Return Migration to Pakistan during COVID19 Pandemic: Unmaking the Challenges

In order to contain the spread of corona virus (COVID-19) disease, strict border closure measures have been taken globally. Migrants and refugees are affected across the globe due to such measures. Amid the COVID-19 pandemic, the economic recession escalated across the globe which is expected to have serious implications for the migrant workers and laborers. Potohar region was selected to explore implications of return migration from abroad, but the fieldwork halted immediately due to the pandemic outbreak. Since the data on Pakistani migrants is dispersed and scant, it was nearly impossible to stick to the locale for returnees. Therefore, the data for this study was collected qualitatively using exploratory methodology. In-depth interviews were conducted using interview guide as a tool of research. The paper is based on analysis of the narratives based on the experiences of the returnees especially. It sheds light on the state of the stranded Pakistani migrants who have been returning or awaiting repatriation due to layoffs. It delves into long-run and short-run challenges due to return migration, in Pakistan which highly depends on remittances from abroad. Challenges created by sudden end to remittances, entrepreneurial setups and returnees’ reintegration in the society need immediate attention. It is recommended that the state should support and monitor the migrants living abroad, ease out issues in repatriation of the laid off workers, pave way for investment, offer insurance plans, reduce reliance on remittance flow and engage them in Public Private Partnerships for sustainable reintegration.

from Debt to Equity Advocacy: Islamic Model Firm Capital Structure

Legal experts and economists advocate that the century-old debt-equity distinction is responsible for the global financial crisis (GFC) and instability.This regulation advocates and subsidizes debt (unlike equity financing) as tax deductible.This regulation, in turn, reduces the cost of debt financing and eludes debt as a relatively cheap source of financing. Later, theoretical developments related to corporate financing policies explicitly materialized interest tax deductibility and advocated debt over equity financing.Researchers have highlighted the need to reframe these debt subsidizing corporate tax regulations.This thesis offers a critical analysis of debtincentivized corporate tax and financing policies and provides an Islamic perspective on this vital tax deductibility debate.This study aims to help abolish the corporate tax incentive to debt and shift the incentive toward equity. This study also attempts to empirically test the implications of proposed interest taxability and dividend tax deductibility on corporate financing policies. This thesis estimates a modified Modigliani and Miller (1963), (later M & M) firm valuation model to incorporate interest taxability and dividend tax deductibility.The estimated model is linear and static to the single period t.This thesis uses a simulation technique to evaluate the estimated model and conducts various policy experiments to observe the potential impacts of proposed policy reforms on a firm’s cost of capital and overall value.The simulated results indicate that, in the presence of debt tax incentives, firms lose value over every subsequent unit of debt financing.Zero-leverage firms, in the presence of the interest tax shield, may stabilize their value.The present study finds that aligning a corporate financing policy with the fundamentals of Islamic finance helps restrain corporate indebtedness and promote profit and loss sharing.According to the proposed model, firms have a reduced cost of financing, tend to be more stable, and are valueoriented, especially when they avoid debt to the maximum extent.The results indicate that minimum debt financing in the presence of a dividend tax shield reduces firms’ costs of financial distress and their proneness to bankruptcy.Islamic finance can provide a corporate financing model for sustainable and equitable wealth creation.