BRAIN CIRCULATION OR REMITTANCE DEPENDENCY: EVALUATING PAKISTAN’S DIASPORA DEVELOPMENT MODEL

Abstract

The concept of a development model of the Pakistan diaspora is built on a basic dichotomy. The state sees overseas employment as a development strategy, remittances as a macroeconomic success and has introduced financial instruments, especially the Roshan Digital Account (RDA) to harness diaspora money. However, the structural conditions for making this financial commitment a brain circulation multi-directional flow of skills, knowledge and investments that can produce development benefits for the origin country are missing. Brain circulation demands institutional quality and governance trust and knowledge transferring infrastructure. The model in Pakistan has focused more on the financial aspect than the institutional aspects which would make the engagement of the diaspora knowledge rational, sustainable, and productive. This study appraises Pakistan's diaspora development model based on the brain circulation model (Tung, 2008; Ince, 2020; Gaillard, Gaillard, & Krishna, 2015; Seguin, State, Singer, & Daar, 2006) and remittance dependency criticism (Robertson, 2006; Murru, 2009; Muhammad, 2021; Salik, 2020) by using only data from the Pakistan Migration Reports 2020 and 2024 (Shah, Amjad, Hameed, & Shahzad, 2020; Shah, Shahzad, Quddus, & Qazi, 2024) and the theoretical literature from the three uploaded references. This analysis reveals that Pakistan's model is closer to remittance dependency than to brain circulation, as it is able to extract financial capital from the remittances but lacks the institutional support to collect knowledge capital, bring people back or maintain investment from the remittances when the governance conditions get tough. The RDA's performance is a case in point, USD 883 million worth of diaspora investment that dropped from positive in FY2020-21 to negative USD 488 million in FY2022-23, it is not brain circulation when it comes to financial engagement. It is a governance sensitive financial transaction which turns on and off according to the quality of institutions and not strength of diaspora ties. It outlines four structural shortcomings of the diaspora model in Pakistan and introduces a framework for reform in the light of the literature on brain circulation