The reluctance on the part of the developed countries to abide by the WTO Rules, was depriving the developing countries of the gains

By Shamim Ahmed Rizvi 

Jan 26 - Feb 01, 2004



The incidence of poverty and unemployment in Pakistan over the last 15 years has increased at a rate that is highest in South Asia. This has been revealed by the latest report on "Human Development in South Asia 2003-the Employment Challenge" released last week in Islamabad by the prestigious Mehboob-ul-Haq Human Development Centre (MHHDC).

The 7th report by the center founded by late Dr. Mehboob ul Haq, a renowned economist of World fame was released by Begum Haq, President of the Centre at a gathering of top economist, economic writers and journalists.

The report identified the basic issues that has been stagnating Pakistan performance in social, economic and political realms. The overall impact of this stagnation has been an increased penury manifesting itself in greater marginalisation of people. One of the reason for growing poverty and unemployment is said to be country's macro economic strategy that remained within the precincts of the international financial institutions under their structural adjustment programmes.

The report confirms the assertion of many who have been saying that unemployment and poverty in the country has increased to an alarming level unacceptable by economic standards. "In fact, the South Asian Workers, specially in Small Scale Industrial and Agriculture enterprises have been adversely affected by opening up of regional economics to global markets while Governments have not paid sufficient attention on the need to establish a linkage between the twin challenges of employment generation and poverty alleviation", the report points out adding" but the situation in other countries is not as bad as in Pakistan".

The following statistics, as quoted by the MHHDC report, for various South Asian countries speak for themselves. The unemployment rate in Pakistan for the 1990-2001 period was 7.8 percent, while it was 7.3 percent in India, 3.3 percent in Bangladesh, 1.1 percent in Nepal, 1.4 percent in Bhutan and two percent in Maldives. [During the last couple of years it has gone down even further.] The figures were worse when it came to women's inclusion in the work force. It stood at 29 percent in Pakistan, which was the second lowest rate for the whole of South Asia. It also had the lowest female employment rate, 14 percent, in the region. It does not take a genius to figure out, that when people have no way of earning a livelihood, poverty is going to increase, which is what has been happening in this country. There is a general sense of despair in the populace, and, for over a decade now, the press has been continuously reporting economic hardship related suicides, a high crime graph and general social unrest. That is hardly a recipe for progress and sustainable development.

According to the MHHD report, during the 1960-90 period Pakistan's economic growth rate was six percent per annum which was quite high for a low income country; but in the decade of the 1990, significant deterioration occurred, especially in the manufacturing sector. Besides, whatever growth has taken place; it is marked with "very inadequate" performance. Which is not surprising given that basic social and political indicators such as education, health, sanitation, fertility, gender equality, corruption, political insatiability and democracy, have been quite low on the priority list of our ruling elite.

Speaking on the occasion, Begum Khadija Haq, widow of late Dr. Mehboob ul Haq and herself an eminent economist, pointed out that the reluctance on the part of the developed countries to abide by the WTO Rules, was depriving the developing countries of the gains in Agriculture, Textile and Services Sectors. Her observation in this regard can be summed up as the heart of the report which unambiguously states that despite economic growth the unemployment in South Asia has not improved. Accordingly to the report which examines the economic situation in the perspective of life and living conditions of the people, the labour force has badly suffered and their miseries are rising with no immediate relief in sight. Only about 10 percent of work force is employed in the formal sector while 90 percent is let to the vagaries of the informed and disorganized sector in both urban and rural areas.

In the Asian Sub-Continent the unemployment problem is becoming deadlier with every passing day. In all the SAARC countries unemployment is showing a continuous upward trend. In Pakistan the situation has worsened during the past decade. While the market oriented reforms may have achieved some milestones on the economy but the job market has been shrinking with every passing day. According to some estimates 14/15 million willing workers in Pakistan are jobless. This forms almost 26 percent of working age population of 60 million out of 145 million-rest being old or too young. A large number of job seeker are even taking risk for dangerous ventures to the inhospitable overseas jobs. Newspaper regularly publish horrifying tale of many Pakistanis who died while crossing barbed fences or dangerous rivers and freezing seas in the faint hop of getting jobs in some European countries. Joblessness led suicides are a new phenomenon in our social culture.

Years of economic-policy making that was more responsive to external pressure them internal compulsions has created a mess that is too difficult for any government to clean easily. It was perhaps this realization that promoted Governor State Bank to call ambitions of poverty reduction in short term simply "a pipe-dream". He publically stated that poverty has been created systematically over almost two decades of misadventure and interventions and now it has taken roots. It is too difficult to get over it easily and in a short term. It will take at least one decade of prudent economic policies ensuring sustained economic growth of over 6 percent per annum to effectively control and bring down poverty level to an acceptable and reasonable level.