PAKISTAN: Remittances - the impact on communities

[ This report does not necessarily reflect the views of the United Nations]

LAHORE, 18 May 2005 (IRIN) - Nosheen Munir, 34, who lives in the small town of Kharian, some 160 km from the city of Lahore in eastern Pakistan, often cannot understand her own children. Her two sons and a daughter, aged between five and 10, speak fluent Norwegian, as well as Punjabi, the native tongue of their parents.

The children have Swatch watches, branded sports shoes and other symbols of affluence. In obvious contrast, their mother and paternal grandparents, with whom they live, still dress in the simple cotton clothes of poverty. She regards the refrigerator, flat-screen television set and air-conditioner in their house with a wariness akin to suspicion.

Regular remittances sent home by the children's father, Anwar, who works as an electronic repairman in Norway, have brought a change in the family's fortunes. Munir left in the late 1970s, when he was just a teenager, and today earns over US $1,300 a month - a massive sum by Pakistani standards. He sends home nearly $600 a month, supplementing a similar amount his father collects as pension after working as a government clerk for over four decades.

Kharian, a settlement of about 30,000 people and one of the most important army bases in the central Punjab, has become known as 'Little Norway' - at least one male member of virtually every third household from this area alone is working abroad, with over 60 percent of them going to Scandinavian countries, mainly Norway and Denmark.

The Norwegian government has set up programmes to ensure that Norwegian-Pakistani children can adjust adequately when they leave for Norway, as most do after their schooling.

Money from remittances has brought a demand for good schools and Kharian today hosts at least half a dozen top-flight private schools with growing attendance. Anwar's children, all Norwegian citizens, attend Bloomfield Hall, where evening classes in Norwegian are offered with the aid of the Oslo-based Lindeberg school and the embassy in Islamabad.

With the 'new' money coming in, the chief investment has been in property. The town has boomed as families abandoned homes in the surrounding villages and poured into the urban centre - house prices in Kharian are an astonishing six or seven times higher than those of Lahore or the federal capital, Islamabad.

Smart shops selling consumer goods, mobile phone companies and car dealerships have set up business along the main roads.

According to official estimates, remittances from overseas Pakistanis total around $7 billion to $8 billion each year. Of this, less than $1 billion goes through the official banking system; the rest is remitted through the unofficial but immensely efficient 'hundi' network, in which money is handed over in Copenhagen, London, Stuttgart, Dubai or any other major city, and delivered within 24 or 48 hours to the doorstep of a home virtually anywhere in Pakistan.

The network has defied all official attempts to control or clamp down on it, and people cannot be persuaded to transact through banks, because this would leave a paper trail, and also boost government reserves.

"We can't trust the banks: the government may seize our money. This way it arrives safely each month - all I have to do is answer the doorbell and initial the delivery form," said Shaista Aleem, 26, who lives in the Samnabad area of Lahore.

The money sent by her husband, Aleemuddin, from Saudi Arabia, where he runs a small general store, allows her to support her widowed mother and her parents-in-law. It also pays for her son's schooling, and instalments on a car.

Iffat Begum, Aleemuddin's mother commented, "The money has made a huge difference in our lives. Our son could never have earned even half this much had he stayed here. We now live in a house with four bedrooms; our previous home had only three tiny rooms. Without this money I could not have had cataract surgery; now I can see once more - I had been almost blind for two years."

While the impact of overseas remittances is clearly visible in a small community like Kharian, people in the bigger cities like Lahore are becoming more aware of the attraction of working abroad, where they may find greater opportunities than are available locally.

"Around 130,000 leave the country each year. However, these are only those who immigrate legally - at least double that number opt to go abroad through illegal channels and, while many are forced home, others manage to meld into the vast Pakistani populations living in Europe, the Middle East, the Far East or North America. Their earnings, even as illegal workers, exceed what they could expect at home," said a spokesman at the Ministry of Labour and Overseas Pakistanis.

"For some young men, going overseas is the only option if they wish to support their families - they simply cannot find jobs here," said Ameer Suleman, a financial consultant and former banker.

"Remittances coming in from abroad have actually increased over the past two or three years, as Pakistani communities in the West have grown more insecure after the events of 9/11. This money is central to many families, and has clearly helped change their lives," he said.

While some families have grown relatively affluent as more and more envelopes bearing cash and cheques are delivered, in other cases one family member abroad may be supporting up to 10 or 12 dependents.

"We all simply survive because of our nephew, Barkat, who is in Oman. He has seven sisters, and supports all of them, as well as us," said his aunt, Sughra, who lives in the Rehmanpura district of Lahore. Barkat's remittance of around $300 a month supports 12 relatives, including his grandparents and a mentally disabled great-aunt. His parents died several years ago.

While remittances play a huge part in sustaining communities, the growing number of men away working overseas can also bring problems.

"My children feel at home neither in Norway nor here," said Nosheen Munir, who worries about their future as she observes the acute religious and cultural confusion of many younger Pakistani-Norwegians.

The social cost of remittances from overseas can be high: wives left at home, sometimes for years, often feel increasingly isolated; children grow up with absentee fathers they rarely see.

But, for many impoverished communities it seems to be a price worth paying. The largesse offers both a better standard of living and hugely improved prospects for families in a country where both are in short supply.

See IRIN's global overview: Remittances - money makes the world go round

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