Pakistan Is Getting Too Expensive For Its Middle Class – So They’re Leaving
Nov 5, 2024
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Faseeh Mangi, Bloomberg’s Pakistan Bureau Chief, shares deep insights into Pakistan’s economic crisis, particularly the alarming exodus of skilled professionals. Asad Ijaz Bhatt, who returned to the U.S. after attempting to serve in Pakistan’s government, recounts his personal struggles amid rising living costs. They discuss the staggering rise in expenses impacting the middle class, the reasons behind the brain drain, and the long-term ramifications for Pakistan’s already fragile economy. The conversation underscores a nation at a critical juncture.
Rising living costs and stagnant wages in Pakistan are driving skilled professionals, like doctors and engineers, to seek better opportunities abroad.
The ongoing economic crisis, intensified by IMF conditions and increasing taxes, is exacerbating the brain drain and threatening Pakistan's long-term recovery.
Deep dives
The Personal Journey of Migration
Asad Ijaz Bhatt, once a successful management consultant in Canada, made the surprising choice to return to Pakistan, driven by a deep passion to contribute to his home country. Initially, he found fulfillment in working for the government under prominent finance ministers, viewing his role as a chance to give back. However, over time, rising living costs and stagnant wages eroded his enthusiasm, forcing him to juggle multiple jobs just to make ends meet. Ultimately, after experiencing mounting financial pressures, Asad decided to seek opportunities abroad again, receiving a scholarship for a PhD in the United States and reflecting a broader trend of migration among educated Pakistanis.
Economic Challenges and Mass Exodus
Pakistan is experiencing a significant brain drain as economic instability drives skilled workers to seek opportunities elsewhere. The country recorded alarming figures, with over 800,000 people emigrating in 2022, driven by soaring inflation and an increasingly difficult cost of living. As inflation reached a record high of 38%, the burden of everyday expenses, notably electricity bills, became unsustainable for many households. This environment of financial despair, compounded by currency devaluation and soaring taxes, has pushed educated professionals to leave the country in search of better conditions.
Consequences of Financial Policies
Pakistan's financial crisis has been further exacerbated by substantial loan repayments and stringent conditions imposed by the International Monetary Fund. Recent tax increases, intended to stabilize the economy, have frustrated many, particularly as the government has struggled to maintain the talent pool necessary for recovery. As higher earners assume a heavier tax burden without commensurate benefits or infrastructure, the perception of unfairness has intensified. The ongoing outflow of skilled workers threatens not only Pakistan's economic recovery but also its capacity to uplift its economy in the long run.
A record number of Pakistanis are leaving at a rapid speed. Among them are some of the country’s top talent including doctors, engineers, accountants and managers. Over the last three years, one million skilled workers like them have left Pakistan.
On today’s Big Take Asia Podcast, host Rebecca Choong Wilkins talks to Bloomberg’s Pakistan Bureau Chief Faseeh Mangi about what’s behind the severe brain drain in one of the world’s most populous nations, where the immigrants are going, and what it means for the country’s already fragile economy that depends on loans from the International Monetary Fund.