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Investment in human capital long-term growth path for Pakistan

Human capital development inevitable for manpower export and remittances

With the contribution of human capital in total wealth growing globally, the creation of a skilled labor force that is more productive and better able to adopt and adapt to new technologies is at the core of a long-term growth path for Pakistan. To this end, improvements in education and learning need to go hand in hand with improvements in health and well-being to maximize the cognitive potential of both men and women in the population. Pakistan has made progress on these fronts, but it is uneven and slow. If Pakistan is to grow in an inclusive manner, the government must prioritize and invest equitably in the development of its human capital — the country’s most important resource.

Pakistan has important strategic endowments and development potential. The increasing proportion of Pakistan’s youth provides the country with a potential demographic dividend and a challenge to provide adequate services and employment. One of the key strengths of Pakistan is the demographic bulge especially growing proportion of young adults unlike some of the developed countries, which are having increasing proportion of aged citizens. Pakistan has capacity to send across large number of young unskilled and semi-skilled people. Having over 30 million plus population in the age group of 25-35, Pakistan can put this valuable asset for the good of the country by imparting training in different technical fields to respond market needs abroad. Certainly, there is no second opinion about restricting the flow of manpower to different countries as it brings both social and economic benefits to our country such as it reduces poverty and unemployment, it helps increase foreign remittances, which could be diverted to viable development projects. The returning workforce brings back the experience and knowledge that facilitate in technology transfer, skills development and knowledge exchange.

Manpower export and remittances

The emigration decline to Saudi Arabia is the most substantial amongst the destination countries for Pakistani workers. However, while Saudi Arabia noticed a decline of 48 percent in overall labor recipients between January to June 2017, other Gulf countries observed a decrease too. A comparison shows that emigration to the UAE was only down 6.27 percent and to Bahrain 4.41 percent over the same period, while Oman decreased by 3.75 percent in comparison to 2016.

 

Oman is said to have several developmental projects, such as the construction of hospitals, airports and malls, in process. However, according to the Bureau of Emigration, Oman is only taking in migrants as per the designated proportion for these developmental projects. Like Saudi Arabia, its long-term plan is to employ Omani nationals in both private and public sectors. In the foreseeable future, jobs for Pakistanis are going to reduce in Oman as well. Similarly, despite being the hub of trade routes and attracting a considerable number of Pakistanis, Bahrain has reduced the number of Pakistani migrants it employs. However, the country intends to start a few developmental projects in oil, gas and infrastructure, which may encourage migrant worker employment in the near future.

On the other hand, Kuwait showed an increase of 56 percent in labor absorption from Pakistan. The Bureau of Emigration shares that it is the semi-skilled and skilled worker categories that are the most in demand in Kuwait. Qatar, too, showed a 20 percent increase in the number of Pakistani migrants last year. Mass development is happening in Qatar as part of its Vision 2030 plan. Pakistanis employed there are mostly on the technical side of construction and development projects.

Moving forward, if Pakistan is to grow in an inclusive manner, the government must prioritize and invest equitably in human capital development, as the economic potential of the country can only be unlocked by embracing its population as its most valued asset for sustained growth. In the near future, the government must carefully manage external debt, the balance of payments and their financing requirements, while instituting macroeconomic and structural reforms to support economic stability and expansion as well as to make Pakistan more competitive and fiscally sustainable. This has become increasingly important given the increasing government and CPEC-related repayment obligations.

The writer is a Karachi based freelance columnist and is a banker by profession. He could be reached on Twitter @ReluctantAhsan

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