The Fall of Kabul has sent shockwaves through our region, and the risk is that there may be a much larger spillover if the situation in Afghanistan deteriorates further. Washington did not expect a sudden takeover of the country by Taliban as is evident from Secretary of State Antony Blinken’s statement: “The Afghan Security Forces… proved incapable of defending the country, and that did happen more rapidly than we anticipated.” New developments have been occurring every hour since August 15. Thousands of people want to flee the country.
As Afghanistan’s next-door neighbour, Pakistan is in a tricky position where it needs to take crucial steps to deal with the uncertainty and avoid a possibly large influx of refugees. Pakistan is currently hosting the highest number of Afghan refugees in the world. According to the latest UNHCR estimates, around 1.44 million registered Afghan refugees reside in the country.
Pakistan’s past experience with Afghan refugees has provided crucial lessons regarding the labour market. The Afghan labour working in many regions of Pakistan is in competition with the local labour force, especially in the construction sector. Many contractors in Khyber-Pakhtunkhwa and Balochistan hire Afghan workers as they are known for their tougher work ethic and willingness to accept lower wages than the locals. There is evidence that most unskilled Afghan labourers picked up their skills through learning by doing; and once skilled, they returned to Afghanistan to seek employment or integrate into the local communities. But it is crucial to understand that the current crisis may limit this voluntary return. Estimates from the last four years show a steep fall in voluntarily return of refugees from 59,020 in 2017 to 1,125 in 2020.
A 2017 study by Amdadullah Baloch elaborates how over the short- and long-term, influx of Afghan refugees lowered real economic activity in Pakistan, highlighting a negative impact on economic growth.
The recent takeover of Kabul and decline in voluntary repatriation may put a greater burden on Pakistan’s economy and labour market. Considering how Pakistan has been managing its way through the economic challenges caused by Covid-19, it may be even more difficult to support additional refugees coming from across the border.
It is important to understand the capacity issue. Pakistan has a growing population. According to the 2017 UN Pakistan National Human Development Report, 64% of the country’s population is under the age of 29. And ILO’s 2019 estimates put youth unemployment in Pakistan at 7.81%. These facts need to be considered when accepting an influx of refugees, especially when the labour market already has excess workers who lack job opportunities. The opportunities available for unskilled labour are limited, and majority employment comes through the informal economy. Under these conditions, Pakistan will be hard-pressed to facilitate unskilled refugees, as they will put more burden on local businesses. Moreover, Pakistan, being a developing country, will be constrained in providing basic facilities such as healthcare, shelter and access to food and water.
The federal government’s position regarding refugees is clear. According to NSA Dr Moeed Yusuf, aid agencies should aim to accommodate Afghans within Afghanistan. He emphasises “Pakistan does not have the capacity to contain more refugees.” In July, Federal Information Minister Fawad Chaudhry discussed how “in the past, Pakistan had an open 2,700km border with Afghanistan, which has now been fenced, and in case of new refugees, appropriate steps would be initiated to handle them in a systematic manner.”
The key question here is: what new steps would the government adopt? Will it follow Iran’s example of turning away all Afghan refugees or will it develop a strategy to contain the refugees at the border? Whatever the policymakers strategise, they need to consider the long-term economic costs and ensure that lessons from the past are not forgotten.