Pakistan Woos Diaspora for Economic Boost, Global Influence

Amid a dire financial crisis, Pakistani policymakers have been seeking ways to attract foreign direct investment to boost the economy. They have been debating ideas to lure investments in the minerals sector, increase exports, and implement other sectoral reforms – but  when it comes to injecting billions into the economy, nothing seems to deliver faster results for Pakistan than the diaspora’s contributions.

Overseas Pakistanis are the country’s unsung heroes, sending billions in remittances and contributing massively to development back home without gaining any incentives from their home country.

It is fair to argue that the country’s economy has survived on the back of remittances sent by Pakistanis working worldwide. Over the last five decades, remittances sent by overseas Pakistanis surged from $140 million in 1970 to $34.1 billion in 2024. The State Bank of Pakistan (SBP) revealed recently that remittances sent during March 2025 stood at $4.1 billion, breaking all previous monthly records. Seeing the latest trends, the central bank has revised its valuations for 2025, and now anticipates $38 billion in remittances, which is $2 billion higher than previously projected.

According to official data, the share of overseas remittances as a proportion of the country’s overall gross domestic product (GDP) increased from 2 percent in 1970 to 10 percent in 2024. Moreover, these funds have contributed significantly to poverty alleviation in Pakistan. According to some estimates, Pakistani workers’ remittances have so far lifted 5 to 7 million Pakistanis out of poverty, improving the living standards of recipient households.

These funds are strengthening the country’s foreign exchange reserves at a time when direct investment from bilateral and multilateral lenders has declined. For instance, there are enough dollars in the Pakistani interbank and open market for the country’s state bank to purchase to stabilize the country’s foreign exchange reserves. In 2024, the SBP purchased over $9 billion from the local market. In the first four months of the current fiscal year, the central bank has purchased about $3.8 billion from commercial banks to repay international debt and boost reserves. There is nothing unusual about a country’s central bank buying dollars from the local market, but the scale on which Pakistan’s central bank has been making these procurements is remarkable.

These dollars are available in abundance due to the ongoing crackdown in Pakistan on the unofficial buying or selling of dollars. Pakistan’s central bank has been trying to ensure that workers’ remittances come through formal banking channels and are accounted for.

It appears the Pakistani government recognizes the need to strengthen engagement, build deeper trust, and bridge existing gaps with its over 10 million overseas citizens to encourage more direct investment in their homeland.

An Overseas Pakistanis Convention organized by the government in Islamabad in April attracted over 1,200 delegates from around the world. The participants, invited by Pakistan’s missions abroad, were welcomed as “state guests” by the government. The country rolled out the red carpet, showered them with praise, and promised them incentives for their contributions to the country’s development.

Addressing the overseas convention, Prime Minister Shehbaz Sharif announced a comprehensive welfare package for overseas Pakistanis that included education and employment job quotas, civil awards, skill development opportunities, and the formation of special courts in all provinces for the swift resolution of legal cases filed by expatriates.

To get them to invest more in their home country, the premier went as far as saying that he would personally oversee the investments of overseas Pakistanis in Pakistan. “I will be your CEO. My Cabinet and our business community will ensure that your investments are protected and facilitated,” Sharif asserted.

Separately, Pakistan’s army chief, General Asim Munir, delivered an emotionally charged speech, telling expats that they belonged to a great country. “You should always hold your head high because you do not belong to any ordinary country; rather, you are the representatives of a great and powerful country,” Munir said.

Moreover, the army chief tried to address overseas concerns regarding Pakistan’s security and development, saying that a handful of terrorists cannot decide the fate of Pakistan. “We will beat the hell out of these terrorists very soon,” he assured the Pakistani diaspora.

Munir also criticized those who call Pakistan’s migrants an example of brain drain, saying that if the diaspora reflected Pakistan’s brain drain, then the government would like it to continue indefinitely. “Those who talk about brain drain should understand that this is not a brain drain, but rather a brain gain,” he said.

A record 3.2 million Pakistanis have left the country over the past five years to find job opportunities abroad, according to data from the Ministry of Overseas Pakistanis. Critics say that these people include professionals and skilled workers who migrated due to the unavailability of good work opportunities in Pakistan.

Another reason for the passionate speeches by the prime minister and the army chief has to do with the growing perception that overseas Pakistanis do not support the current civil-military regime, as they see it as the reason behind the fall of former Prime Minister Imran Khan.

Khan’s party, the Pakistan Tehreek-e-Insaf (PTI), has been lobbying in Western capitals, particularly the United States, to convince overseas Pakistanis to put financial pressure on Islamabad. The PTI has on several occasions asked overseas Pakistanis to stop sending remittances back home to punish the current government and win concessions for their jailed leader.

However, this has not worked as remittances continue to rise, surpassing all previous records. The reason is that a majority of remittances sent by overseas Pakistanis, particularly those working in the Gulf region, are meant to support vulnerable families back home.

“The nature of Pakistani remittances is inelastic to political narratives, as they are driven by household consumption needs,” according to Sajid Amin Javed, a senior economist at the Sustainable Development Policy Institute (SDPI) in Islamabad.

That said, the Pakistani government may still want to woo Pakistani workers to weaken the PTI’s lobbying efforts and win over a credible source of investment that has lately emerged as a lifeline for Pakistan’s economy.

However, for the government to succeed in transforming overseas Pakistanis’ role from mere remittance senders to major investors, the state must implement concrete reforms.

This can only happen once the state can prove to its diaspora that their capital is safe in Pakistan and governance is corruption-free. Efforts to engage and build trust with expats are a good first step. However, the government must do far more to turn overseas Pakistanis into the country’s prime investors.