Diaspora (Commonwealth Union) _ Despite the Pakistani diaspora’s significant contribution to the economy through remittances, which exceeded exports in 2023, their investments have largely been limited to real estate rather than productive industries. In contrast, countries like India and Bangladesh have successfully channelled their diaspora’s wealth into industrial sectors, fuelling exports and economic growth.
Pakistan‘s diaspora, consisting of around nine million people, sent remittances worth $29.9 billion in 2023, surpassing exports of $27.7 billion. However, only about 15-20% of this diaspora has invested in productive industries, with the majority focussing on real estate and small enterprises. Meanwhile, the Indian diaspora, with 32 million people, contributed $111 billion in remittances—just 25% of their $447 billion in exports—while 20–30% have invested in key sectors such as IT, pharmaceuticals, and textiles. Similarly, Bangladesh’s diaspora, while smaller, has made notable contributions to the textile and garment industries.
To encourage more industrial investments from its diaspora, Pakistan must adopt several strategic measures. Establishing dedicated investment platforms, such as a diaspora investment fund or Pakistan diaspora bonds, would provide secure channels for investment. Offering tax breaks, subsidies, and preferential treatment in special economic zones (SEZs) could further incentivise investments in emerging sectors like technology, renewable energy, and manufacturing.
Joint ventures between local businesses and the diaspora should also be promoted, as these partnerships can reduce perceived risks and foster trust. Addressing political instability, bureaucratic hurdles, and ensuring better governance are crucial steps in creating an environment conducive to investment.
Additionally, the government must focus on strengthening infrastructure in SEZs and export processing zones (EPZs), enhancing e-commerce and logistics capabilities, and providing investment insurance to mitigate risks. Developing online platforms for remote investments and co-investment opportunities in sectors like IT and logistics could further enhance connectivity between the diaspora and the local economy. By offering incentives for high-tech industry investments and encouraging the transfer of knowledge from diaspora members working in advanced sectors, Pakistan can unlock the untapped potential of its diaspora for long-term industrial growth.
