The Role of Agriculture and Foreign Remittances in Mitigating Rural Poverty: Empirical Evidence from Pakistan

Abstract

Background

This study examines the role of the agriculture and foreign remittances in mitigating rural poverty in Pakistan.

Methods

The data used relate to the period 1980–2017 and are sourced from the World Bank and the Economic Survey of Pakistan produced annually by the Ministry of Finance. The ARDL technique was used to calculate the effects of agriculture and foreign remittances on rural poverty.

Results

The results of this study indicate that agriculture helps to mitigate rural poverty in the long run, but that foreign remittances are more effective in reducing rural poverty in the short run. In this paper, results confirm the existence of correlations between agriculture, foreign remittances and rural poverty.

Conclusion

The outcomes of this study support the call for the government to introduce agricultural credit schemes for the rural population of Pakistan. Moreover, the government should take steps to enhance diplomatic relations with other countries and simplify policies and visa application procedures for Pakistani workers. Finally, this study suggests the government should simplify procedures for the transfer of foreign remittances to Pakistan.

Keywords:

• foreign remittances
• rural poverty
• agriculture
• Pakistan

Ethics Statement

The research ethics committee of Guangxi University, Guangzhou University and Nanjing University of Aeronautics and Astronautics approved this study. The World Bank and Economic Survey of Pakistan custodians gave consent over the email.

Author Contributions

All authors have equally contributed to drafting the manuscript, data collection, analysis, and interpretation of data, reading, and approving the final version to be published. Moreover, all authors are confirming that the agreement to be accountable for all aspects of the work in ensuring that questions related to the accuracy or integrity of any part of the work are appropriately investigated and resolved.

Disclosure

The authors declare that they have no conflicts of interest in this work.

Additional information

Funding

This paper is supported by the National Social Science Fund of China (Grant No. 16XJL006).