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

3. Remittance economy is a community that gets its money from overseas families. People with families overseas had modern appliances in their house and an increased morality.

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.

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.

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

This research paper analyzes the effects of United States aid on the economic growth of Pakistan. The study uses annual data of last ten year for the period 2002-2012. The research study is conduct to check weather united state aid has any impact of positive or negative on Pakistan economy. This hypothesis was tested using panel data series through finance/Statics software SPSS. The role of US aid in promoting economic growth is a debatable issue and remains unsettled at

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.

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.

India currently has the highest amount of remittances in the world with approximately 70 billion US dollars (The Economic Times, 2014) being sent to India in all of 2013. As India is the highest in terms of receiving remittances, it is the most likely be effected by a new, possibly better means of remittance which through Bitcoin. Bitcoin is the world’s first decentralized digital currency launched in 2009 as open source software (The Economist , 2013). It is a peer to peer network and transactions do not go through a bank which gives many advantages over fiat money. The fees are much lower, you can use them in any country, and your account cannot be frozen. To send Bitcoins from one digital wallet to another no matter where each wallet is located, is a fast process with an optional miniscule fee. The larger fee you put, the faster the transaction will be processed. You do not need to give any personal information to anyone to send the money and therefore in this sense it is anonymous. When you download and open the digital wallet, it will generate an address, similar to an email address. With the digital wallet you can easily send and receive an amount of Bitcoins from one address to another, just as you would with sending and receive

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

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

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

Pakistan gained its independence in 1947, and was mostly under martial law until 1984, four years before the IMF started granting loans to Pakistan that would never be repaid. Despite having a historic culture and ample natural resources, Pakistan as a country cannot seem to keep it’s head above water financially. Doctor Ehtisham Ahmad of the London School of Economics says,“11 out of 12 IMF programs since 1988

Public funding in the economy played a vital role in rapid growth and transformation of S. Korea and now has become one of the powerhouses of Asian economy. On the other hand Nepal’s government expenditure is relatively very low. There has been slight improvement from the time frame 5 years but still remains very low. Nepal is receiving huge amount of remittance from abroad but the government still do not have any policies that can fetch the remittance and use it on the development projects. It has been vital for Nepal to learn some lessons from South Korea in harnessing the remittances and using them in the productive

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).