Shamsher Ali Rao
FOR half a century, Pakistan’s economic debate has circled the same two prescriptions: com-press imports or expand exports. Both have failed to deliver and both will continue to fail — not because the intent is wrong, but because the arithmetic and the timelines are. If Pakistan genuinely wants to move from a chronic current account deficit to a sustainable surplus, the answer lies in two channels it already possesses but has never fully harnessed: foreign re-mittances and IT exports.
Consider first why the conventional wisdom falls short. Reducing imports is not a solution; it is an anaesthetic. Pakistan’s import bill is dominated by energy, industrial raw material and machinery — the very inputs that keep factories running and exports moving. Every time Is-lamabad slams the brakes on imports, growth stalls, tax revenues shrink and the deficit re-appears the moment the economy breathes again. Import compression buys quarters, not decades.
Expanding traditional exports, meanwhile, is the right idea on the wrong clock. Textiles, rice and leather compete in brutally thin-margin global markets against Bangladesh, Vietnam and India — countries that spent thirty years building infrastructure, trade agreements and indus-trial ecosystems. Pakistan can and should pursue this path, but it is a fifteen-to-twenty-year project requiring energy reform, port efficiency and policy continuity that no government has yet sustained. A country facing annual external financing gaps cannot wait a generation.
Remittances and IT exports operate on an entirely different clock — and an entirely different logic. Both are exports of human capital rather than physical goods. They require no con-tainers, no letters of credit, no energy subsidies and crucially, almost no imported inputs. A dollar earned by a Pakistani engineer in Dubai or a software developer in Lahore is nearly a full dollar of net foreign exchange. Compare that with textiles, where imported cotton, dyes and machinery claw back a substantial share of every export dollar.
The numbers make the case. Remittances already exceed thirty billion dollars annually — more than all merchandise exports combined. Yet this figure understates the true potential. Meaningful sums still flow through informal channels, drawn away by exchange rate distor-tions. Close that gap through competitive, market-based rates and diaspora-friendly banking and formal inflows could rise dramatically within two to three years. Add structured diaspora investment products — bonds, real estate funds, equity vehicles designed for overseas Pakistanis in the Gulf, the UK and North America — and remittances evolve from consump-tion support into investment capital.
IT exports are the second engine and the faster-growing one. Pakistan produces tens of thousands of technology graduates each year and its freelancers already rank among the world’s largest communities. Official IT exports have crossed three billion dollars, but the sector’s real earnings are meaningfully higher, held offshore by fear of currency instability and payment friction. Fix the plumbing — full retention accounts, PayPal-equivalent payment rails, tax certainty for a decade — and IT exports could realistically triple within five years. No other sector in Pakistan can promise that trajectory, because no other sector scales without physical infrastructure.
The roadmap, then, is refreshingly simple: treat the diaspora and the developer as Pakistan’s strategic exports. Reward formal remittance channels relentlessly. Give the technology sector policy stability it can bank on. The surplus Pakistan seeks will not arrive by importing less or by waiting for factories that take decades to build. It will arrive by wire transfer.
—The writer is the Member Board of Governors in Overseas Pakistani Foundation.
