Pakistan seeks to offset Mideast labor market losses

Countries such as Saudi Arabia have been major labor export markets for Pakistan since the oil-fueled construction boom of the 1970s. (Reuters)
Updated 27 November 2018

Pakistan seeks to offset Mideast labor market losses

KARACHI: Not everyone who visits Jannat Hussain Awan’s shop is buying hardware. Some are here for the banter and to listen to stories of his 36 years spent living in Saudi Arabia.

The 62-year-old runs his business in Khaigala, a remote area of Azad Jammu and Kashmir. He is one of tens of thousands of recent returnees from the Gulf states, where localization policies and an economic slowdown has encouraged many long-term expatriates to return home.

“Two years ago I came back sensing that the time is up for foreigners like us,” he said, referring to the ongoing localization of the labor market. 

Efforts by Gulf economies to reduce their reliance on foreign labor and provide more jobs for their own citizens has led to the return of large numbers of workers to West Asia — creating a challenge for governments from Islamabad to Dhaka.

Countries such as Saudi Arabia, the UAE and Oman have been major labor export markets for Pakistan since the 1970s, when a region-wide oil-fueled construction boom created massive demand for overseas labor.

In Saudi Arabia, the Pakistan workforce peaked in 2015 at 522,750 but had declined to just 143,363 two years later. Between 1970 and 2018, the Kingdom attracted more than 5 million Pakistanis who sent home $63.5 billion in remittances, according to data from the Bureau of Emigration & Overseas Employment (BEOE) and the State Bank of Pakistan SBP.

Many made their fortune there. “What I am today is because of Saudi Arabia and the time I spent there,” said Awan. “I considered the journey both economically and spiritually rewarding, due to Makkah and Madinah,” he added.

But the transition home has not been easy for many and has created a double challenge for the government — the loss of remittance revenue as well as the additional welfare burden.

“I am looking for a suitable job but am unable to find any,” said Asghar Javed Mir, 66, an electrical engineer, who spent 39 years in Saudi Arabia. 

He used to test electrical faults on the network using a purpose-built van in Saudi Arabia, but there is no equivalent work where he now lives.

“When I first went to Saudi Arabia there was only one Saudi national in the company. When I left there were only three foreigners and all the rest were the locals,” Mir said.

The number of Pakistanis working in the UAE has also fallen dramatically over the past two years. In 2014 Pakistan supplied 350,522 workers to UAE according to official data. That had fallen to 170,062 last month.

Muhammad Anser, a 36-year-old driver from Sharjah, told Arab News: “Every day two to three people are sent to their home countries.”

During the last fiscal year, Pakistan received $19.6 billion in remittances, higher than the previous year but the share of Middle East and GCC region, except UAE, witnessed a decline even as inflows from other sources increased.

“The increase in the share of non-GCC countries in Pakistan’s remittances inflow is a good omen, as higher diversification lowers the risk of a sudden drop in these inflows,” SBP said in a recent report.

As Pakistan expects further declines in the number of citizens traveling to work in the UAE and Saudi Arabia, Islamabad is looking at how to mitigate the impact on its economy.

Zohaib Shaikh, a spokesperson for the Ministry of Overseas Pakistanis and Human Resource Development, said that Islamabad was seeking ways to boost the intake of Pakistani expatriates in a number of Gulf and Asian countries.

Tesla rival Lucid Motors wants to build factory in Saudi Arabia

Updated 20 February 2019

Tesla rival Lucid Motors wants to build factory in Saudi Arabia

  • Lucid Motors eyes production plant in Kingdom after raising more than $1bn from the Public Investment Fund
  • California-based electric-car maker hopes to sell first vehicles for more than $100,000 

LONDON: A US-based electric-vehicle company that raised more than $1 billion from Saudi Arabia wants to build a factory in the Kingdom, and says its mission to build “the best car in the world” is well underway. 

The California-based Lucid Motors is developing its first model, the Air, which it hopes to sell for more than $100,000 when it enters production in less than two years’ time. 

Financial backing from Saudi Arabia’s Public Investment Fund (PIF), announced last year, will allow Lucid to proceed with the development of the all-electric sedan, as well as fund the $240 million cost of building the first phase of its factory in the US.

Peter Rawlinson, chief technology officer at Lucid Motors — and a former engineer at rival Tesla — said the company wants to eventually build a production plant in Saudi Arabia, and sees a “long-term” partnership with the Kingdom.

“I can see a really bright future, with a tangible manufacturing facility or facilities,” Rawlinson told Arab News.

“We’d love to do that … We’re currently in a period where we are investigating all these options. 

“There is a vision that there will be some sort of production facility in the future.”

Rawlinson added that it is “early days” for such a plan, but said he sees many opportunities for electric vehicles in Saudi Arabia — not least, because of the abundant sunshine and potential for solar power.

“We are undertaking the appropriate studies, but I’m really excited about the potential of this. This partnership is huge for us; we can benefit the Kingdom of Saudi Arabia in a significant, meaningful and long-term manner,” he said. 

“One of the great assets of the Kingdom is its endless reserves of sunshine, and how that can be harvested with solar energy. We’re a battery-storage technology company; that’s a way we could contribute. We’re exploring a number of avenues along those lines.”

Lucid is positioning itself in the luxury market, and Rawlinson said its Air model is looking to compete with the likes of the Mercedes-Benz S-Class. The Lucid Air is the company’s first car, but Rawlinson said an initial public offering (IPO) could be on the cards to develop future models.

The engineer brushed off the idea of a competitive threat from Elon Musk’s Tesla, where he once worked as chief engineer for the Model S.

“We don’t see Tesla as a key, direct competitor. We see the German gasoline cars — the petrol engine cars … as our core competitive set,” he said. 

“I’ve spoken to many people … who would gladly buy an electric car but say they’re not going to give up their Mercedes-Benz to buy a Tesla because of the interior. You’ve only got to step inside a Tesla to realize it’s not true luxury.”