Earlier this year, the World Bank moved Pakistan out of its South Asia regional grouping and placed it in a new category: Middle East, North Africa, Afghanistan and Pakistan, or MENAAP. The change did not come through a major speech or a public announcement. It appeared in the Bank’s data and metadata.
South Asia, as a World Bank category, now contains Bangladesh, Bhutan, India, Maldives, Nepal, and Sri Lanka. Pakistan, after decades of being compared with its subcontinental neighbours, now sits alongside Saudi Arabia, Egypt, Iraq, Iran, and the Gulf states.
This may look like Pakistan’s problem, not ours. Bangladesh should pay attention because it shares part of the same development pattern: Dependence on Gulf labour markets, remittances, export earnings, external lenders and the constant pressure to keep foreign exchange flowing.
The Bank presents this as a technical adjustment for analytical purposes, and there is something to that. Pakistan’s economic links with the Gulf are real enough -- labour migration, remittances, energy imports and financial flows from Saudi Arabia and the UAE all matter deeply. Fair enough.
But that does not settle the question. A category is never just a label. It tells officials, researchers, and lenders what a country should be compared with, and what kind of future seems plausible.
There is a useful point here from critical social theory. Power does not work only through force. It also works through common sense. The World Bank is not only a lender. It is one of the institutions through which the world is measured.
Its datasets, forecasts and regional groupings are used by governments, investors, rating agencies and policy-makers everywhere. The World Bank publishes the World Development Indicators, one of the most widely used global development datasets. Once Pakistan is routinely reported through MENAAP, the new frame may begin to appear in reports, charts, policy papers, and official speech.
Pakistan did not become a Middle Eastern economy overnight. Its history, agrarian relations, industrial base, languages, and political conflicts remain deeply South Asian. But once a new category is used often enough, it begins to shape the reality it was meant only to record.
Pakistan’s growth may increasingly be read beside a MENAAP regional outlook of 1.8%, rather than South Asia’s much stronger 6.3% forecast. Over time, the map begins to change how people think about the territory.
Pakistan’s Gulf orientation has deep roots. The oil boom of the 1970s created a large demand for migrant labour. Workers from across South Asia -- including large numbers from Bangladesh -- went to build roads, ports, airports and cities. The wealth came from oil, but the labour came from countries like Pakistan, Bangladesh, and India.
I grew up in Tripoli, Libya, in the 1980s, and I saw this pattern firsthand. Workers came from across South Asia and North Africa to do the hard, low-paid and less secure work that oil wealth demanded -- construction, services, maintenance.
Libya was visibly changing: Roads, buildings, and public works were everywhere. But many of the workers who helped build that world remained outsiders, temporary and disposable. It was my first encounter with a question I have been thinking about since: Who builds these economies, and on what terms?
Under General Zia ul-Haq, Pakistan’s relationship with Saudi Arabia deepened in economic, military and ideological terms. Remittances from the Gulf became a structural feature of the economy.
Successive governments found it easier to encourage migration than to build a broad industrial base at home. The Gulf provided an outlet for labour that Pakistan could not employ. Remittances propped up consumption and the balance of payments, while reducing the political pressure that mass unemployment might otherwise have placed on the state.
The scale of Pakistan’s dependence is striking. In fiscal year 2025, it received a record $38.3 billion in remittances, with Saudi Arabia and the UAE as the two largest sources. That figure rivals the country’s total merchandise exports. For millions of households, this money is a lifeline, and any serious argument has to begin there.
But keeping people afloat is not the same thing as a development strategy. Much of the remittance money passes into consumption, land, property, private education, private healthcare and imported goods.
The money enters the household, moves through local markets, and flows back out to producers elsewhere. Households survive, but the productive economy around them stays more or less the same.
Middle East political economists have long used the term rentier state to describe many oil economies of the region. Hossein Mahdavy developed the idea in relation to Iran, and Hazem Beblawi later put the point starkly: In a rentier economy, “only few are engaged in the generation of this rent,” while most people are involved in its distribution and use.
Pakistan’s workers migrate to the Gulf under the kafala system, which despite nominal reforms continues to restrict workers’ freedom and bargaining power.
Karl Marx had a term for this kind of process: Formal subsumption -- capital takes command of labour without transforming how the work is done. Profit comes from control rather than from raising productivity through technology.
I would not call Pakistan’s situation simply a policy failure. In some ways the model works, at least for its ruling groups -- the military-bureaucratic elite, the landed oligarchy, sections of the financial class.
It exports social pressure and brings in foreign exchange. The urgency of land reform, public education, labour rights and industrial policy fades, and the state gets to postpone changes that would threaten the people who run it.
By placing Pakistan in MENAAP, the World Bank is giving institutional weight to this development path -- one centred on migration, remittances, energy dependence, external finance and rentier capital.
The Bank’s new Country Partnership Framework for Pakistan runs to 2035, with a reported $20bn lending plan. The policy conversation shifts accordingly: Instead of asking why Pakistan has failed to create productive employment, the discussion moves toward managing migration, fiscal stability and external financing.
What concerns me is that a partial truth, repeated in enough official documents, starts to feel like the whole picture.
Why should any of this matter in Dhaka?
The mirror is uncomfortably close. In 2025, Bangladesh received a record $32.8bn in remittances. Saudi Arabia and the UAE were among the top sources. Over four million Bangladeshis left for overseas employment in the four years up to fiscal year 2024-25.
The money coming back has been crucial -- stabilizing reserves, supporting the current account, and keeping millions of families afloat. Nobody who has seen what remittances mean to a family in Comilla or Sylhet would dismiss their importance.
Drive through Uttara or Purbachal and you see the same pattern -- apartment blocks, shopping complexes, and private clinics funded by money earned in Riyadh or Dubai, while public infrastructure and industrial investment lag behind.
But the structural question is the same one that haunts Pakistan. Bangladesh has something Pakistan lacks -- a garment industry that, for all its costs -- low wages, dangerous conditions, and the 1,134 lives lost at Rana Plaza -- represents a form of productive transformation.
Factories were built. An industrial working class was created. Export earnings come from making things, not just from sending workers abroad. That distinction matters enormously.
But Bangladesh cannot rely on garments forever without moving into higher-value production, better wages, stronger labour rights and wider industrial diversification.
The danger is that this distinction gets eroded. If Bangladesh’s development story increasingly depends on remittances rather than on deepening and diversifying its industrial base, the same logic that pulled Pakistan toward MENAAP could, over time, reshape how Bangladesh is understood by development institutions.
The World Bank has not reclassified Bangladesh, and may never do so. But institutional categories are not fixed. They shift when the underlying economic patterns shift.
Bangladesh’s approaching graduation from Least Developed Country status is itself a reclassification with material consequences. When Bangladesh graduates from LDC status, it will eventually face the erosion of preferential trade access, including in European markets after the transition period.
That matters because those markets sustain a large part of the garment industry-- the very markets that sustain the garment industry. The productive sector that sets Bangladesh apart from Pakistan is itself vulnerable to an institutional category shift.
Pakistan’s reclassification is not Bangladesh’s crisis. But it is Bangladesh’s warning. The question is whether the next generation of Bangladeshis will find decent, productive work at home -- in factories, services, technology, agriculture -- or whether the economy will drift further toward a model where millions leave, send money back, and the structures that should provide employment at home remain unreformed.
The World Bank’s move does not need to be explained through hidden motives. It is more ordinary than that, which is partly why it matters.
Institutions classify and compare, and over time their categories stop looking like choices. They become the background against which everything else is discussed.
Pakistan has been moved to another place on the development map. Bangladesh remains in South Asia, for now. The question is what we do with that position -- and whether we learn anything from watching a neighbour’s reclassification before it is too late to shape our own trajectory.
Jamil Iqbal is a Bangladeshi-British researcher and writer based in London. His work focuses on political economy, migration, labour and development in South Asia.
