American Journal of Scientific Research

ISSN 2301-2005 Issue 83 December, 2012, pp.48-57

© EuroJournals Publishing, Inc. 2012
http://www.eurojournals.com/ajsr.htm

Remittances, GDP and Youth Unemployment: Do

Remittances have Positive Impact on GDP of Pakistan?
If yes, how can the Government Increase them?

Muhammad Umar
Department of Management Sciences
COMSATS Institute of Information Technology, Vehari Pakistan
E-mail: muhammadumar@ciitvehari.edu.pk; umare_umare@yahoo.com
Tel: +92-333-8613754

Abdul Razzaq Azad

Department of Management Sciences
COMSATS Institute of Information Technology, Vehari Pakistan
E-mail: abdulrazzaq@ciitvehari.edu.pk
Tel: +92-345-7100137

Mazhar Abbas
Department of Management Sciences
COMSATS Institute of Information Technology, Vehari Pakistan
E-mail: mazharabbas@ciitvehari.edu.pk
Tel: +92-333-6050908

Abstract

This research paper explores the answers of the following two questions. First, do
workers’ remittances have positive impact on Gross Domestic Product (GDP) of Pakistan?
Second, how can the government increase remittances if they have positive impact on
GDP? In order to find the answer of the first question, simple linear regression has been
used. The analysis reveals that there is a positive correlation between remittances and GDP.
The most important finding is that when remittances increase by one million dollars our
GDP increases by approximately eleven million dollars, keeping all other variables which
affect the GDP constant. As it is obvious from the above analysis that remittances have
positive impact on GDP of Pakistan so the next question is how the government may
increase them to increase GDP? The answer to this question is that the government can
increase remittances by sending its unemployed youth abroad to earn livelihood. Simple
logical reasoning has been used to find the answer of the above mentioned question. The
paper also describes eight simple steps which the government may follow to increase
number of Diasporas which will result in higher remittances and hence higher GDP.

Keywords: Remittances, GDP, youth Unemployment, Dutch Disease

Remittances, GDP and Youth Unemployment: Do Remittances have
Positive Impact on GDP of Pakistan? If yes, how can the Government Increase them? 49

1. Introduction
This paper explores the answers of two questions. First, do workers’ remittances have positive impact
on the GDP of Pakistan? Second, how the government may increase its remittances if they have a
positive impact on our GDP? The idea originated from the news that Pakistan has received the
remittance worth more than $13 billion in the fiscal year 2011-12, which is the record in the history of
Pakistan. In the fiscal year 2010-11, the country received remittances worth $8.9 billion hence a record
increase of 48% over the period of one year. The remittances received by the country has more than
doubled over a period of 4 years as in fiscal year 2008-09 remittances received were $6.45 billion.
The reason for the selection of the first question was to know that whether remittances have
positive impact on GDP growth of Pakistan or not as there is a great debate going on between two
schools of thought that whether remittances have positive impact on the economy of receiving country
or not? One school of thought believes that the remittances have positive impact on the economy in the
short run but their long run impact depends on the usage of remittance. On the other hand, other school
of thought believes that remittances do not have positive impact on the economy. This school of
thought gives the argument that there is not a single country which has made progress by receiving
remittances. They rather believe that remittances have negative impact on the economy because of the
“Dutch Disease”. The “Dutch Disease” refers to the consequences arising from large increase in a
country’s income. So, this paper will tell us that what is the case of Pakistan? Do the remittances affect
the economy of the country positively or negatively? By the findings of the study, we shall be able to
stand with one of the schools of thought regarding remittances’ impact on GDP.
Let’s now move to the second question which states that how can the government increase its
remittances if they have positive impact on our economy? The reason for the selection of this question
is that the answer of first question will only tell us that what has happened in the past. It merely helps
in the policy formulation. So, the purpose of the second question is to provide the suggestions to the
government on the basis of whom the government may make policies which will ultimately help the
country to make progress.
Currently the Pakistan is facing many challenges like rapidly increasing population, higher
unemployment rate, shortage of energy/electricity, terrorism & extremism, falling value of rupee and
poor economic performance etc. This research paper suggests that how the government may use its
unemployed youth to overcome above mentioned challenges. According to some estimates sixty
percent of the total population i.e. 108 million are youngsters and most of them are unhappy because of
above mentioned problems and want to go abroad to earn their livelihood. The idea of sending youth
abroad has been derived from the popular phrase “Human resources are the most important assets”.
The paper suggest eight simple steps which may be followed by the government to increase the
number of diasporas and hence remittances. These steps are; Plan to increase remittances, Establish
Institutions for technical and professional training, Select unemployed youngsters for training, Impart
hard and soft skills by training, Send the skilled workers abroad, Remain in contact with them, Provide
them training and resources to convince the companies to import the material, labor etc from Pakistan
or start their own businesses overseas, Reward and punish them according to their performance.
Abeyance of above mentioned steps will affect our economy through following ways. After
reaching abroad, youngsters will earn and send their hard earned money back home. This will result in
increased remittances which will have a positive effect on our balance of payment and hence economy
in short run. Training the overseas Pakistanis will result in higher export and positive impact on our
economy in long run. As a result of the above mentioned activities, unemployment, hopelessness and
crime rate will reduce. This will ultimately result in higher inflows of dollars, hence a better balance of
payment account, foreign exchange reserves and exchange rate, as a result of which inflation may
decline, foreign direct investment will increase, economy will grow and Pakistan will make progress.
In order to find the answers of above mentioned questions to provide suggestions, two different
techniques have been used. To find the answer of first question, regression analysis of the GDP (at
constant factor cost) and remittances of 37 years has been done and to find the answer of the second
50 Muhammad Umar, Abdul Razzaq Azad, and Mazhar Abbas

question, simple logical reasoning has been used. The logical reasoning is based upon the relationship
of the remittances with the number of Diasporas, their skills and the initiatives taken by the
government to increase the remittances.
Remaining article is organized as follows. Section II discusses the review of previous studies;
section III describes the current data regarding overseas Pakistanis and remittances. Section IV is about
the methodology adopted for analysis. Findings of the study are mentioned in the section V and
Conclusion and recommendations are mentioned in the last section i.e. section VI.

2. Previous Research
In order to find the answers of the research questions review of existing literature was done to know
that if some other researcher has done work on the topic and if yes, what were his/her findings.
Literature review reveals that a lot of work has already been done on the topics like, remittance, youth
unemployment, economic development, crime rate and their relationship with each other. Findings of
some of the prominent researchers have been mentioned here.
Adam and Page (2006) conclude that remittances are a very important and stable source of
capital for developing countries. They found out that remittances have direct as well as indirect effect
on the receiving countries. Direct impact include poverty reduction, offset of balance of payment
deficit, reduction of foreign exchange shortages and productive investment etc. The indirect effects
include easing of capital and risk constraints, the release of other resources for investment and the
generation of multiplier effects of consumption spending. They believe that remittances are not a
panacea and cannot substitute sound economic policies in developing countries.
Braga et al. (2008) found no statistical evidence that remittances, through a traditional income
effect, reduce individual labor market participation. They states that remittances are beneficial in short
run because they reduce poverty and increase consumption opportunities. However, their long run
impact on the economic system’s pattern could be both positive and negative depending on how they
are used. On one hand, remittances will increase household income which will ease financial
constraints, allowing to invest more in education and entrepreneurial activities, which will have a
positive effect on economy in long run. On the other hand, remittances may generate a standard
neoclassical income effect on labor supply in countries with lower labor demand in particular, where
the families could become remittances dependant to fulfill their needs.
Contrary to Adam and Page, some of the analysts believe that remittances have a negative
impact on economies of receiving countries. Barajas et al. (2009) found out that remittances have
contributed little to economic growth in remittance receiving economies and may have even retarded
growth in some cases. They support their findings by the evidence that there is not a single country in
which remittances led growth contributed significantly to its development.
Contrary to Braga et al., Orrenius et al. (2009) found that remittances do have positive impact
on economy of Mexico. The remittances lead to improved labor market conditions with higher
employment, high wages, lower unemployment rates and hence a better economy. As long as the
school enrollment is concerned, they did not find any effect of remittances on school enrollment. They
are not much confident about their finding regarding enrollment because they used state data instead of
household level data.
Xiaohui Hou (2011) found out that most of the challenges to youth employment are not youth-
specific rather, so, stressed the need for broader market reforms. However, the researcher found that
some of the issues are youth specific like unemployment rate for better educated youth is much higher
and the initial earnings of better educated youth is also not much different from those of less educated
youth.
Rapidly increasing population, unemployment, shortage of electricity and poor economic
performance are the challenges, generally faced by developing countries like Pakistan. Gillani et al.
(2009) proves that crime is caused by unemployment, poverty and inflation in Pakistan. They found the
existence of long run co-integration relationship among crime, unemployment, poverty and inflation.
Remittances, GDP and Youth Unemployment: Do Remittances have
Positive Impact on GDP of Pakistan? If yes, how can the Government Increase them? 51

Shahnawaz et al. (2011) mentions that globalizations does not have any impact on employment
generation in Pakistan but they believe that the proxy variables of the globalization i.e. foreign direct
investment and workers’ remittances are statistically significant and more responsive to generate
employment opportunities in Pakistan. They also found that literacy rate have a negative impact on
employment which confirms the finding of Xiaohui Hou of World Bank that unemployment rate is
higher for better educated as compared to less educated youngsters.
Ahmad and Azam (2010) found that in Pakistan a large percentage of youth start their early
career and a significant percentage of youth are inactive i.e. they do not take part in the economic
development of the country. Their study further reveals that unemployment level of youth is higher in
urban areas as compare to the rural areas. They also found that the youth of Baluchistan are more
willing to work but are unable to find it as compared to other provinces.
Higher youth unemployment is not the issue of Pakistan only. Many of the developing
countries and even some of the developed countries are suffering through this crisis. Ljubljana (2007)
mentions that youth unemployment rate in Kosovo is much higher. According the statistics, it was
more than 70 percent in 2005 but unlike Pakistan, the unemployment rate of better educated people is
less than that of less educated people in Kosovo.

3. Overseas Pakistanis and Remittances: Descriptive Analysis of Data

Remittance means a sum of money sent, especially by mail, in payment for goods and services and as a
gift. This paper focuses on the money sent by the Pakistanis living and working abroad by mail i.e.
workers’ remittance only. In case of Pakistan the workers’ remittances have been increasing over the
years which is having a positive effect on balance of payment and ultimately on our economy. Pakistan
has received more than $ 13 billion in the last fiscal year of 2011-12 and ranked as 5th largest
remittances receiving country in the world. Some of the analysts believe that the amount will increase
to $ 20 billion per year and will become stagnant at that level. This paper explores the answers of the
two questions mentioned in the title of the paper.
To begin with, let’s have a look on the statistics of the overseas Pakistanis and remittances sent
by them. This will help us to determine that whether the remittances have positive impact on our GDP
or not and if yes, how the government may increase them by using unemployed youth. According to
Statistics, in 2012, there are 6.7 million Pakistanis living in more than 54 countries around the world.
Out of this 6.7 million only 3.7 million have National Identity Card for Overseas Pakistanis (NICOP).
These 3.7 million having NICOP have got the right to vote on February 15, 2012 by the Election
Commission of Pakistan (ECP), as a result of the efforts of chairman Pakistan Tehreek-e-Insaf (PTI),
Imran Khan. This is a very good move because overseas Pakistanis are more patriotic and have more
exposure than the ones living in the country, hence better able to decide their fate. This will also
provide them the sense of ownership and they will become more committed to their homeland.
Following table shows that how 6.7 million diasporas are dispersed in different countries around the
world and how much remittances they send in fiscal year 2011-12.

Table: Number of Pakistani Diasporas with respect to countries and remittances sent by them in 2011

Serial # Country Name Pakistani Diasporas (million) Remittances Sent $ (million)

1 Saudi Arabia 1.70 3,668
2 Great Britain 1.20 1,521
3 United Arab Emirates 1.20 2,848
4 United States of America 0.90 2,334
5 Canada 0.30 178
6 Oman 0.20 383
7 Kuwait 0.15 583
8 Greece 0.09 10
52 Muhammad Umar, Abdul Razzaq Azad, and Mazhar Abbas
Table: Number of Pakistani Diasporas with respect to countries and remittances sent by them in 2011 -
continued

9 Germany 0.078 89
10 France 0.06 45
11 Denmark 0.03 26
12 Australia 0.027 114
13 Other Countires 0.71 1,388
Total 6.70 13.187
Source: Dawn of February 25, 2012

Out of 6.7 million Pakistani expats 1.7 million are living in Kingdom of Saudi Arabia (KSA),
1.2 million in Great Britain (GB) and United Arab Emirates (UAE) each, 0.9 million in United States
of America (U.S.A.), 0.3 million in Canada, 0.2 million in Oman, 0.15 million in Kuwait, 0.09 million
in Greece, 0.078 million in Germany, 0.06 million in France and Scotland each, 0.03 million in
Denmark, 0.027 million in Australia and rest 0.71 million are living in other countries around the
world. According to the State Bank of Pakistan (SBP), country received $ 13.187 billion dollars in
fiscal year 2011-12. Amount received from the USA is 2,334 million US dollars, 1,521 million from
UK, 3,687 million from S.A., 2,848 million from UAE, 178 million from Canada, 383 million from
Oman, 583 million from Kuwait, 10 million from Greece, 89 million from Germany, 45 million from
France, 26 million from Denmark, 114 million from Australia, 9 million from Japan and remaining
1388 million from the other countries around the world. So the Pakistan received maximum amount of
3,687 million US dollars in terms of remittances from Saudi Arabia, 2,848 million from UAE-the
second highest and 2,334 million from US-third highest.
Analysis reveals that every Pakistani living abroad sent 1,968 dollars on average in the fiscal
year 2011-12. Every Pakistani expat in Australia sent 4,238 US dollars over the above mentioned
period and got the first position on the basis of remittances per capita. Pakistani expats in Kuwait stood
second in this race by sending 3,883 US dollars in the last fiscal year. Pakistani living in America and
UAE stood third and fourth in this race by sending 2,593 and 2,374 million US dollars respectively.
Above mentioned facts and figures are about the fiscal year 2011-12. Let’s now compare year
2011-12 with the previous years to have understanding of the pace of growth of remittances. The graph
below shows the remittances received by Pakistan from 2006 to 2011.

The amount received in the form of remittances in 2006 was 4.6 billion US dollars; in 2007 it
increased to 5.5 billion dollars, in 2008 it further increased to 6.45 billion dollars. It was the year when
the dictator General Pervaiz Musharraf left the power and new coalition government led by PPP take
the charge of the country. In 2009 and 2010 the amounts received were 7.81 and 8.9 billion dollars
Remittances, GDP and Youth Unemployment: Do Remittances have
Positive Impact on GDP of Pakistan? If yes, how can the Government Increase them? 53

respectively. The amount received in 2011 is 13.2 billion dollars, 48% higher than the amount received
last year. Trend line shows that in 2013 the amount may increase to $ 16 billion, if the current trend
continues.
Estimates show that the number of Pakistanis going abroad to earn livelihood is increasing at a
relatively faster pace. In 2007 the number of Pakistani Diasporas was 5.1 million which has increased
to 6.7 million and according to some estimates more than seven million, hence an increase of more
than 30 percent over the period of five years. On the other, the remittances sent by Diasporas were 5.49
billion in 2007 which has increased to 13.2 billion in 2012, hence and increase of 140 percent over a
period of 5 years. The rate of increase of remittances is much higher as compared to the rate at which
the number of Diasporas has increased.
According to the analysts, there are two main reasons for the rapid increase in workers’
remittances. Number one is the establishment of Pakistan Remittances Initiative (PRI) and the second
reason is the increase in number of skilled young Diasporas. PRI is the joint venture of State Bank of
Pakistan, Ministry of Finance and Ministry of Overseas Pakistanis. There are four basic roles of PRI;
1) preparation of national strategies on remittances, 2) taking all necessary steps to implement the
overall strategy, 3) playing the advisory role for financial sector in terms of preparing a business case,
relationship building with overseas correspondents, creating separate efficient remittance payment
highways, 4) Becoming a national focal point for overseas Pakistanis through round the clock call
centre (021-111-222-774) with toll free lines, separate website etc. As a result of the efforts of PRI the
expats who used to send money home by Hundi or Hawala have started using the legal channel, which
has resulted in higher documented remittances.
The other reason of increase in remittances is the rapid increase in the number of highly
qualified and highly skilled young Diasporas. The number of diasporas was 5.1 million five years ago
which has now jumped to around seven million, an increase of more than thirty percent i.e. four lakh
Pakistanis joined the group of diasporas, every year on average, during last five years. It has been
observed that average income of the Diasporas has increased because the young people who are
leaving country to work abroad are well trained and highly skilled so get higher salary as compared to
the old and low skilled Diasporas. As a result of which average income of Diasporas has increased.
The evidence is the remittances per capita from Australia are the highest, where young and highly
skilled Pakistani Diasporas live.
However, some of the analysts are of the view that this amount will become stagnant after
achieving a mile stone of $ 20 billion per year. They support their argument by saying that apparent
increase in inflow of remittances is because of the documentation of the transfer of funds. The increase
in the documented remittances is higher than the actual increase in inflow of remittances as a result of
the efforts of Pakistan Remittance Initiative (PRI) - a joint effort of State Bank of Pakistan, Ministry of
Finance and Ministry of Overseas Pakistanis. The Diasporas who used to send money home by Hundi
or Hawala have started sending through legal channel as a result of the efforts of above mentioned
body. The analysts believe that when all the remittances will come through legal channel, this rapid
increase will slow down. They are right to a certain extant so the government should make the policies
to maintain this positive trend otherwise our balance of payment and economy will get disturbed as our
exports are decreasing and imports are increasing day by day. Workers’ remittances are the strength of
our country so we should focus on it to get competitive advantage over others.
The government may maintain the above mentioned trend of remittances by using its frustrated
youth by sending them abroad. This will reduce unemployment and crime rate in the country in short
run and at the same time will result in higher remittances and a higher GDP. The government may send
its unemployed youth by following the following eight steps. These steps are; 1) Plan to increase
remittances, 2) Establish Institutions for technical and professional training, 3) Select unemployed
youngsters for training, 4) Impart hard and soft skills by training, 5) Send the skilled workers abroad,
6) Remain in contact with them, 7) Provide them training and resources to convince the companies to
import the material, labor etc from Pakistan or start their own businesses overseas, 8) Reward and
54 Muhammad Umar, Abdul Razzaq Azad, and Mazhar Abbas

punish them according to their performance. Government may perform the above mentioned activity
by formulating a body having representation from Ministry of Overseas Pakistanis, Overseas
Pakistanis Foundation, Bureau of Emigration and overseas employment, Pakistan overseas
employment promoters association, Ministry of Finance, State Bank of Pakistan, Ministry of
Commerce and Pakistan Bureau of Statistics

4. Data and Methodology

In order to find the answer of the first question, the data regarding remittances and GDP (at constant
Factor Cost of 1959-60, 1980-81, 1999-00) was obtained from the State Bank of Pakistan website.
Time series data of GDP was available from 1950 to onward but the data for remittances only traces
back to 1973. So, the data for both the variables from 1973 has been used for analysis. Data for GDP is
based on constant factor cost. The base year for the data from 1973-80 is 1959-60. The base year for
the data from 1981-99 is 1980-81 and the base year for the data from 2000-10 is 1999-00. The data for
remittances traces back to 1973 only, because before that only a few of Pakistanis were working
abroad.
Statistical tool used to get the answer of the first question is simple linear regression. The
formula for this analysis is
Y = α + βX
It is obvious from the above equation that there are only two variables Y and X. Y is the
dependent variable which represents the GDP (at constant factor cost) and X is our independent
variable which represents workers’ remittances. Whereas α represents the Y intercept and β represents
the slope or the rate of change. It means that the GDP will assume a value α even if remittances
received are zero.
To find the answer of the second question, data regarding youth, unemployment, diasporas,
remittances, and GDP was obtained from State Bank of Pakistan, Bureau of Emigration and Overseas
Employment, United Nations. Simple logical reasoning has been used to find the answer of the second
question. As the analysis reveals that there is a positive correlation between number of diasporas and
remittances so the simplest possible way to increase remittances is to increase number of diasporas. In
order to increase the number of Diasporas, the government should focus on unemployed or inactive
youth. The government should make a strategy to train them and send them abroad so that they may
earn more and hence send more money back home. This will result in lower unemployment, lower
crime level, higher remittances and hence a better GDP.

5. Empirical Findings
In order to discuss the findings of the results of regression analysis for question number one, let’s begin
with significance of the results. The results of the analysis are statistically significant which is obvious
from the very low value of Significance F. The value of Significance F shows that the probability that
the regression output could have been obtained by chance is zero. It means that a relationship do exist
between these two variables. The P value of the X is also very low which means that coefficient or Y-
intercept is valid. It also means that the results have not occurred by chance. Let’s now move to the
value of R Squared. Its value is 59.12% which means that 59 percent of the variation in GDP is
explained by the variation in remittances. The value of the standard error, given by the regression
analysis is 18,443.27 which means that there is a huge variation in data. At the end, we may conclude
that remittances do have a positive impact on the GDP of Pakistan.
Analysis reveals that there is a positive correlation between the number f diasporas and the
amount of remittances received. The number of diasporas has increased by more than thirty percent
during last five years. On the other hand the remittances has increased by 140 percent over the same
period. The reason for this rapid increase in remittances is that new young diasporas are highly
qualified and hence get better salaries. Government should send the youth as these strata is in
Remittances, GDP and Youth Unemployment: Do Remittances have
Positive Impact on GDP of Pakistan? If yes, how can the Government Increase them? 55

abundance in the country. This is how the government will be able to have more remittances and hence
a better economy.

6. Conclusion
Conclusion of the research is that YES, remittances do have a positive impact on the GDP of Pakistan.
The analysis reveals that when our remittances increase by one million dollars the GDP increases by
almost eleven million dollars. Other finding of the study is that the government may increase
remittances by sending its unemployed youth abroad to earn their livelihood. This will have a dual
impact, first, unemployment, frustration and hence crime rate in the country will decline. Second the
increase amount of remittances sent by the Diasporas will result in higher GDP.
The government should make such policies that workers’ remittances alone balance all the
payments for imports. As a result of it the remittances earned by export will add up to our foreign
exchange reserves which will have a positive effect on our currency and ultimately on our economy.
Following are some suggestions whose implementation will result in maintaining upward trend of
remittances in the long run as well.

7. Recommendations
Pakistan Remittance Initiative (PRI) should increase its efforts to convince the Pakistani expats to send
remittance through legal channel. This could be done by providing them best exchange rate and
collecting the money from their door steps. The government may do this through embassies and
consulates in different cities around the world. Pakistani banks and particularly National Bank should
open its branches overseas or should join hand with the companies which transfer money to Pakistan.
PRI may take some other steps to increase the remittances.
Data reveals that the remittances received are directly proportional to the number of expats.
Pakistan received highest remittances of $ 3,353 million dollars from Saudi Arabia where the
maximum number of Pakistani expats (1.7 million) live. So, the government should make plan to
increase the number of expats. It should set a target of sending at least one individual from every house
in Pakistan abroad. It will have multiplier effect on our economy and well being of masses. It will
increase remittances, reduce unemployment in the country and hence poverty as a result. Task of
sending at least one individual from every house may be granted to the Ministry of Overseas
Pakistanis.
As the Xiaohui Hou mentions that unemployment rate for better educated youth in Pakistan is
much higher and their initial earnings are not much different from those of less educated youths so the
government should provide the top priority to better educated youth. University graduates must be
given top priority followed by the college graduates and so on so forth. Better educated youth must be
earning more as compared to the less educated ones and hence sending more money back home.
Secondly, the better educated youth will portray a good image of the country as compared to less
educated ones. By doing this the country will not only get more remittances but also a better image.
Analysis also reveals that highest per capita remittances are received from Australia, Kuwait,
America and United Arab Emirates respectively. So the government should particularly approach the
governments of above mentioned countries and ask them to hire more Pakistanis to perform different
jobs in their countries. So, overall number of expats must be increased in all countries in general and
above mentioned countries in particular.
Along with the above mentioned countries, the government should try to increase the number
of Pakistani expats in the countries which do not give nationality because the expats living in these
countries are bound to send their hard earned money back home. On the other hand the expats living in
the countries, who give nationality, send money back home for a particular period of time and then
after getting nationality they prefer to invest in that country rather than sending money to Pakistan.
56 Muhammad Umar, Abdul Razzaq Azad, and Mazhar Abbas

It is a fact that highly qualified and highly trained workers get higher salaries and vice verse’.
Unfortunately, most of the Pakistanis working abroad have lower qualification and lower level of skills
as a result of which their salaries are lower as well. On the other hand, the workers from India are
relatively highly qualified and well trained. It is also because of this reason; India is the country which
receives maximum remittances from abroad as compared to any other country in the world. So, the
government of Pakistan should make the policies to enhance the qualification and skills of its human
resources. This will result in higher level of salaries and higher level of remittances as a result.
Government should launch different schemes where Pakistani expats may invest their money.
The schemes should be guaranteed by the government of Pakistan and promise high return and
moderate level of risk. Government should give tax exemptions, provide basic infrastructure and
facilitate overseas Pakistanis so that they investment in their home land. As a result of this our Foreign
Direct Investment (FDI) will increase, employment opportunities will be generated and the country
will make progress.
Last but not least, the government should make it mandatory for every Pakistani going abroad
to get a training of at least two weeks. In this training expats must be taught that how should they
behave in foreign land as the ambassadors of Pakistan. This will help the country to improve its
deteriorating image in the world. This responsibility may be assigned to the body suggested at the end
of the introduction part.

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