Record Emigration: Economic Instability Forces Pakistan’s Best and Brightest to Depart

Economic challenges are prompting skilled workers to leave Pakistan, resulting in a significant talent drain from banks, hospitals, and multinational companies. Asad Ejaz Butt, a prominent economist, returned to Pakistan after completing his graduate studies in Canada, eager to contribute to his country’s development, according to a Bloomberg report.

However, despite holding prestigious positions under two finance ministers, he found it increasingly difficult to make ends meet. Inflation rates of the country rose above any Asian nation,  Butt could no longer afford basic necessities, including rent. Ultimately, he left his esteemed government job and returned to North America to pursue another advanced degree.

“Passion to do something for the country was subdued by this economic responsibility and by salaries constantly being beaten by growing inflation,” Butt shared from Massachusetts. “That was, for me, the tipping point.”

Butt’s experience highlights a significant trend in Pakistan: a severe brain drain during one of the country’s most challenging periods. Economic instability is prompting skilled professionals to leave, leaving banks, hospitals, and multinational corporations struggling to fill crucial roles, Bloomberg reported.

In 2023, Pakistan recorded its highest emigration rate in years, according to the United Nations. The outflow is particularly pronounced among the educated elite,with one million skilled workers including the doctors, engineers, managers etc. emigrating during the past three years and thus making Pakistan in top ten emigration countries.

This exodus presents Pakistan with some major problems although it needs its best brains to steer it in the darkest of economic periods. Mismanagement and political crisis instability have caused consumer prices to double, leading the International Monetary Fund (IMF) to provide a $7 billion bailout due to insufficient dollar reserves for debt payments.

While migration for better opportunities is common, business leaders note that confidence in the country and its leadership has plummeted. Veqar Islam, CEO of JBS, stated that Pakistani professionals are more hopeless than ever and about 40% of the population wants to move abroad, and there is an unprecedented interest in US visas.

“There’s a difference between people wanting to leave for better opportunity and people desperate to leave because there’s nothing left,” Islam noted.

Companies are struggling to retain talent in critical sectors like technology and finance. TPL Corp, which operates in real estate, insurance, and venture capital, has started offering traveling facilities for regional posts and has been compensating a part of the salary in US dollar to get the best persons. In fact, last year, two large banks were quoted to have had a record number of employees seeking transfer to offices outside Pakistan, information which some insiders who wanted to remain anonymous said.

To cope with inflation, JBS has exceeded its annual operating budget to remain competitive and retain staff. Islam stated, “Can organizations in an economic downturn give this kind of an increment? The answer is no.”

The financial sector has faced significant challenges, with major brokerages experiencing widespread employee resignations. Companies often struggle from several months to find talented replacements. While the Pakistan stock market became the best performing market in the world thanks to IMF loans, very few bankers and traders decide to remain in the country.

Mohammed Hunain, a certified financial analyst, moved to Saudi Arabia despite being among the top 5 percent of earners in Pakistan. He expressed concern for the youth, who earn between 50,000 to 200,000 Pakistani rupees ($180 to $720) monthly. This income makes it nearly impossible to leave the country and difficult to survive, as consumer prices have risen three to four times higher than in neighbours such as India and Bangladesh over the past five years.

“It’s very alarming and difficult to make ends meet,” Hunain remarked.

Since outflow rates increase, Pakistan stands first in family visa applications to the United Kingdom and some suggest that the corresponding increased remittances may help bolster the economy through increased dollar receipts. Pakistan, which suffers from chronic dollar deficiencies, depends on overseas employees who remit about $30 billion each year.

But officials understand that a country cannot develop by exporting its human capital. First, the government did not increase the taxes of the high income earners with an aim of reducing emigration but this strategy is evolving. To meet IMF program requirements approved in September, officials have raised the total tax revenue target by 40%. Exporters, previously exempt from taxes, now face an increase from 1% to 29%.

In private cabinet meetings, officials have debated the consequences of taxing the wealthy. One group fears alienating top earners, while another stresses the importance of securing the IMF deal, no matter how painful in the short term, to build a stable Pakistan economy.

Ali Pervaiz Malik, the state minister for finance and revenue, stated talent leaving “is something that we must be cognizant of.” But with inflation lately easing, he said now is the time to “bring hope back to the people.”