The recently announced incentives package for overseas Pakistanis by Prime Minister Shehbaz Sharif, though wrapped in patriotism and gratitude, represents a deeper malaise within Pakistan’s economic policy—a chronic case of the Dutch disease, albeit without the natural resource windfall. Instead of natural resources, Pakistan’s economy has become increasingly reliant on remittances from its overseas workers to stay afloat, resulting in structural distortions that are now more apparent than ever.
The generous package includes tax relaxations, quotas in medical colleges, green channel facilities at airports, and even special courts to address expat concerns. While these measures may superficially boost morale among the diaspora and acknowledge their critical financial contributions, they fail to address the long-term developmental needs of the country. Worse, they reinforce consumption-oriented behaviours and incentivize unproductive investment—especially in real estate, which is already plagued by speculative bubbles and developer mafias.
Real economic revival demands channeling remittances into productive sectors like manufacturing and agriculture. Yet, the government seems more focused on appeasing expats with perks rather than fostering conditions for sustainable investment. The Overseas Pakistanis Convention, despite drawing over 1,200 participants, showed little evidence of any serious interest in industrial or agrarian investments. The absence of dialogue around innovation, production, or value-added exports underlines the policy failure at hand.
Remittances have indeed helped bridge the external account deficit and supported import financing during crises. However, they have also contributed to a consumption-driven economy, urban sprawl, currency volatility, and a growing anti-export bias. Instead of being leveraged as a growth driver, they are being used to delay necessary economic reforms.
What Pakistan needs is not a package of shortcuts, but a strategic redirection of remittances into sectors that enhance productivity and exports. Incentives should be performance-based, focused on those expats willing to invest in industries that create jobs, promote innovation, and reduce import dependency. The government must initiate serious reforms: tax simplification, reduction in cost of doing business, transparency, and policy consistency.
Pakistan’s over-reliance on remittances is making it complacent. The recent package reflects not foresight, but desperation. If real change is to come, it must be rooted in structural reform—not in placating economic contributors with benefits that merely prolong an unsustainable status quo.
