1. The International Organization for Migration (IOM) Dialogue on ‘Return Migration’ Impact of Return Migration on the Pakistani Economy
Presentation by the Centre on Migration, Remittances and Diaspora (CIMRAD), Lahore School of Economics
23 February 2017
Islamabad

2. About CIMRAD
The Centre on International Migration, Remittances and Diaspora (CIMRAD) was established in 2014 by the Lahore School of Economics and is the first institute of its kind in Pakistan. The Centre specializes in the study and analysis of international migration and its social and economic consequences –with a focus on the diaspora, the flow of remittances and return migration.

3. Migrants and Remittances
After foreign direct investment, remittances are the second largest source of capital inflows
Over 7 % of the GDP
Massive shift of remittances from urban to rural areas in all areas except Balochistan – to
Urban areas shift from Karachi and Lahore to Gujranwala, Faisalabad and Rawalpindi
Rural areas shift from Gujrat, Swat and Dir to Gujrat, Mandi Bahauddin and Sialkot

4. Impact of Return Migration on Employment
Issue of return migration emerged in the late 1970s and early 1980s
ILO-ARTEP Study (1984)on the Impact of Return Migration on Domestic Employment in Pakistan: a Preliminary Analysis carried out for the Ministry of Labour, Manpower and Overseas Pakistanis, GOP
(i) the extent of return migration with an attempt to differentiate between temporary and permanent returnees and,
(ii) the impact of return migration on the functioning of the domestic labour market and its influence on overall employment generation in the economy

5. Issues in absorption of return migrants
Return migrants may not wish to return to manual work
Possibility of skill shortages and need for skill development programmes – changing demand patterns for different skills
Shortages in certain key skills induced by the pattern of expenditure of remittances – tendency for use of capital intensive technologies which will have an adverse impact on the long tem labour absorptive capacity of he economy

6. Issues …. Absorption of educated unemployed likely to be more acute
Investment in real estate – land ‘bubble’
Facilities and inducements for investment
Expectation of higher wages by returnees – preference for skilled and semi-skilled jobs
Demand for better health, education and housing facilities
Demand for consumer durables requiring capital intensive technologies
Constraints: unreliability of available data based on PLM survey (1979) estimates and Airport Survey (1982)
Data issues as many returnees use new passports or different names

7. Return Migrants and the Domestic Labour Market
Unemployment rates are much higher among return migrants than among non-migrants. Although this difference has narrowed with time, even among those who returned to Pakistan at least 18 months prior to the surveys, more than 10 percent of workers are unemployed.
Reintegration pattern of return migrants: variables indicating their human capital such as occupation and pre- migration and during-migration work experience appear to have greater influence on their re-absorption than the variables related to economic positions such as savings.
The possibility is that unemployed returnees cannot save enough from their overseas earnings to become self-employed.
(Reintegration of Pakistani Return Migrants from the Middle East in the Domestic Labour Market- GM Arif 1998)

8. Preferences of Returnees
Rural labourers on return show preference for jobs outside the agricultural sector
Returnees preference to move into business and trading – small scale industry, bonds, retail shops, transport
Returnees moving into the informal and service sector
More innovative, technologically advanced
Impact of cultural values of the host country on return migrants has been both positive and negative

9. Oil prices and return migration
An investigation of the relationship between oil prices, labour demand and remittance flows between Saudi Arabia and Pakistan (Mphil thesis 2016) shows that:
Fluctuations in the price of oil since 2008
Recent downward trend
In the long run if the lower oil prices are likely to persist, financial buffers will be used up quickly as government revenue will be reduced.
The demand for labour will slow down as the government expenditure is cut down.
As a result the return flow of migrants may also increase.

10. Increased Possibility of Return
Since the immigration policies of the oil-rich countries are restrictive, the migrant workers who are on contract for limited number of years have to keep close ties to their home countries and send as much money as possible back home.
Study underway to look at ‘contract migration’ and its impact on the economic status of households and the community
An earlier study points to to higher rate of returnees in Punjab compared to other provinces

11. Lack of Data on Returnees
1980 PIDE/World Bank Survey of Return Migrant Households
1986 ILO/ARTEP Survey of Return Migrant Households
Population Census