Jan 19 - 25, 2004



The latest labour force survey of the Federal Bureau of Statistics reveals that the unemployment situation in the country is getting from bad to worse. The unemployment rate is now a massive 7.82 per cent up from 5.89 per cent in 1998. In other words, more than 3.34 million people are now estimated to be unemployed compared to 3.27 million last year. According to the survey the total labour force in the country is estimated at 42.75 million out of which 29.69 million or 69.45 per cent is in the rural areas and the rest 13.06 million or 30.55 per cent in urban areas.

The figures reveal that unemployment is now a major economic and social problem faced by the country and the difficult question of ensuring productive employment of the ever expanding work force due to population growth has emerged as a major challenge facing the entire nation. The issue has also acquired greater urgency not only for sustaining long-term growth but also for eliminating poverty. According to the statistics more people (39.41 million) are employed today than in 2002 (38.57 million), showing an increase in the employment rate from 2.1 per cent last year to 2.2 per cent in the current year. This shows that the population in the country is growing at a much faster rate than the present rate of increase in employment generation. The country has therefore, to redouble its efforts for population control on the one hand an accelerate the creation of job opportunities on the other.

One of the key areas where successive government in the country could not deliver since independence is unemployment. There had been always tall claims made by the policymakers to address this baffling problem but the fact remained that not much success was achieved in providing jobs to thousands of young educated unemployed people. The desperate situation of the unemployed youngsters therefore, rightly begs the question; what have the governments in the past and present been doing to improve the employment opportunities for the country's increasingly growing work force? Has increasing employment opportunities ever been made a major objective of economic planning in this surplus labour country?

Since the public sector had been squeezed and the private sector remained shy to invest, the government had lately been relying on Khoshhali Bank and Micro Credit Bank of Aga Khan to extend small loans to the people including the unemployed educated youth. But most micro finance programmes were unable to attain sustainability because of the sufficiently high interest rates. There had been various suggestions that this interest rate should be reduced but the official of the Khoshhali Bank and Micro Credit maintained that since they did not seek collateral, they were constrained to charge higher interest rate, ranging from 15 to 20 per cent. Another organization Pakistan Poverty Alleviation Fund (PPAF) which was created by government in the private sector, has also been involved in poverty reduction extending loans through some credible non-governmental organizations (NGO's). It was in fact the first private sector organization which was offered $ 100 million by the World Bank and was promised more funds by the Asian Development Bank (ADB) and the International Fund for Agricultural Development (IFAD). However, it has been observed that micro credit in the country is still unable to extend coverage to the vast majority of the poor.

It has been also observed that population planning has never been a matter of serious concern in our scheme of things. What with misplaced religious and social inhibitions, policy planers have tinkered with the problem rather coming to grips with it all these years. That also explains why, despite having experienced growth rates of between five to six per cent over extended periods of time in the 1960's and 1980's we have continued to remain stuck with abysmally low social and physical indicators. In times of both high and low economic growths we have done very little in practical terms to keep the population growth in check. It is now time to move out of this self-induced myopia and put as much emphasis on population control as on economic growth. In the last three years, when the economic growth rate remained very depressed, unemployment was bound to increase, as it did. In fact, according to one estimate, if under employment is also taken into consideration, the rate of joblessness in the society goes upto about ten per cent which for any society is a signal for disaster. On the advice of the multilateral donors, the government has been keeping a tight lid on public sector spending which in most developing economics serves as an engine of growth. It is only in developed economies that the private sector leads the way and that too because over the years it has learnt to take risks under well known and tested fiscal and momentary conditions.



In developing economies, especially those, which have been tied to central planning for decades and where the private sector had trudged on the crutches of protection, concessions and incentives for long, the nostrum of market economy cannot suddenly come into play and turn the private sector into a mighty engine of growth. This, just because the donor countries and agencies have so decreed. It would take time for the private sector first to unlearn what it had learnt in a protective environment over so many decades and acquire the dynamism, enterprise, efficiency and risk-taking traits to be able to hold its own in a highly competitive global market. And while the country's private sector goes through this exercise, the economy cannot be kept at a standstill. It has to grow, and grow it will if the public sector spending is maintained at an appropriate level in order to achieve a certain growth rate and also to reduce the twin problem of poverty and unemployment.

It is therefore, hoped that the present government would take up the task of dealing with one of most taxing and worrisome problems confronting the country's populace the rampant unemployment and provide job opportunities for those who are swelling the ranks of the unemployed in the country. The situation is so critical that being unable to provide for themselves and their dependents in these days of rising poverty and inflation, the number of people resorting to suicide due to their unbearable difficulties is on the rise. To arrest this distressing trend and to ensure a reasonable and swift source of livelihood to the masses, it is incumbent that the government moves away from the tried and failed (paper) policy of launching long-term projects and instead devise policies of encouraging small business, industries and thereby give an impetus to small scale investment and opening new avenues for employment. These short-term projects should focus on utilizing the available resources of the country, kick forward the receding economic conditions and thaw out the cold wave that has frozen the country's investment environment.

A well thought out strategy for employment generation and manpower development should also have the following main components:

a) Acceleration of output growth and introduction of structural elements with a view to improving the over-all economic environment for efficient labour utilization.
b) Employment generation in rural areas and small towns through development of physical and social infrastructure and rural industries as the leading sector to attack under-unemployment and low incomes and reduce rural urban migration.
c) Accelerating development increasing productivity in small scale and informal sector enterprises.
d) Special measures to reduce unemployment among the educated youth, not through unproductive public sector employment, but through meeting the real needs of the economy especially in the social and private sector.
e) Increased opportunities for self-employment through better access to credit facilities.
f) Development of a well skilled labour force to help achieve significant gains in productivity and efficiency primarily through efforts of the private sector.
g) Full support to Pakistanis seeking employment opportunities abroad and assistance in productive re-absorption of returned migrants.
h) A comprehensive programme to meet high-level manpower needs in science and technology.
i) A concerted effort to radically improve the participation of females in income generating economic activities.
j) Strengthening the institutional machinery for effective monitoring and implementation of policies for human resources development.