Renowned economist Atif Mian has said Pakistan’s policy of sending its workers abroad is built to bring home foreign currency so that the elite can “live off DHA better,” and that this thinking has to change.
The Princeton University professor made the remarks during a panel discussion at the Pakistan Conference at Harvard University, where he shared the stage with Finance Minister Muhammad Aurangzeb, former State Bank of Pakistan Governor Reza Baqir, and Nobel laureate Daron Acemoglu.
A clip of his comments, which he shared on X, is now going viral.
Remittances Are a Danger, Not a Win
Mian said Pakistan’s dependence on remittances is “particularly dangerous” from a political economy point of view. He pointed out that the country’s exports and remittances are now almost equal, while remittances are close to 10 percent of GDP.
“And we celebrate it. I have seen policy papers saying our goal is to increase remittances even further,” he said.
He argued that when a country grows properly, remittances go down as a share of the economy, not up, because people want to live in their own country rather than run away from it.
“That incentive is structural. They will send back money, and so we can live off DHA better as a result of that. That thinking has to change,” he added, drawing applause from the audience.
Elites Benefit From a Strong Rupee
Mian said this is also why Pakistan struggles to boost exports. According to him, the country keeps its exchange rate overvalued, which effectively taxes exporters, because the elite earn their money from non-tradable sectors such as land.
A strong rupee gives them more purchasing power for foreign trips and imported goods. He said Pakistan needs to change these incentives, like China did, so that the elite benefit from expanding export capacity instead.
Mian has long warned about the economy’s structural problems, earlier saying that Pakistan needs 5 percent annual growth to recover 50 years’ worth of its economy.
The country’s weak export base has also kept the trade deficit under pressure.
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