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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.
Pakistan’s Top Talent Is Leaving the Country in Record Numbers
Watch, from Bloomberg Originals:What’s Driving Pakistan’s Middle Class Brain Drain?
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Here is a lightly edited transcript of the conversation:
Rebecca Choong Wilkins: When Asad Ejaz Butt was growing up, he was ambitious.
He left his home country of Pakistan to attend college in Canada. He graduated with honors and got a job there as a management consultant.
But in 2015 – when Asad was in his mid-20s, he made a decision that surprised people close to him –
Asad Ejaz Butt: I left everything.
Choong Wilkins: He gave up his job in Canada to move back to Pakistan.
Butt: I was one of the few young Pakistanis who had a career in North America. A lot of Pakistanis found it very surprising that somebody who was settled in a country like Canada went back to work in Pakistan.
Choong Wilkins: When Asad got back to Pakistan, he got a job in the government, working under two finance ministers. It was considered a well-paid and prestigious job inside Pakistan and Asad was glad to be able to do something that felt like giving back.
Butt: I had a passion to do something for my country, for my people.
Choong Wilkins: But almost a decade later, that passion began to fade.
The prices of things Asad needed to live every day were rising – and he started to feel like his salary wasn't keeping up.
Butt: My wife was earning in Pakistan, I was earning in Pakistan. But yet I think over time, both of us, our salaries two lumped together could not afford the higher rental prices, the high fuel prices.
Choong Wilkins: Asad took on more work – one side gig after another –
Butt: I had to do three jobs at one point. I started feeling that my health was badly affected because on a lot of these days I was working more than 15 hours a day and perhaps more than 80 hours a week.
Choong Wilkins: BUT, Asad still didn't feel like it was enough to keep up with his expenses and he was starting to feel like he needed to make a bigger change –
Butt:. You know this feeling kept growing that I had to put bread on my table, I was entering my thirties, I got married also. I had more responsibilities, and I had to take the tough decision very painstakingly to come back to the life I was living before 2015.
Choong Wilkins: Asad decided to look for opportunities outside of Pakistan – he applied for scholarships to get a PhD and he got one in the US. He moved to Boston in 2023.
Asad is just one of a growing number of Pakistanis who feel like life is getting harder and harder inside the country.
Faseeh Mangi: Prices and taxes are going up in Pakistan and people feel more trapped. Everyone is much more poorer.
Choong Wilkins: That’s Bloomberg’s Pakistan bureau chief Faseeh Mangi, who’s based in Karachi.
Mangi: Last year, Pakistan recorded the highest outflow in seven years. This is according to recent data from the United Nations. The exodus was most pronounced among skilled and educated. In 2023, the number of doctors, engineers, accountants, and managers who left Pakistan doubled to 60,000. That makes Pakistan one of the top 10 countries for emigration.
Choong Wilkins: Welcome to the Big Take Asia from Bloomberg News. I’m Rebecca Choong Wilkins.
Every week, we take you inside some of the world's biggest and most powerful economies, and the markets, tycoons and businesses that drive this ever-shifting region.
Today on the show – one of the world's most populous nations… is facing a severe brain drain – why are so many educated workers leaving… and where are they going? And what does this mean for Pakistan’s already fragile economy?
Migration from Pakistan is not a new phenomenon, but Bloomberg’s Faseeh Mangi told us that in 2022, things started to get really bad -more than 800,000 people left Pakistan that year.
Mangi: So it started about two years ago. Pakistan has been going through its biggest economic storm in its history in the past two, three years. A lot of people lost a lot of hope. It became tougher to make ends meet. So people started looking outside of Pakistan.
Choong Wilkins: One item that many households are struggling to afford is electricity. Faseeh says that for some people, their electricity bill is almost as high as their rent.
Let’s just pause for a second and imagine that – your electricity bill being as much as your rent. And that means people can hardly save – if at all.
Mangi: Electricity bill would be the biggest component of expenses. People also go to the utility companies and be like, hey, you know, we got this bill. Can you like, cut it down into smaller installments so we can pay it over six months or nine months? People are actually getting loans from families and friends to make ends meet.
Choong Wilkins: Faseeh says there are three main drivers behind these massive price hikes for things like electricity –
The first one is the rise in global commodity prices that has impacted everyone everywhere.But on top of that, number 2 – Pakistan has seen its currency significantly devalued. It was the worst performing currency in Asia last year.
The Pakistani rupee has lost almost half of its value in recent years, and that made imported goods much more expensive.
Adding to the pain is a new tax Pakistan added last year.
Mangi: Pakistan imposed something called a luxury tax. So anything imported from overseas has gotten an extra luxury tax and I can tell you from personal experience that Doritos also falls in that category and Doritos in Karachi now cost like ginormously more than how much it costs in Dubai.
Choong Wilkins: I can't believe that Doritos are a luxury item
Mangi: I don't have the list in front of me, but stuff like, basics like, chocolates and makeup. these things were also added, a luxury tax
Choong Wilkins: All of this pushed Pakistan’s inflation rate to a record 38% last May – and it’s remained the highest in Asia since then.
And on top of paying more than ever for the things they buy, some of the country’s more educated and highly skilled workers are also now paying much more in taxes – because they are considered some of the country’s highest earners…. But Faseeh says most people in Pakistan don’t make a lot of money to begin with -
Mangi: To be among the top 20 income owners in Pakistan. You need to have a salary of 64,000 rupees, which is only $230 a month. The idea is that if someone is paying a tax equal to what they pay in London or New York, then why am I not enjoying the same infrastructure and benefits?
Choong Wilkins: With both inflation and taxes spiraling out of control, numerous protests took place across the country.
Protestor: Fuel adjustment surcharge! TV income tax! All these kind of duties!
Choong Wilkins: And people started to rush for the exit door –
Mangi: Anyone with a high degree who can move is moving. And we're seeing people move in all sorts of ways. People are going on visit visas to the Middle East or the US. Even for that matter and just hunting for jobs. Senior people in the financial industry I know one of them applied for refugee status in the US.
Choong Wilkins: This kind of brain drain is bad for any country – but it's especially troubling in Pakistan because it has already been struggling financially.
Pakistan just recently made a $7 billion bailout deal with the International Monetary Fund and it needs its highly educated and skilled workers to help pull the country back out of its debt crisis.
So what can Pakistan do to stop this exodus of talent – and with its top earners gone, will Pakistan be able to avoid bankruptcy?
That’s after the break.
Choong Wilkins: Record numbers of Pakistanis – including some of the highest earners in the country – are leaving for other places. And Bloomberg’s Faseeh Mangi says the reason they’re leaving has a lot to do with the state of Pakistan’s economy right now, and where they see it going in the future.
Mangi: Pakistan's economic growth on an average of trailing three years is the lowest ever in its history right now. Analysts and economists are not predicting Pakistan's economic growth to go up anytime soon.
Choong Wilkins: On top of this slowing growth, the country is also dealing with massive debt. Pakistan faces about 26 billion US dollars in loan repayments to partners like China, Saudi Arabia and the UAE.
And it’s also gotten huge loans from the IMF to help the country avoid a default.
Mangi: So the IMF is the lender of last resort. Pakistan is one of the most frequent customers for the IMF. The IMF classifies Pakistan's debt situation as borderline sustainable, so it's walking on a fine rope. Earlier this year or just a month or so ago, IMF approved a new 7 billion bailout. This was the 25th program in Pakistan's history. And just to give some context as well, so Pakistan ended another program from the IMF earlier this year. And Pakistan has been going from one IMF program to the other.
Choong Wilkins: And while this latest IMF program may be giving a lifeline to Pakistan – it is also a major driving force for the country's substantial tax increases. The same tax increases that working people in Pakistan are so upset about – In order to meet the conditions set by the IMF for the deal, Pakistan recently raised the total tax revenue target by 40%, the highest on record.
This has created a challenge for the country’s leaders who recognize the need to collect more revenue but also fear that increased taxes will lead to more skilled and educated workers leaving the country.
Ali Pervaiz Malik, the state minister for finance and revenue, said talent leaving “is something that we must be cognizant of.” Here’s Bloomberg’s Faseeh Mangi again -
Mangi: They're aware of the fact that the taxes are high. They say whenever they can give a relief to the income tax sector, they will give a relief, but it's going to be a rough ride for the next few years. It's going to be difficult. Economists say it's going to be difficult for the government to give that relief.
Choong Wilkins: Faseeh, what happens if the government fails to stop more Pakistanis from leaving the country then?
Mangi: We're going to have a talent issue in Pakistan. A lot of companies are not finding the same quality of people to replace the people who are leaving. So it's creating a massive hole of talent.
Choong Wilkins: So where does Pakistan go from here? Will Pakistan be able to navigate itself out of this economic crunch? Will the 7 billion IMF bailout be its last?
Faseeh says there’s no clear path forward.
Mangi: One thing to note is that the IMF program is a stabilizer. It's not a booster for your economy. It doesn't solve the problems, the base problems of the economy. It can tell you what needs to be done. It can lay it out. In Pakistan, everyone says everyone knows what the problem is. It's about getting the job done. And unfortunately, we haven't been able to do the job for a long time. We're seeing a very serious effort this time. Whether we will be able to do it or not, that is a question that remains, and we'll just need to wait and see what happens.
Choong Wilkins: And as for Asad – who we heard from in the beginning of the episode who left Pakistan to pursue a life in the US – he says even though he’s chosen to leave his home country, for now, he still holds out hope that he could one day return.
Butt: I think that option never goes out of the window and it will always stay on the cards. It's my country. I love it. And it's a sad situation, but I guess when I decided to jump the boat, I thought about all these things, but constantly your passion for the country, your passion for meaningful change is constantly pitted against economic responsibility. And at the end of the day, you have to put your weight behind economic responsibility more than pure passions or emotionality for your country.
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