The dollars come home. Pakistan’s future leaves.

Every new remittance record is celebrated as proof of Pakistan’s resilience. It should instead make us uneasy. Pakistan received a record USD 41.6 billion in workers’ remittances in FY2025–26, up 8.6 percent from the previous year, according to the State Bank of Pakistan.

The dollars are real and essential to many households. But the migration model that generates them separates families, depletes firms and hospitals, exports entrepreneurial capacity, feeds import-heavy consumption and relieves the state of pressure to build a productive economy. The inflow is counted immediately; the human and economic losses embedded in the model are not.

The policy direction is unmistakable. In 2025, 762,499 Pakistanis registered for overseas employment, according to the Pakistan Economic Survey. The survey also cites a proposed Saudi Arabia-oriented skills pipeline and a target of 1.51 million annual overseas deployments by 2039. Registrations are not departures, and targets are not outcomes.

Even so, these ambitions reveal what the state is planning for: not an economy that raises the value of Pakistani skills at home, but one that trains more citizens to leave. The consequences do not begin in the foreign-exchange account. They begin in the households whose separation makes the remittance possible.

The cost begins at home

The first bill arrives at home. Migration turns many two-parent households into long-distance arrangements of money, care and authority. The spouse who remains becomes parent, financial manager, caregiver and first responder, while children know the absent parent through calls, gifts and instructions.

Elderly parents receive transfers but not companionship. Affection may survive, yet one adult bears the household’s daily burdens and the other the pressure to keep earning. No balance-of-payments table records the missed childhood or unattended illness.

Pakistani research shows why higher household income cannot be treated as a complete family gain. A panel study of 820 rural Punjab households found that remittances improved children’s material prospects, but a father’s absence also produced adverse effects. Girls in the sample faced a higher risk of additional child labour, suggesting that care and household work can shift to daughters.

A qualitative study in Bajaur similarly found better access to health and education alongside children missing paternal protection and women reporting isolation and emotional strain. School fees, food and housing matter. They do not replace daily parenting, shared responsibility or emotional security.

Migrants pay too. In 30 in-depth interviews with Pakistani fathers who had lived in Italy for at least five years, researchers heard recurring accounts of helplessness during illness and family crises, distress at missing birthdays, marriages and religious festivals, and fear that bonds with children were weakening.

Audio and video calls enabled what the study calls “digital caregiving.” But a screen cannot take a sick child to a clinic, mediate a household conflict or reproduce the ordinary routines through which closeness is built. Communication can soften separation; it cannot substitute for presence. Nor does the loss stop at the front door: the same departure that removes a parent from daily family life also removes skill, experience and enterprise from the economy.

What leaves with the worker

The next loss is the business never started. We cannot know how many migrants would otherwise have founded firms or become managers in Pakistan, but the mechanism is credible. Research on Italy links heavier emigration to fewer firms and innovative start-ups.

Pakistan-focused research finds that remittances can finance self-employment at home, yet such ventures remain constrained by finance, regulation, infrastructure and management. A transfer may fund a shop; it does not replace the founder, engineer or technician capable of building a larger enterprise. Why do so many capable Pakistanis conclude that building at home is not worth the risk?

One answer is the punishing cost of doing business. Electricity and backup power consume capital before the first sale; federal, provincial and municipal approvals multiply; and tax administration is too often unpredictable. PIDE calls Pakistan a “permission economy,” while its study of Lahore restaurants found repeated departmental visits, long delays and costs far beyond official fees.

The World Bank’s 2025 B-READY assessment also identifies weaknesses in taxation, dispute resolution and public-service delivery. When the state acts as gatekeeper—and businesses experience FBR notices, audits and enforcement as coercive or uneven—leaving can look like self-preservation.

Commercial hostility is reinforced by institutional breakdown. Entrepreneurs investing for years need impartial courts, stable rules and freedom to question policy. The World Justice Project ranked Pakistan 130th out of 143 in its 2025 Rule of Law Index, reporting deterioration in judicial independence, constraints on government power, civil justice and civic freedoms.

The Human Rights Commission of Pakistan similarly documented eroding judicial independence and shrinking civic space. Political turnover is not the problem; arbitrary power is. Selective accountability, delayed justice, abrupt policy shifts and suppression make capital cautious and talent mobile. Emigration becomes a vote of no confidence in institutions unable to protect rights, settle disputes or tolerate scrutiny.

The consequence is visible inside firms. The departure of an experienced supervisor costs more than one vacancy: it takes away knowledge of machinery, workers, suppliers, quality control and deadlines. Pakistan can simultaneously have 5.9 million unemployed people and shortages in particular occupations because aggregate unemployment says little about location, training, experience or occupational fit.

Migration does not cause every shortage, but the combination of commercial hostility and institutional uncertainty pushes out precisely the people productive firms struggle hardest to replace. Nowhere is that multiplier effect clearer—or more consequential for ordinary citizens—than in healthcare.

A health system hollowed out

Healthcare makes the cost visible. When doctors, nurses, pharmacists and laboratory technologists leave, Pakistan loses publicly and privately financed education, clinical experience and training capacity.

Official ratios can look adequate while hospitals remain understaffed because registration does not equal active practice and national totals conceal shortages by specialty and district.

A hospital may have sanctioned posts but too few nurses; a district may have a doctor but no anesthetist, radiologist, midwife or laboratory specialist. When a senior clinician or technician departs, the institution also loses a supervisor and mentor; in a remote district, one departure can eliminate an entire service.

Migration is not the only cause. Poor pay, unsafe conditions, weak management, scarce postgraduate positions and urban bias also drive attrition. But expanding medical colleges and celebrating overseas placements without a workforce plan is indefensible.

Pakistan needs reliable data on active practice, vacancies and specialty shortages; better pay, security and career paths in underserved areas; stronger nursing and allied-health training; and ethical recruitment agreements requiring destination countries to support training where their hiring worsens shortages. Yet the loss of people is only half the model.

The other half is what happens to the money they send home—and whether it replaces the productive capacity that left.

Relief without transformation

Too often, it does not. Families are entitled to spend their earnings as they choose, and housing is a legitimate need. But where serviced land is scarce, additional purchasing power raises prices as well as construction, enriching existing owners and making housing less affordable for everyone else.

PIDE research finds that remittances increase housing demand in Pakistan’s major cities. That does not prove they alone cause land-price inflation. It does show how savings can be pulled towards plots and property rather than technology, tradable production and scalable firms.

Consumption creates a similar illusion. When domestic suppliers cannot compete, remittance-financed demand spills into imports rather than local production. Imported machinery can expand capacity; consumer goods generally do not.

The World Bank identifies reliance on debt, remittances and consumption as part of Pakistan’s recurring macroeconomic pattern. The inflow eases today’s foreign-exchange constraint while reproducing the weak exports and low productivity that make tomorrow’s inflow necessary.

Large inflows can also appreciate the real exchange rate and weaken exports—the Dutch-disease risk.

Pakistan-specific research reports modest appreciation and weaker exports after remittance increases. Remittances did not cause deindustrialisation alone; energy costs, tariffs, logistics, regulation and low productivity matter greatly. But they finance imports and dull the urgency of reform.

The World Bank reports that exports fell from roughly 16 percent of GDP in the 1990s to about 10 percent in 2024. Remittance dependence does more than cushion Pakistan’s productive weakness. It helps the country live with it. Escaping that trap requires a different measure of success.

A different measure of success

None of this justifies restricting the right to migrate. Pakistanis are rational to seek safety, dignity and opportunity where they can find them, and remittances reduce hardship, finance education and healthcare, and provide foreign exchange when Pakistan needs it. That is precisely why the model endures. But emergency relief is not development. What is rational for one household can still be damaging when elevated into a national strategy.

The proper target of criticism is a policy establishment that celebrates deployment numbers and remittance records while failing to create reasons for skilled citizens to stay.

The state must measure more than dollars received and workers deployed. It must track family wellbeing, occupational shortages, business formation, housing affordability, exports and the professionals actively serving in Pakistan.

More importantly, it must raise the return to building at home. That requires lower energy and logistics costs; clear, time-bound approvals; predictable tax administration; independent courts and faster commercial justice; political stability without suppression; stronger technical and health training; retention of critical professionals; and credible routes for returnees to invest their skills and savings.

Remittances are praised because the benefit arrives in dollars while the costs arrive as absences: a parent missing from the dinner table, a mentor from a hospital, a founder from a firm, productive capacity from an economy. The dollars are useful. The model is not.

Pakistan should honour its migrants without building its future around their departure. Migration must not be the country’s development strategy.

Copyright Business Recorder, 2026