Economic cost of deporting Afghans

The widespread departure of illegal aliens, spurred by the caretaker government’s abrupt decision to crack down and deport individuals lacking valid documents in Pakistan, has the potential to leave lasting impressions not only on the country’s political landscape but also on its domestic economy.

Official circles and some economists downplay the potential adverse impact on Pakistan’s economy from the exodus of illegal immigrants. However, many business leaders in the smaller provinces, fearing a dangerous ethnic dimension, are concerned that the decision could further contract the already fragile economies of Balochistan and Khyber Pakhtunkhwa as a vital source of cheap labour begins to dwindle.

Shortly after assuming office in August 2023, the Caretaker Prime Minister Anwaarul Haq Kakar government urged illegal immigrants to voluntarily depart from Pakistan by the end of October, with the deportation drive set to commence in November. This decision, ostensibly driven by security concerns, is reportedly linked to broader counter-terrorism actions.

“The repercussions of this policy are expected to be concentrated in KP and Balochistan, housing three-fourths of the 1.7 million unregistered immigrant population. Predominantly Afghans (99 per cent), these individuals are recognised for their involvement in tending to fruit orchards, working in coal and marble mines, and facilitating cross-border goods trade in KP and Balochistan. In Punjab and Sindh, illegal aliens serve as a source of inexpensive manual labour in public works and construction industry,” noted an independent observer.

Since many of their efforts are invisible, such as picking trash and making tea, they hold little value for the authorities

The government’s decision faced opposition, with a group of politicians and rights activists filing a petition in the Supreme Court. International bodies, including the Amnesty International and United Nations Commissioner for the Rights of Refugees, also criticised, urging Pakistan to reconsider and reverse the decision.

While the country’s elite business circles largely remained silent, certain Pashtoon and Baloch business leaders voiced profound concerns, fearing the decision could worsen challenges for the already fragile provinces. They also expressed resentment at being excluded from decision-making forums on this matter.

Lacking pertinent data or a comprehensive study on the subject, drawing definitive conclusions is difficult. However, an informal survey based on brief interviews suggests a potential impact on the domestic market that may be more significant than officials are willing to acknowledge.

Caretaker Foreign Minister Jalil Abbas Jilani expressed confidence in the government’s handling of the issue of illegal immigrants in Pakistan. According to a 2023 report of the United Nations High Commissioner for Refugees, 99pc of the refugee population in Pakistan is Afghan, with approximately one-fourth, 700,000 out of 3.7m Afghans having crossed into Pakistan following the Taliban takeover of Kabul in 2022.

Foreign Minister Jilani asserted, “the progress in implementing the policy to extern illegal immigrants from the country is deemed satisfactory. Foreigners possessing valid documents need not worry. The policy specifically targets undocumented illegal aliens who evade our legal system. Their undocumented status denies them both the legal rights and responsibilities enjoyed by registered Afghans.

“In an effort to alleviate the challenges faced by this group, the government has outlined a designated timeframe, during which unregistered foreign nationals were facilitated in returning to their country of origin.

‘The undocumented illegal Afghans were making no contribution to economic activity and thus their departure will have no impact on the economy,’ Caretaker Foreign Minister Jalil Abbas Jilani

“Even after the expiration of this period, stringent directives have been issued to law enforcement agencies, emphasising the importance of showing compassion and ensuring the dignified repatriation of illegal aliens.”

Addressing a query over the phone regarding the potential economic impact of the said policy, the federal minister remarked, “The undocumented illegal Afghans were making no contribution to economic activity, and thus their departure will have no impact on the economy.”

Some experts deemed the government’s fundamental outlook flawed. “One wonders how long we will continue to view the world through security blinkers, impairing our vision. All the lofty rhetoric prioritising the economy amounts to nothing when key policy decisions are made without due consideration of the economic repercussions,” noted an analyst.

A top economist did not foresee a lasting economic impact but expressed dissatisfaction with the government’s handling of the illegal immigrant issue.

Dr Dur e Nayab, Joint Director, Pakistan Institute of Development Economics (PIDE), echoed this sentiment. When approached she stated, “Economically, I don’t anticipate a significant impact on any sector of Pakistan’s economy, as locals with similar skill sets can fill the void. It’s the socio-political consequence that worries me.”

Badruddin Kakar, Senior Vice President, Quetta Chamber of Commerce and Industry, expressed disillusionment with the government’s immigration policy and its harsh implementation, which instilled fear in Afghans in Pakistan. Speaking over the phone from Quetta, he stated, “We know of instances where law enforcement agencies overstepped their mandate and harassed poor Afghans. In Balochistan, reports suggest early signs of a shortage of miners and skilled farm workers tending orchards. Policymakers in Islamabad seem to be cut off from the reality of the restive province.

“It would be wrong to consider all Afghans similar. Like any community, there are horizontal and vertical divisions among Afghans. The burden of the current policy will be borne disproportionately by poor Afghans. The rich ones can buy their way around any policy.”

Ajmal Kakar, a PIDE researcher with expertise on the subject, argued that Afghans’ contribution remains invisible as they operate in the informal economy, beyond the government’s radar. He emphasised, “Just because the contribution is hard to quantify, it would be unfair to assume that it doesn’t exist. Even roles such as rag pickers, private guards, small-scale chai wallas and roti makers serve a purpose and cannot be summarily dismissed as worthless.”

High-level sources in the economic hierarchy confirmed their exclusion from the decision-making process when the government decided on immigrants.

Published in Dawn, The Business and Finance Weekly, November 13th, 2023