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

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.