Job creation biggest challenge after health crisis

Finance minister says economy has to grow by 7-8% per year to accommodate new job-seekers

Salman Siddiqui June 11, 2021


The Pakistan Tehreek-e-Insaf (PTI) government, which is making all-out efforts to save lives and livelihoods during the Covid-19 pandemic, has said that job protection and creation of new employment opportunities has become the second largest challenge after the health crisis.

“Pakistan’s economy has to grow by 7-8% per annum to provide job opportunities to almost 2 million new entrants into the labour market every year,” Finance Minister Shaukat Tarin said after launching the Economic Survey 2020-21 on Thursday.

Besides, there are 2.5 million people looking for re-employment, who had lost their jobs due to layoffs in the wake of closure of different industries following the imposition of a strict nationwide lockdown last year, he said.

Pakistan has a massive proportion of young population that has the potential to turn the economy around. However, a large number of the youth lacks quality education and skills required for mainstream jobs.

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The demand for well-educated and skilled labour is on the rise in the wake of deployment of technology in almost all sectors of the economy.

Recently, the government has revised its projection for economic growth to nearly 4% against the target of 2.1% for the current fiscal year ending June 30.

Since the country recorded a negative economic growth of 0.4% in the previous fiscal year, a large number of new entrants into the labour market failed to secure jobs in FY21 in addition to the millions of people who were rendered jobless during the peak of the pandemic in FY20.

Citing figures, Tarin pointed out that around 55.7 million people were working before the imposition of lockdown in March 2020 and this figure fell to 35 million when constraints on movement were at their peak during April-May 2020 – a fall of 20.7 million or 37%.

“Out of the 20.7 million people who lost their jobs or could not work during April-July 2020, 18.4 million started working again during August-November 2020, depicting a V-shaped recovery,” the Economic Survey 2020-21 said.

The number of employed people before the pandemic struck Pakistan, at 55.7 million, was already low compared to around 60-65 million people in prior years.

“During the Covid-19 pandemic, protection and creation of jobs is the second biggest challenge after the health crisis in Pakistan,” the survey stated.

“Owing to population growth, Pakistan is facing difficulties in optimal social spending ie healthcare, education, housing and employment,” it said. “In such a scenario, the advent and spread of Covid-19 has further aggravated the situation.”

“Pakistan, being the fifth most populous country and having the ninth largest labour force in the world, adds a large number of people to its jobs market every year,” the survey said.

Pakistan’s total population is estimated at 215.25 million with a growth rate of 1.8% in 2020.

The country has an extraordinary asset in the shape of youth bulge, which means that the largest segment of the population comprises young people.

“This youth bulge can translate into economic gains only if the youth has the skills that are consistent with the requirements of a modern economy,” the survey said.

For low and middle-income economies, the lack of professional and management skills in the youth may lead to unemployment or resistance to acquire quality jobs with a decent work environment.

“The issue is becoming more serious with rapidly changing economies that requires more innovative skills. Workers need to be updated, flexible and adaptive in order to exploit market opportunities both at national and international levels,” the survey said.

The pandemic adversely impacted employment and labour productivity by impeding growth in various economic sectors. The State Bank of Pakistan has taken different measures to counter the effects of Covid-19 such as extending support to firms to pay wages to their employees (Rozgar Scheme) amid the lockdown to prevent layoffs.

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Furthermore, the revival of construction sector during the pandemic is one of the major initiatives of the government aimed at employment generation in the country.

The government has started different programmes for improving employment opportunities for the youth such as Prime Minister’s Youth Entrepreneurship Scheme and Prime Minister’s Hunermand Programme - Skills for All.

The government has taken various steps to revive the economy, accelerate the pace of economic growth and create employment.

Major programmes include the construction package, textile industry package, Bundal Island project, Export Processing Zones, Ravi Riverfront Urban Development Programme, IT parks package and SBP Rozgar Scheme.

The programmes helped in generating hundreds of thousands of jobs, according to the survey.

Published in The Express Tribune, June 11h, 2021.

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