UAE suspension of work visas to Pakistan may cause debilitating economic effects

The United Arab Emirates (UAE) has suspended work visas and visit visas to 13 Muslim-majority countries, including Pakistan. Foreign Office spokesperson Zahid Hafeez Chaudri confirmed the news yesterday. The UAE ban on work visas may have mitigating economic effects for Pakistan and the other countries subjected to the ban.

Initially, only the ban on visit visas was announced, but it has now been confirmed that work and employment visas have been suspended.

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A letter issued by the Dubai Airport Free zone says: “As per the latest circular released by the Immigration Department Entry Permit Applications [for individuals outside the country] including applications for new employment visa and new visit visa [long, short and tourist] will be suspended until further notice.”

Countries affected by the UAE ban on work visas include Pakistan, Syria, Turkey, Iran, Yemen, amongst others.

Ban linked to the pandemic? 

A statement by the Foreign Office released last week suggested that the UAE ban was only enacted due to the coronavirus’s fears. However, according to reports by Al Jazeera, the ban has been linked to security concerns.  More details on the ‘security concerns’ have not been revealed.

Sources within Pakistan and Islamabad have not formally been made privy to the reasons behind the ban.

“If the novel coronavirus was the reason behind the ban, India should have been on the list since it has reported one of the highest cases in the world,” commented Senator Anwar Baig, who runs a recruitment agency.

Baig was of the view that suspension of work or employment visas were worrisome, and he believed that the ban was “Pakistan specific.”

Remittances essential for Pakistan economy

The UAE is home to many Pakistani laborers, who have been utilized in various areas.

Since the ban came into effect, one recruitment agency based in Rawalpindi has lost 3000 jobs.

Read more: Israel, UAE agree to visa-free travel as ties deepen.

Senator Baig revealed to The Express Tribune that in 2016 Pakistan sent 326,000 specialists to the UAE, 290,000 in  2016, 275,000 in  2017, 208,000 in 2018, 211,000 in 2019, and in any event, even during the Covid-19 flare-up until October, 51,000 Pakistanis went to the Gulf nation for work.

These laborers, as indicated by Senator Baig, yearly send near $4 billion in remittances that are essential for the Pakistani economy and its current accounts.

Senator Baig also forewarned that the labor market would be lost to India if the issue was not addressed.

According to a statement by an enrollment specialist to The Express Tribune, after failing to send 3000 Pakistani Laborers to the UAE for work, he resorted to Indian laborers who are still allowed to work there.

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Special Assistant to the Prime Minister on Overseas Pakistanis and Human Resource Development Syed Zulfi Bukhari also affirmed that the UAE had suspended work visas for Pakistan.

He, too, was not aware why the boycott had been enacted in the first place.

Remittances from the UAE on the decline overall regardless of the ban

According to Matt Smith, writing for the S&P Global said that remittances from the Middle East and North Africa, which mainly comprise money sent home by migrant workers in the wealthy six-member Gulf Cooperation Council, are set to fall by 19.6% in 2020, the World Bank forecasts.

“The market is very competitive. Everyone’s present in the Gulf: global players, regional providers, and a whole range of niche and corridor specialists,” said Grant Lines, chief revenue officer at MoneyGram International Inc., which operates in more than 200 countries and territories and serves 22,000 currency pairs.

Such broad involvement is understandable, given the size of the market. The UAE’s outbound remittances totaled $44.4 billion in 2018, second only to the U.S. Saudi Arabia was third with $33.9 billion, while Kuwait, Qatar, and Oman were also in the top 20.

UAE’s ban on worker visas to these 13 countries will further affect the flow of remittances from the country.

GVS News Desk