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Saudi Arabia Endures As A Top Remitter To Pakistan

October 10th, 2017

Foreign Remittance to Pakistan

Saudi Arabia and Pakistan have long had cultural, economic and political links. The nations are bound together financially by the large number of Pakistani expatriates working and residing in the Kingdom of Saudi Arabia – and sending money home to their friends and family.

There are around 2 million Pakistani nationals living and working in Saudi Arabia.1 In fact, the country is the largest market for Pakistani workers anywhere in the world.2 There are thousands of Pakistani nationals in Saudi Arabia; working in a diversity of roles – from business decision-makers to drivers, blue-collar workers and customer service representatives.

This Pakistani diaspora helps link the two economies through remittances. These remittances play a major role in adding value to Pakistan’s economy. Collectively, remittances from around the world to Pakistan help foot half the country’s import bill, and cover trade deficits.3

Despite economic fluctuations and oil price shocks, remittances from Saudi Arabia to Pakistan are going strong, and actually witnessing growth. Data from the State Bank of Pakistan for the Fiscal Year 2016 (ending June 30th 2017) shows that remittances from Saudi Arabia made up around 30% of all remittances to Pakistan, hitting a high of around USD 6 billion – compared to USD 5.6 billion in Fiscal Year 2015. All told, remittance flows grew by around 6% between FY 2015 and 2016.

Here then is a relationship that promises to endure. It’s a link forged at government and political level, but also one reaffirmed at grass roots level by people. It is true that change is afoot – and Saudi Arabia’s economy is liberalising. And the construction sector has shed jobs due to a slowdown directly linked to lower oil prices and austerity policies. But these changes, for now, are mere ripples that are being adapted to. Anecdotal evidence suggests that laid-off workers have either been replaced by other Pakistanis, or have found new roles in the Saudi economy. There is no evidence of a wholesale economic slowdown. Nor do figures point at any sort of exodus.

Saudi Arabia will continue being a top remitter to Pakistan for the foreseeable future. And all the Pakistanis working overseas in Saudi Arabia to support friends and family back home can continue feeling justifiably proud. Their efforts are collectively adding billions of dollars to the Pakistani economy and improving standards of living there.

 

References

1. https://en.wikipedia.org/wiki/Overseas_Pakistani

2. https://www.arabnews.com/node/953306/saudi-arabia

3. https://tribune.com.pk/story/1322889/remittances-saudi-arabia-take-hit-january/