenon up to the level where we got its maximum benefits and avoid from receiving its sever costs. On the basis of above cited literature it is highly important for the country to create job opportunity with in the country in order to reap the benefits of highly technical skills employees to accelerate economic development of the country and minimize the social cost face by the citizen of the country. A policy or a set of policies should be designed by the government towards retaining program of doctors by providing them residential facilities, cars, and better remuneration and such facilities should be extended to other professionals like engineers, educationist, etc. A well design strategy should make to reduce inflation and to reinstate the market stability. As we know that migration is positively related to unemployment so government should take sound measures to reduce the unemployment rate that could help to minimize the abroad movement of people.

Another important thing regarding the policy action is that government should make hard and fast rules to control the illegal migration which creates lot of problems for both sending and receiving countries.