Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: When Asad Ijazbat was growing up, he was ambitious. He
Speaker 2: left his home country of Pakistan to attend college in Canada.
Speaker 2: He graduated with honors and got a job there as
Speaker 2: a management consultant. But in twenty fifteen, when Asad was
Speaker 2: in his mid twenties, he made a decision that surprised people.
Speaker 3: Close to him.
Speaker 1: I left everything.
Speaker 3: He gave up his.
Speaker 2: Job in Canada to move back to Pakistan.
Speaker 1: I was one of the few young Pakistanis who had
Speaker 1: a career in North America. A lot of Pakistanis found
Speaker 1: it very surprising that somebody who was settled in a
Speaker 1: country like Canada went back to work in Pakistan.
Speaker 2: When Asad got back to Pakistan, he got a job
Speaker 2: in the government, working under two finance ministers. It was
Speaker 2: considered a well paid and prestigious job inside Pakistan, and
Speaker 2: Asad was glad to be able to do something that
Speaker 2: felt like giving back.
Speaker 1: I had a passion to do something for my country,
Speaker 1: for my people.
Speaker 2: For almost a decade later, that passion began to fade.
Speaker 2: The prices of things Assad needed to live every day
Speaker 2: were rising, and he started to feel like his salary
Speaker 2: wasn't keeping up.
Speaker 1: My wife was earning in Pakistan. I was earning in Pakistan.
Speaker 1: But yet I think over time, both of us are
Speaker 1: salaries to lump together. Could not afford the higher rental prices,
Speaker 1: the high fuel prices.
Speaker 2: Asad took on more work, one side gig after another.
Speaker 1: I had to do three jobs. At one point, I
Speaker 1: started feeling that my health was badly effective because on
Speaker 1: a lot of these days I was working more than
Speaker 1: fifteen hours a day and perhaps more than eighty hours
Speaker 1: a week.
Speaker 2: But Asad still didn't feel it was enough to keep
Speaker 2: up with his expenses, and he was starting to feel
Speaker 2: like he needed to make a bigger change.
Speaker 1: You know, this feeling kept growing that I have to
Speaker 1: put bread on my table. I was entering my thirties.
Speaker 1: I got married. Also, I had more responsibilities, and I
Speaker 1: had to take the tough decision very painstakingly to come
Speaker 1: back to the life I was living before twenty.
Speaker 2: Fifteen, Asat decided to look for opportunities outside of Pakistan.
Speaker 2: He applied for scholarships to get a PhD, and he
Speaker 2: got one in the US. He moved to Boston in
Speaker 2: twenty twenty three. Assad is just one of a growing
Speaker 2: number of Pakistanis who feel like life is getting harder
Speaker 2: and harder inside the country.
Speaker 4: Priceres and taxis are going up in Pakistan and people
Speaker 4: feel more trapped. Everyone is much more poorer.
Speaker 2: That's Bloomberg's Pakistan bureau chief Fussy Mongy, who's based in Karachi.
Speaker 4: Last year, Pakistan recorded the highest outlaw in seven years.
Speaker 4: This is according to RISE data from United Nations. The
Speaker 4: exodus was most pronounced among skilled and educated. In twenty
Speaker 4: twenty three, the number of doctors, engineers, accountants and managers
Speaker 4: who left Pakistan doubled to sixty thousand. That makes Pakistan
Speaker 4: one of the top ten countries for immigration.
Speaker 2: Welcome to The Big Take Asia from Bloomberg News. I'm
Speaker 2: Rebecca Cheung Wilkins. Every week we take you inside some
Speaker 2: of the world's biggest and most powerful economies and the
Speaker 2: market's tycoons and businesses that drive this ever shifting region.
Speaker 2: Today on the show, one of the world's most populous
Speaker 2: nations is facing a.
Speaker 3: Severe brain drain.
Speaker 2: Why are so many educated workers leaving and where are
Speaker 2: they going? And what does this mean for Pakistan's already
Speaker 2: fragile economy. Migration from Pakistan is not a new phenomenon,
Speaker 2: but Bloomberg's Fuzzy Mongy told us that in twenty twenty
Speaker 2: two things started to get really bad. More than eight
Speaker 2: hundred thousand people left Pakistan that year.
Speaker 4: So it started about two years ago. Pakistan has been
Speaker 4: going through its biggest economic storm in its history in
Speaker 4: the past two three years, so a lot of people
Speaker 4: lost a lot of hope. It became tougher to make
Speaker 4: ends meet, so people started looking outside of Pakistan.
Speaker 2: One item that many households are struggling to afford is electricity.
Speaker 2: Fuzzy says that for some people, their electricity bill is
Speaker 2: almost as high.
Speaker 3: As their rent.
Speaker 2: Let's just pause for a second and imagine that your
Speaker 2: electricity bill being as much as your rent, and that
Speaker 2: means people can hardly save.
Speaker 3: If at all.
Speaker 4: Electricity bill would be the biggest component of expenses. People
Speaker 4: also go to the utility companies and be like, hey,
Speaker 4: you know, we got this bill, can you like cut
Speaker 4: it down into smaller installments so we can pay it
Speaker 4: over six months or nine months. People are actually getting
Speaker 4: loans from families and friends to make ends meet.
Speaker 2: Fasi says there are three main drivers behind these massive
Speaker 2: price hikes. For things like electricity. The first one is
Speaker 2: the rise in global commodity prices that has impacted everyone everywhere.
Speaker 2: But on top of that number two, Pakistan has seen
Speaker 2: its currency significantly devalued. It was the worst performing currency
Speaker 2: in Asia last year. The Pakistani rupee has lost almost
Speaker 2: half of its value in recent years, and that made
Speaker 2: imported goods much more expensive. Adding to the pain is
Speaker 2: a new tax Pakistan added last year.
Speaker 4: Pakistan imposed something called a luxury tax, So anything imported
Speaker 4: from overseas has gotten an extra luxury tax. And I
Speaker 4: can tell you from personal experience that Dorito's also falls
Speaker 4: in that category. And Dorito's in Karachi now costs like
Speaker 4: which ainomously more than how much it costs in Dubai.
Speaker 2: I can't believe that de Rito's are a luxury active.
Speaker 4: I don't have the list in front of me. But
Speaker 4: stuff like basics like chocolates and makeup, these things are
Speaker 4: also added a luxury tax.
Speaker 2: All of this pushed Pakistan's inflation rate to a record
Speaker 2: thirty eight percent last May, and it's remained the highest
Speaker 2: in Asia since then. And on top of paying more
Speaker 2: than ever for things they buy, some of the countries
Speaker 2: more educated and highly skilled workers are also now paying
Speaker 2: much more in taxes because they're considered some of the
Speaker 2: country's highest earners. But Farsi says most people in Pakistan
Speaker 2: don't make a lot of money to begin with.
Speaker 4: To be among the top twenty percent income owners in Pakistan,
Speaker 4: you need to have a salary of sixty four thousand rupees,
Speaker 4: which is only two hundred and thirty dollars a month.
Speaker 4: The idea is that if someone is paying a tax
Speaker 4: equal to what they've been in London or New York,
Speaker 4: then why am I not enjoying the same infrastructure and benefits.
Speaker 2: With both inflation and taxes spiraling out of control, numerous
Speaker 2: protests took place across.
Speaker 3: The country and people started to rush for the exit door.
Speaker 4: Anyone with a high degree who can move is moving,
Speaker 4: and we're seeing people move in all sorts of ways.
Speaker 4: People are going on visit visas to Middle East or
Speaker 4: the US even for that matter, and just hunting for jobs.
Speaker 4: Senior people in the financial industry. I know one of
Speaker 4: them applied for a refugee status in the US.
Speaker 2: This kind of brain drain is bad for any country,
Speaker 2: but it's especially troubling in Pakistan because it has already
Speaker 2: been struggling financially. Pakistan just recently made a seven billion
Speaker 2: dollar bailout deal with the International Panetary Fund, and it
Speaker 2: needs its highly educated and skilled workers to help pull
Speaker 2: the country back out of its debt crisis. So what
Speaker 2: can Pakistan do to stop this exodus of talent? And
Speaker 2: with its top earners gone, will Pakistan be able to
Speaker 2: avoid bankruptcy?
Speaker 3: That's after the break.
Speaker 2: Record numbers of Pakistanis, including some of the highest earners
Speaker 2: in the country, are leaving for other places, and Bloomberg's
Speaker 2: Fussy Mongy says the reason they're leaving has a look
Speaker 2: to do with the state of Pakistan's economy right now
Speaker 2: and where they see it going in the future.
Speaker 4: Pakistan's economic growth on an average of trailing three years
Speaker 4: is the lowest ever in its history right now, and
Speaker 4: list and economists are not predicting Pakistan's economic growth to
Speaker 4: go up anytime soon.
Speaker 2: On top of this slowing growth, the country is also
Speaker 2: dealing with massive debt. Pakistan faces about twenty six billion
Speaker 2: US dollars in loan repayments to partners like China, Saudi
Speaker 2: Arabia and the UAE, and it's also gotten huge loans
Speaker 2: from the IMF to help the country avoid a.
Speaker 4: Default, so the IMF is the lender of last resort.
Speaker 4: Pakistan is one of the most frequent customers for the IMF.
Speaker 4: The IMF classifies Pakistan's debt situation as borderline sustainable, so
Speaker 4: it's working on a fine rope. Earlier this year, or
Speaker 4: just a month or so ago, IMF approved a new
Speaker 4: seven billion dollar bailout. This was the twenty fifth program
Speaker 4: in Pakistan's history. And just to give some context as well,
Speaker 4: so Pakistan ended another program from the IMF earlier this year,
Speaker 4: and Pakistan has been going from one IMF program to theato.
Speaker 2: And while this latest IMF program may be giving a
Speaker 2: lifeline to Pakistan, it's also a major driving force for
Speaker 2: the country's substantial tax increases, the same tax increases that
Speaker 2: working people in Pakistan.
Speaker 3: Are so upset about.
Speaker 2: In order to meet the conditions set by the IMF
Speaker 2: for the deal, Pakistan recently raised the total tax revenue
Speaker 2: target by forty percent, the highest on record. This has
Speaker 2: created a challenge for the country's leaders, who recognize the
Speaker 2: need to collect more revenue, but also fear the increased
Speaker 2: taxes will lead to more skilled and educated workers leaving
Speaker 2: the country. Ali Paves Malik, the State Minister for Finance
Speaker 2: and Revenue, said, talent leaving is something we must be
Speaker 2: cognizant of.
Speaker 3: Here's Bloomberg's fussy Mangi again.
Speaker 4: They're aware of the fact that the taxes are high.
Speaker 4: They say, whenever they can give a relief to the
Speaker 4: income tax factor, they will give a relief. But it's
Speaker 4: going to be a rough ride for the next few years.
Speaker 4: It's going to be difficult. Economist say, it's going to
Speaker 4: be difficult for the government to give that relief.
Speaker 2: Fuszi, what happens if the government fails to stop more
Speaker 2: Pakistanis from leaving the country.
Speaker 4: Then we're going to have a talent issue in Pakistan.
Speaker 4: A lot of companies are not finding the same quality
Speaker 4: of people to replace the people who are leaving, so
Speaker 4: it's creating a massive hole of talent.
Speaker 3: So where does Pakistan go from here?
Speaker 2: Will Pakistan be able to navigate itself out of this
Speaker 2: economic crunch? Will the seven billion dollar IMF bailout be
Speaker 2: its last?
Speaker 3: Fuzzy says, there's no clear path forward.
Speaker 4: One thing to notice that the IMF program is a stabilizer,
Speaker 4: it's not a booster. For your economy. It doesn't solve
Speaker 4: the problems, the base problems of the economy. It can
Speaker 4: tell you what needs to be done, it can lay
Speaker 4: it out. In Pakistan, everyone says, everyone knows what the
Speaker 4: problem is. It's about getting the job done, and unfortunately
Speaker 4: we haven't been able to do the job for a
Speaker 4: long time. We're seeing a very serious effort this time.
Speaker 4: Whether we will be able to do it or not,
Speaker 4: that is a question that remains, and we'll just need
Speaker 4: to wait and see what happens.
Speaker 3: And as for Asado, we hear from in the beginning
Speaker 3: of the episode, he left Pakistan to pursue a life
Speaker 3: in the US. He says, even though he's chosen to
Speaker 3: leave his.
Speaker 2: Home country for now, he still holds out hope that
Speaker 2: he could one day return.
Speaker 1: I think that option never goes out of the window,
Speaker 1: and it will always stay on the cards. It's my country,
Speaker 1: I love it, and it's a sad situation. But I
Speaker 1: guess when I decided to jump the boat, I thought
Speaker 1: about all these things. But constantly, your passion for the country,
Speaker 1: your passion for meaningful change, it's constantly pitted against economic responsibility,
Speaker 1: and at the end of the day, you have to
Speaker 1: put your weight behind economic responsibility more than pure actions
Speaker 1: or emotionality for your country.
Speaker 2: This is The Big Take Asia from Bloomberg News. I'm
Speaker 2: Rebecca Cheung Wilkins. This episode was produced by Young Young,
Speaker 2: Naomi Ung and Jessica bec It was mixed by Alex
Speaker 2: Segura and fact checked by Eddie dwe It was edited
Speaker 2: by Caitlin Kenney, Aaron Edwards, and Kai Schultz. We'd like
Speaker 2: to give special thanks to the Bloomberg Originals team. Naomi
Speaker 2: Shavin is our senior producer, Elizabeth Ponso is our senior editor,
Speaker 2: Nicole Beemstabor is our executive producer, and Sage Bauman is
Speaker 2: Bloomberg's head of podcast Please follow and review The Big
Speaker 2: Take Asia wherever you listen to podcasts. It really helps
Speaker 2: new listeners find the show.
Speaker 3: See you next time.