Pakistan has traditionally touted its cheap labour rates to attract foreign investment. In fact, at a recent fashion convention in Lahore, the nation’s entrepreneurs and government officials tried to encourage global textile companies to take advantage of the cheap labour available in the country. But is that the way to go? Are the low-paying jobs produced by such investment the sort of jobs we really want for our people? And can such inexpensive labour help provide long-term employment for the nation?
A look at the global employment picture suggests negative answers to these questions. Firstly, investment based on cheap labour rates cannot be relied upon as a long-term means of creating employment. Twenty years ago, China had been portrayed as an investment magnet due to its low labour prices, but it was soon undercut by countries such as Bangladesh, Indonesia and Vietnam which offered even cheaper labour. And there are other nations that currently offer rates as low, if not lower, than these three. So employment based on inexpensive labour is hardly guaranteed to last. Secondly, such employment simply perpetuates the problem of low salaries and does nothing to raise a country’s living standards.
The solution to the problem is for Pakistan to focus on workers’ training and skills enhancement to bring them on a par with international standards. The low level of technology in Pakistan’s industry today offers little for investors and makes it easy for them to move on to one of the many countries now offering even lower labour rates. It is also essential for our companies, whether they be in textiles or any other industry, to plan for the future. The government must also facilitate domestic industry by taking steps such as establishing connections abroad, introducing exchange programmes between universities, and extending financial support. These measures are vital to generate the kinds of jobs necessary to boost industry and our standard of living.
Published in The Express Tribune, November 26th, 2019.
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