Labour emigration and its effects on the economies of South Asia

Since the mid-1970s hundreds of thousands of workers have left the South Asian countries for the Middle East on the basis of temporary labour contracts. Their remittances have become their home countries' most important source of foreign exchange. The author explores the impact of this phenomenon on the economic development of India, Pakistan, Bangladesh and Sri Lanka, focusing on growth and structural change. The results suggest that the South Asian countries experienced a short-term boom due to the workers' remittances. However, disaggregation reveals that behind this apparent boom are sectors which have lagged behind in development. (DÜI-Sen)