HUMAN CAPITAL DEVELOPMENT IN PAKISTAN

S.KAMAL HAYDER KAZMI,
Research Analyst
, PAGE
Mar 23 - 29, 2009

Pakistan's economic growth trends have been paradoxical. One of the reasons for this is that the periods of high growth have not resulted in the improvement of human development indicators.

Today, Pakistan comprises approximately 170 million people and in terms of population, it is the seventh largest country in the world. The United Nation projects that by 2050, Pakistan's population is expected to double to about 350 million making it the world's third or fourth most populous country.

Currently, the country is experiencing a demographic transition also known as demographic dividend that is an increase in the population of the working age group. According to an estimate, by 2050, the number of potential workforce will be approximately 221 million and Pakistan will lose opportunity to take advantage of this demographic dividend if it is unable to invest in the human capital and provide employment to this emerging workforce.

DISTRIBUTION OF THE LABOUR FORCE WITH FORMAL/VOCATIONAL TRAINING IN PAK (%)
TYPE OF TRAINING 2005-06
Draftsman 2.2
Civil Engineering Technology 3
Electrical Engineering Technology 2.6
Mechanical Engineering Technology 3
Auto & Farm Machinery 0.8
Textile Technology 1.1
Refrigeration and Air Conditioning 2.4
Diploma in Radio and T.V. 0.6
Electrician 9
Typing and Shorthand Course 1.9
Welding Course 1.6
Embroidery and Knitting Course 4.8
Plumbing and Pipe Fitting 0.7
Auto Mechanical Course 2.1
Driving Course 12.4
Computer Course 21
Others 12.9
Various Sources

CHALLENGES FOR PAKISTAN

Today, Pakistan faces the daunting challenge of overcoming its unequal growth. Administratively, Pakistan is divided into 4 provinces, which consist of 26 divisions comprising 113 districts, 420 sub-districts, and 48,344 villages. With high concentration of economic activities and large workforce, Punjab has emerged as most privileged province of Pakistan in terms of public investments in human capital.

With increasing agglomeration of manufacturing and research and development activities in the 'core' areas of Punjab and some parts of Sindh, it can be expected that localized human capital investments can lead to geographical stratification of the population and result in widening the existing regional human development disparities-human capital inequalities being one of them. Pakistan's potential labour force has unequal opportunities of human capital development and employment.

SKILL DEVELOPMENT PROGRAMS

Pakistan faces enormous challenges in developing the knowledge and skills of its people through advanced education and training. Human resource policies of the government should be in line with requirements of the economy and economic programmes, including literacy programmes and skills development programmes. To improve the capacity of the people to attain decent job, which covers six dimensions opportunities for work, work in conditions of freedom, productive work, equity in work, security at work, and dignity at work, the development of skills through appropriate education and training is a fundamental requirement.

MONTH-WISE WORKERS REMITTANCES (mn US$)
MONTHLY CASH INFLOW FY09 FY08

FY09
% CHANGE

July 627.21 495.69 26.53
Aug 592.3 489.51 21
Sep 660.35 516.05 27.96
Oct 466.13 580.24 -19.67
Nov 620.52 505.58 22.73
Dec 673.5 479.26 40.53
Jan 637.3 557.07 14.4
Feb 641.32 502.76 27.56
July-Feb 4,918.63 4,126.16 19.21
Monthly average for period July-Feb 614.83 515.77 19.21
Source : SBP
Cash Inflow (including FEBCs & FCBCs)

GLOBAL COMPETITIVE ANALYSIS

Out of 131 countries analyzed in 2007 for global competitive analysis, Pakistan ranked at number 92 and got third position in South Asia. In terms of education, training, and the labour market, Pakistan fared poor when compared to the rest of the world, but concerning business efficiency and innovation, Pakistan scored fairly well with ranks of 79 and 69 respectively. In addition, the lack of basic education in the workforce restrains companies from growing. In this category, Pakistan holds 115th rank, the lowest in the region.

It is important that the labour force be able to adapt to changing environments in a globalized economy. Pakistan was rated number 116 in this area. Workers are less able to adapt to new production methods and technology. The ability of business leaders to run an efficient operation has a major impact on productivity. Management skills are required for a high score on the eighth pillar, business sophistication.

GLOBAL COMPETITIVE INDEX RANKINGS - SOUTH ASIA 2007-08
COUNTRIES GCI 2007- 2008
Bangladesh 107
India 48
Nepal 114
Pakistan 92
Sri Lanka 70
Various Sources

OVERVIEW

Human capital is a multifaceted concept development, which comprises various types of investments in people. Pakistan is facing political insecurities. The country has become unattractive for its existing human capital supplies. In Pakistan, the Employment and labour policies should be to promote opportunities for women and men to obtain decent and productive jobs under above-mentioned six dimensions. Therefore, the government should organize the training and skills development programmes for workforce management to attain the sustainable economic growth.