Nov 09 - 15, 2009

Pakistan is facing an alarming challenge of tackling the issues of economic development and poverty reduction. Issues like need for food security and the provision of employment opportunities and housing are aggravating fast in the wake of growing population.

Growth in poverty is directly linked with recession, which results into unemployed. The more severe and pervasive the recession the longer lasting is the impact it has on poverty. Development is also hurt by loss of jobs since lesser jobs means less economic activity.

There are certain inherent problems associated with employment in Pakistan such as low literacy rate and poor level of skills. Over 46 percent of the labour force has one year of education or less. The acceleration of economic growth, changes in work process, and technology over the years require higher skilled workers.

There also occurs a mismatch between demand and supply of educated and trained manpower. Women and youth are the disadvantaged segment of the society as far as employment is concerned. Female literacy rate of the population stands at 43.6 percent, which is 68.2 percent in males. Youth on the other hand find the markets saturated and opportunity is the problem again. Therefore, the educational enrollment, technical and vocational training capacity in the country and competitiveness has been the objective of government policies and programmes.

Education and skills development are crucial to improve and sustain productivity and income-earning opportunities at work. It also serves to enhance the mobility of people in the labour market and offers the potential for increased career choices.

According to the Labour Force Survey 2007-08, with the population of 159.57 million, Pakistan has a labour force of 51.78 million people which is 1.45 million more than the previous year. The female labour force has increased; they are 10.96 million that is 0.1 million more female workers than the previous year. The total number of people employed was 49.09 million; 1.44 million more than the previous year. Nearly 44.6 percent of the labour force is employed in agriculture which has increased from the previous year. However, manufacturing, community, social and personal services indicate fall in activity level. The literacy rate is 56.2 percent and is 1.2 percentage points higher than the last year. The rural literacy rate has increased by 1.3 percentage point and is presently 47.5 percent. The urban literacy rate has increased by 1.2 percent and currently stands at 72.3 percent. The female participation rate in labour force has increased more than male participation rate.

Emphasis on technical and vocational education and flexible training is important for enhancing the skills of the labour force. Accordingly, the last government established the National Vocational and Technical Education commission (NAVTEC) in 2006 with a view to strengthen, standardize and streamline vocational and technical education.

In August 2007, the government released Vision 2030, a comprehensive strategy designed to create "a developed, industrialized, just and prosperous Pakistan through rapid and sustainable development in resource constrained economy by developing knowledge inputs".

Amongst other salient features, major challenges identified were to improve the quality and expand the delivery of education, and to place employment and employability at the centre of all economic and social policies.

The Vision 2030 document recognizes the need to invest in education and training as these are the foundations for a skilled and productive labour force. Furthermore, the Vision points out that labour reforms policies should address productivity and industrial relations issues.

This is right time to bring a change in our thinking and let the service sector lead the economy. The service sector has played vital role in shaping up the world economies, resultantly creating countless jobs everywhere. In Pakistan, however, the manufacturing sector is yet playing the leading role and the government policies are focused on the growth of this sector. There is no doubt that Pakistan needs a flourishing manufacturing sector but it does not mean that it should ignore the billions dollars service sector altogether.

Pakistan urgently needs a change in its priorities from manufacturing sector to service sector. Information technology is one area, possessing enormous potential to accommodate emerging number of young graduates.

A change in our mindset may bring an IT revolution in Pakistan, as we have seen in different parts of the world including our neighbour India where this sector has progressed by leaps and bounds, developing a new middle class. The animation industry, for example, has become hotbed of jobs. India's Nasscom's projections suggest that employment in this sector will double from 14,700 now to 29,500 by 2012. Similarly, the gaming industry in India too will create a huge number of jobs in the next three years, with the projections being 10,700 jobs by 2012 from a meager 2,300 people now.

The Indian animation industry has moved from a pure offshore model to co-production model. While the domestic sector contributed with manpower and infrastructure, international producers helped with marketing and distribution.

The IT sector has registered a robust growth world over during the last one decade.

Since the IT sector is equally important in every nook and corner of the world, therefore, the technology technicians are highly in demand across the globe. These technology technicians, ranging from the software developers, hardware engineers, call centre operators and cable handlers etc., are considered to be the backbone of every modern economy.

It is interesting to note that the IT sector has already replaced the manufacturing sector in the West. The world auto industry has altogether changed with the development in the IT sector. Today's cars are more automated and smarter than the previous ones, as the usage of technology in this sector has registered phenomenal growth now comparing with the eras of 60s and 70s.

The IT industry is Pakistan has also covered a long distance over the last two decades. It employs over half a million youngsters in different capacities right from software developers to cable layers. Further, it has the potential to accommodate another half a million youngsters immediately with the serious efforts of the government policymakers.

(The writer is Chairman & CEO NetSol Technologies Ltd. and Honorary Consul of Australia for the province of Punjab, Pakistan)