Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: When Asad Ijaz Butt was growing up, he was ambitious.
Speaker 2: He left his home country of Pakistan to attend college
Speaker 2: in Canada. He graduated with honors and got a job
Speaker 2: there as a management consultant. But in twenty fifteen, when
Speaker 2: Asad was in his mid twenties, he made a decision
Speaker 2: that surprised people close to him.
Speaker 1: I left everything.
Speaker 2: He gave up his job in Canada to move back
Speaker 2: to Pakistan.
Speaker 3: I was one of the few young Pakistanis who had
Speaker 3: a career in North America. A lot of Pakistanis found
Speaker 3: it very surprising that somebody who was settled in a
Speaker 3: 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 Asad needed to live every day
Speaker 2: were rising, and he started to feel like his salary
Speaker 2: wasn't keeping up.
Speaker 3: My wife was earning in Pakistan. I was earning in Pakistan.
Speaker 3: But yet I think over time, both of us are
Speaker 3: salaries to lump together. Could not afford the higher rental prices,
Speaker 3: the high fuel prices.
Speaker 2: Asad took on more work, one side gig after another.
Speaker 1: I had to do three jobs.
Speaker 3: At one point, I started feeling that my health was
Speaker 3: badly effective because on a lot of these days I
Speaker 3: was working more than fifteen hours a day and perhaps
Speaker 3: more than eighty hours 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 3: You know, this feeling kept growing that I have to
Speaker 3: put bread on my table.
Speaker 1: I was entering my thirties. I got married.
Speaker 3: Also, I had more responsibilities, and I had to take
Speaker 3: the tough decision very painstakingly to come back to the
Speaker 3: 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: Pritures and taxes 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 outflow in seven years.
Speaker 4: This is according to GRE 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 severe brain train. Why are so
Speaker 2: many educated workers leaving and where are they going? And
Speaker 2: what does this mean for Pakistan's already fragile economy. Migration
Speaker 2: from Pakistan is not a new phenomenon, but Bloomberg's Fuzzy
Speaker 2: Mongy told us that in twenty twenty two things started
Speaker 2: to get really bad. More than eight hundred thousand people
Speaker 2: 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 as their rent. Let's just pause for
Speaker 2: a second and imagine that your electricity bill being as
Speaker 2: much as your rent, and that means people can hardly
Speaker 2: save 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: ginormously 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 push 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'll pay 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 the country and people started to
Speaker 2: 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 Monetary 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? That's after the break record numbers of Pakistanis,
Speaker 2: including some of the highest earners in the country, are
Speaker 2: leaving for other places, and Bloomberg's Fussy Mongy says the
Speaker 2: reason they're leaving has a look to do with the
Speaker 2: state of Pakistan's economy right now and where they see
Speaker 2: 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 default.
Speaker 4: So the IMF is the lender of last resort. Pakistan
Speaker 4: 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 are so upset about. In order
Speaker 2: to meet the conditions set by the IMF for the deal,
Speaker 2: Pakistan recently raised the total tax revenue target by forty percent,
Speaker 2: the highest on record. This has created a challenge for
Speaker 2: the country's leaders, who recognize the need to collect more revenue,
Speaker 2: but also fear the increased taxes will lead to more
Speaker 2: skilled and educated workers leaving the country. Ali Paves Malik,
Speaker 2: the State Minister for Finance and Revenue, said, talent leaving
Speaker 2: is something we must be cognizant of. Here's Bloomberg's fussy
Speaker 2: 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 sector, 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: Fuzzi. What happens if the government fails to stop more
Speaker 2: Pakistani Is 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 2: So where does Pakistan go from here? Will Pakistan be
Speaker 2: able to navigate itself out of this economic crunch? Will
Speaker 2: the seven billion dollar IMF bailout be its last? Fuzzy says,
Speaker 2: 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 2: And as for Asad, who we hear from in the
Speaker 2: beginning of the episode, he left Pakistan to pursue a
Speaker 2: life in the US. He says, even though he's chosen
Speaker 2: to leave his home country for now, he still holds
Speaker 2: out hope that he could one day return.
Speaker 3: I think that option never goes out of the window,
Speaker 3: and it will always stay on the cards. It's my country,
Speaker 3: I love it, and it's a sad situation. But I
Speaker 3: guess when I decided to jump the boat, I thought
Speaker 3: about all these things. But constantly, your passion for the country,
Speaker 3: your passion for meaningful change, it's constantly pitted against economic responsibility,
Speaker 3: and at the end of the day, you have to
Speaker 3: put your weight behind economic responsibility more than press or
Speaker 3: 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 Beck. 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 Beamstabor 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. See you next time.