Mission: job creation
The unemployment rate in Pakistan is 3.6% (2015)
The writer is the chair for UNCTAD — Commonwealth Entrepreneurship Project in Pakistan & CIO of Superior Group
Every year, 1.4 million young people enter the labour market in Pakistan. They hope to fulfil desires and earn a better life for their family. But that does not always translate into reality. The unemployment rate in Pakistan is 3.6% (2015). That means 3.5 million people willing to work are not able to find a job.
A report by the UNDP indicates that 1.3 million jobs have to be created annually for this gap to close.
How is that to be achieved? Let’s consider the example of Iceland. A small Nordic island, it has a total population of around 350,000. It is widely known as the “Land of Fire and Ice” and is famous for its most active volcanoes, large glaciers and northern lights. There is another aspect that makes it stand out — an almost full employment rate. Only 2.7% of Icelanders are unemployed, making its employment rate among the highest in the world. The tourism sector has been a major economic industry for the country. In 2016-2017, about 47% of all new jobs created were linked to the tourism sector. This was followed by construction, comprising 24% of total jobs. It is worth mentioning that the new jobs created in the construction sector can also be traced to the growth in the tourism industry in the form of hotels’ construction, etc.
Similar to Iceland, Thailand too has experienced growth in local sectors, including tourism and hospitality. One factor is the involvement of people in small- to medium-sized economic activity such as street vending and more informal work such as farmland or agriculture. In addition, Thailand’s tourism, like that of Iceland, contributes to this low labour market gap.
However, there is a contrast. Despite having a high employment rate, the living standard is strikingly different. Iceland is among the best places to live with a GDP per capita of $70,000. In comparison, the average income in Thailand is as low as $6,500. Therefore, even though the employment rate is a development indicator, the standard of living adds more value to the process.
Now let’s come to Pakistan. Unfortunately, it lags behind in both indicators. Learning from the case of Iceland, Pakistan needs to take the first step — the step of creating jobs. The current government plans to create 10 million jobs in the next five years. The political willingness, a core factor in policy, exists. It is the execution that needs well-thought-out, strategic translation.
For job creation to ultimately lead to economic growth, it is imperative that a cross-sector framework is followed. Pakistan needs to promote and facilitate sectors that can act as an impetus for job creation. For example, only 30% of the total female population is currently economically active. The group does have skills such as embroidery and threadwork. By only providing a conducive environment, access to microcredit and value chain facilitation, a significant proportion of the group can become economically active, and contribute to the family income and to the GDP at large. Subsequently, once empowered and equipped to scale, they will be a reason for creating more jobs. The demand, therefore, has to be preempted so that skills of the local people are timely honed, upscaling them to meet the criteria.
The government has shown political willingness to address all these aspects — create jobs, develop subsistence sectors and nurture women as active agents. Strategic implementation will take time before significant results are produced. To make this a success for Pakistan, people need to take economic responsibility. Women and the youth need to develop themselves as dynamic economic agents. It will be done when we take pride in our identity and work collectively to promote the economy of Pakistan.
Published in The Express Tribune, January 16th, 2019.
A report by the UNDP indicates that 1.3 million jobs have to be created annually for this gap to close.
How is that to be achieved? Let’s consider the example of Iceland. A small Nordic island, it has a total population of around 350,000. It is widely known as the “Land of Fire and Ice” and is famous for its most active volcanoes, large glaciers and northern lights. There is another aspect that makes it stand out — an almost full employment rate. Only 2.7% of Icelanders are unemployed, making its employment rate among the highest in the world. The tourism sector has been a major economic industry for the country. In 2016-2017, about 47% of all new jobs created were linked to the tourism sector. This was followed by construction, comprising 24% of total jobs. It is worth mentioning that the new jobs created in the construction sector can also be traced to the growth in the tourism industry in the form of hotels’ construction, etc.
Similar to Iceland, Thailand too has experienced growth in local sectors, including tourism and hospitality. One factor is the involvement of people in small- to medium-sized economic activity such as street vending and more informal work such as farmland or agriculture. In addition, Thailand’s tourism, like that of Iceland, contributes to this low labour market gap.
However, there is a contrast. Despite having a high employment rate, the living standard is strikingly different. Iceland is among the best places to live with a GDP per capita of $70,000. In comparison, the average income in Thailand is as low as $6,500. Therefore, even though the employment rate is a development indicator, the standard of living adds more value to the process.
Now let’s come to Pakistan. Unfortunately, it lags behind in both indicators. Learning from the case of Iceland, Pakistan needs to take the first step — the step of creating jobs. The current government plans to create 10 million jobs in the next five years. The political willingness, a core factor in policy, exists. It is the execution that needs well-thought-out, strategic translation.
For job creation to ultimately lead to economic growth, it is imperative that a cross-sector framework is followed. Pakistan needs to promote and facilitate sectors that can act as an impetus for job creation. For example, only 30% of the total female population is currently economically active. The group does have skills such as embroidery and threadwork. By only providing a conducive environment, access to microcredit and value chain facilitation, a significant proportion of the group can become economically active, and contribute to the family income and to the GDP at large. Subsequently, once empowered and equipped to scale, they will be a reason for creating more jobs. The demand, therefore, has to be preempted so that skills of the local people are timely honed, upscaling them to meet the criteria.
The government has shown political willingness to address all these aspects — create jobs, develop subsistence sectors and nurture women as active agents. Strategic implementation will take time before significant results are produced. To make this a success for Pakistan, people need to take economic responsibility. Women and the youth need to develop themselves as dynamic economic agents. It will be done when we take pride in our identity and work collectively to promote the economy of Pakistan.
Published in The Express Tribune, January 16th, 2019.