From time to time varying figures of unemployment in Pakistan are quoted. If one official agency says that joblessness is declining, another comes out contradicting the claim and says it is going up. According to the latest data released by the government, unemployment rose to 8.3% during fiscal 2015, the highest level in 13 years.
Estimates show that the rate of unemployment rose for each of the present government’s two years in office. The number of unemployed people in Pakistan now is said to be 1.5 million higher than in 2013.
The last time the unemployment rate was this high was in fiscal 2002, when it stood at 8.3% during the early years of the Musharraf administration. During the entire period of Zardari regime, the unemployment rate went up by only 1%, rising from 5.2% in 2008 to 6.2% in 2013. By contrast, the unemployment rate has increased by more than twice that much in the first two years of the PML-N government.
At the end of fiscal 2014, which was the first year of the PML-N government, the unemployment rate jumped to 7.3%, as 800,000 more people joined the ranks of the jobless due to the slow economic growth rate of only 4%. The pool of unemployed people had increased to 4.6 million by June 2014. During the fiscal year 2015, another 700,000 people were added to the unemployed population and the unemployment rate stood at 8.3%. The pool of unemployed people has grown to 5.3 million, as the government again missed its economic growth rate target of 5.1%. According to various independent and official studies, Pakistan needs an annual growth rate of at least 7% to create enough jobs to absorb new entrants into the labour market.
The ranks of the unemployed are expected to rise by another 400,000 people in fiscal 2016, taking the additional number of jobless people during the Nawaz Sharif tenure to 1.9 million. The unemployment rate is expected to jump up to 8.6%, a number that could be even higher if the government’s target growth rate of 5.5% for fiscal 2016 is missed. The Planning Commission has also projected the same figure. According to an official document presented before the National Economic Council (NEC) recently, the PM was informed that the unemployment rate stood at 8.3 percent for the outgoing fiscal year, estimating that the total number of unemployed people stood at 5.3 million. The study further showed that the total number of employed people stood at 59 million in 2014-15 and this figure was projected to go up to 60.5 million in next financial year.
Faulty and varying definitions of unemployment are among the reasons why joblessness figures differ from source to source. For example, in one document, an employee is defined as “anyone over the age of 10, who worked at least one hour during the reference period and was either paid-employed or self-employed.” The government also treats a person as employed who is jobless but helping his family member in routine work. According to a recent survey, the “own account” worker ratio slightly improved to 36.1% in 2014-15 from 35.4% in the preceding year. The contributing family worker ratio stood at 23.8%, down from 24.4%. If “own account” workers and contributing family workers are excluded from the category of employed people, the unemployment rate will rise sharply.
Another reason why the unemployment rate appears misleading is the fact that annual economic growth in 2014-15 was just 4.2%, which was far below the required pace needed to absorb the new entrants in the job market. According to the findings of a recent survey, unemployment in the age groups of 20-24 years, 25-29 years, 30-34 years and 35-39 years significantly increased in 2014-15 compared to the previous year. The 20-24 years age group specially saw a rapid increase in unemployment compared to the other age groups.
As the economy is not growing at a rapid pace, finding jobs in Pakistan has become a serious problem for a majority of the people, especially the youth. The educated classes are finding it increasingly hard to get a suitable job. If we take into account the figures for hidden unemployment and underemployment, the overall jobless rate goes up to 30 percent. As we all know, government jobs are few and far between, while in the private sector, opportunities are shrinking due to the slowdown in industrial growth caused by energy shortages and security issues. Karachi is the economic engine of Pakistan but for many years it has not been working to its full potential. New investors are not coming to the city because of the disturbed law and order situation for the past many years.
Pakistan has numerous natural resources but the problem is that they are not being fully utilized. The country is faced with economic stagnation due to which job opportunities have been shrinking. The result is that the cream of our country comprising engineers, doctors, scientists, IT experts, technicians and accountants are leaving the country in search of jobs.
It is time the government moved speedily to check this brain drain. This objective cannot be achieved unless we speed up the pace of industrial development in the country. To this end the primary need is to improve the law and order situation. Energy supply also needs to be sufficiently augmented to feed the existing industries and encourage the establishment of new ones. The government also needs to promote the establishment of small industries in the undeveloped areas, an initiative which has been found to be a good solution to the unemployment problem in many countries Agro-industry is another sector whose development can go a long way to absorb the youth bulge in the rural areas.
Side by side steps should be taken to reshape the education structure in Pakistan to produce more specialized and technically qualified manpower to fill the skills gap in many sectors of the economy. For this purpose more technical training institutes need to be established all over the country. In a limited way the government has recently launched self employment schemes to tackle joblessness among the youth. The scope and range of these schemes should be expanded to benefit the maximum number of people, especially in the rural areas.
A holistic approach is needed to tackle the unemployment problem on a long term basis. A growing economy is the best insurance against rising unemployment. To this end the government should do perspective planning, focusing on areas with the highest potential for job creation. This we have failed to do so far. At the same time, a new incentives package should be devised to attract foreign investors to set up their businesses here.
Estimates show that the rate of unemployment rose for each of the present government’s two years in office. The number of unemployed people in Pakistan now is said to be 1.5 million higher than in 2013.
The last time the unemployment rate was this high was in fiscal 2002, when it stood at 8.3% during the early years of the Musharraf administration. During the entire period of Zardari regime, the unemployment rate went up by only 1%, rising from 5.2% in 2008 to 6.2% in 2013. By contrast, the unemployment rate has increased by more than twice that much in the first two years of the PML-N government.
At the end of fiscal 2014, which was the first year of the PML-N government, the unemployment rate jumped to 7.3%, as 800,000 more people joined the ranks of the jobless due to the slow economic growth rate of only 4%. The pool of unemployed people had increased to 4.6 million by June 2014. During the fiscal year 2015, another 700,000 people were added to the unemployed population and the unemployment rate stood at 8.3%. The pool of unemployed people has grown to 5.3 million, as the government again missed its economic growth rate target of 5.1%. According to various independent and official studies, Pakistan needs an annual growth rate of at least 7% to create enough jobs to absorb new entrants into the labour market.
The ranks of the unemployed are expected to rise by another 400,000 people in fiscal 2016, taking the additional number of jobless people during the Nawaz Sharif tenure to 1.9 million. The unemployment rate is expected to jump up to 8.6%, a number that could be even higher if the government’s target growth rate of 5.5% for fiscal 2016 is missed. The Planning Commission has also projected the same figure. According to an official document presented before the National Economic Council (NEC) recently, the PM was informed that the unemployment rate stood at 8.3 percent for the outgoing fiscal year, estimating that the total number of unemployed people stood at 5.3 million. The study further showed that the total number of employed people stood at 59 million in 2014-15 and this figure was projected to go up to 60.5 million in next financial year.
Faulty and varying definitions of unemployment are among the reasons why joblessness figures differ from source to source. For example, in one document, an employee is defined as “anyone over the age of 10, who worked at least one hour during the reference period and was either paid-employed or self-employed.” The government also treats a person as employed who is jobless but helping his family member in routine work. According to a recent survey, the “own account” worker ratio slightly improved to 36.1% in 2014-15 from 35.4% in the preceding year. The contributing family worker ratio stood at 23.8%, down from 24.4%. If “own account” workers and contributing family workers are excluded from the category of employed people, the unemployment rate will rise sharply.
Another reason why the unemployment rate appears misleading is the fact that annual economic growth in 2014-15 was just 4.2%, which was far below the required pace needed to absorb the new entrants in the job market. According to the findings of a recent survey, unemployment in the age groups of 20-24 years, 25-29 years, 30-34 years and 35-39 years significantly increased in 2014-15 compared to the previous year. The 20-24 years age group specially saw a rapid increase in unemployment compared to the other age groups.
As the economy is not growing at a rapid pace, finding jobs in Pakistan has become a serious problem for a majority of the people, especially the youth. The educated classes are finding it increasingly hard to get a suitable job. If we take into account the figures for hidden unemployment and underemployment, the overall jobless rate goes up to 30 percent. As we all know, government jobs are few and far between, while in the private sector, opportunities are shrinking due to the slowdown in industrial growth caused by energy shortages and security issues. Karachi is the economic engine of Pakistan but for many years it has not been working to its full potential. New investors are not coming to the city because of the disturbed law and order situation for the past many years.
Pakistan has numerous natural resources but the problem is that they are not being fully utilized. The country is faced with economic stagnation due to which job opportunities have been shrinking. The result is that the cream of our country comprising engineers, doctors, scientists, IT experts, technicians and accountants are leaving the country in search of jobs.
It is time the government moved speedily to check this brain drain. This objective cannot be achieved unless we speed up the pace of industrial development in the country. To this end the primary need is to improve the law and order situation. Energy supply also needs to be sufficiently augmented to feed the existing industries and encourage the establishment of new ones. The government also needs to promote the establishment of small industries in the undeveloped areas, an initiative which has been found to be a good solution to the unemployment problem in many countries Agro-industry is another sector whose development can go a long way to absorb the youth bulge in the rural areas.
Side by side steps should be taken to reshape the education structure in Pakistan to produce more specialized and technically qualified manpower to fill the skills gap in many sectors of the economy. For this purpose more technical training institutes need to be established all over the country. In a limited way the government has recently launched self employment schemes to tackle joblessness among the youth. The scope and range of these schemes should be expanded to benefit the maximum number of people, especially in the rural areas.
A holistic approach is needed to tackle the unemployment problem on a long term basis. A growing economy is the best insurance against rising unemployment. To this end the government should do perspective planning, focusing on areas with the highest potential for job creation. This we have failed to do so far. At the same time, a new incentives package should be devised to attract foreign investors to set up their businesses here.
Post a Comment