Unemployment: When will growing joblessness be curtailed?
We need to go back to basics and utilise resources efficiently to bring about change.
KARACHI:
One of the economic problems that Pakistan shares with the world – although in a slightly more exacerbated form – is unemployment. As the economy slowly implodes due to numerous crises following mismanaged economic programs, slogans raised by political parties promising ‘roti, kapra, makaan’ (food, housing and shelter) have yet to be realised for the masses.
The manufacturing sector is slowing vanishing in Pakistan – which is a huge problem for a country struggling to finance its needs. Our unhealthy reliance on imports of all kinds of goods – be they primary, secondary or tertiary – has slowly eroded the role of industry and manufacturing as the powerhouses of our economy. On top of spending our income abroad, the government continues to subsidise all sorts of goods: it has spent up to Rs1.2 trillion over the past four years in discounting goods. Inflation has spiralled out of hand, hovering relentlessly in the double digits as our money loses value. The fiscal deficit, compounded by problems arising out of the power crisis, is only expected to worsen. Economically, all is not well for the average Pakistani.
In such an unstable economic environment, the unemployed bear the brunt of financial pressure. With the lack of investment in new business, our productive capacity is shrinking as our power resources dwindle, swelling the ranks of the unemployed.
The solution seems simple: Pakistan needs to export. Unless we produce, we won’t be able to sell. If we don’t sell, we can’t earn; and if we can’t earn, then we can’t produce or employ. Pakistan seems to be caught in a vicious cycle in this regard. The power crisis has spelt the death for production, causing a fundamental disequilibrium in our economic system. We are increasingly moving towards greater indebtedness simply because we cannot fulfil our own demands.
The over-emphasis on the services sector for contribution to GDP – and the consequent under-emphasis on the manufacturing and agricultural sectors – is highly problematic as far as unemployment is concerned. Pakistan has an abundant supply of cheap labour, and yet this is overlooked in favour of the services sector, which relies on fewer people to generate revenue than either agriculture or industrial manufacturing. Multinational companies have been quick to identify our oversight, and have exploited domestic labour to create surplus which they then repatriate abroad – to the loss of Pakistan as a nation, since their revenue gained is our revenue lost. This is not to criticise multinational companies that, at least economically, do the right thing in utilising available resources most efficiently; the problem is that Pakistani companies need to be made able to do the same and create opportunities for the Pakistani people.
In the agricultural sector, our farmers are not given control over the land they till. After paying over hefty dues to their landlords, they have little left to sustain themselves. There is, therefore, very little incentive for persons to stay in this sector. This contributes to unemployment in as much as it pushes away labour from a sector simply because of the attendant malnutrition, disease and financial insecurity it spells for those employed in it. The system is also tampered in another way – those trapped in it are deprived of basic education and rights in order for their exploitation to continue unhindered. In the absence of corrective measures undertaken by the government, it is no wonder, then, that more and more people migrate to cities rather than stay and work in the agricultural sector.
It is time for Pakistan to move beyond political point scoring and appeasement and pay some attention to the economy. I have traced some of the roots of unemployment; now is the time to work on a resolution to the problem. Good governance and fair policies can better the situation. Our leaders should start asking themselves: how much more can this nation take?
THE WRITER IS A BANKER AND BROADCASTER FOR FM91
Published in The Express Tribune, June 11th, 2012.
One of the economic problems that Pakistan shares with the world – although in a slightly more exacerbated form – is unemployment. As the economy slowly implodes due to numerous crises following mismanaged economic programs, slogans raised by political parties promising ‘roti, kapra, makaan’ (food, housing and shelter) have yet to be realised for the masses.
The manufacturing sector is slowing vanishing in Pakistan – which is a huge problem for a country struggling to finance its needs. Our unhealthy reliance on imports of all kinds of goods – be they primary, secondary or tertiary – has slowly eroded the role of industry and manufacturing as the powerhouses of our economy. On top of spending our income abroad, the government continues to subsidise all sorts of goods: it has spent up to Rs1.2 trillion over the past four years in discounting goods. Inflation has spiralled out of hand, hovering relentlessly in the double digits as our money loses value. The fiscal deficit, compounded by problems arising out of the power crisis, is only expected to worsen. Economically, all is not well for the average Pakistani.
In such an unstable economic environment, the unemployed bear the brunt of financial pressure. With the lack of investment in new business, our productive capacity is shrinking as our power resources dwindle, swelling the ranks of the unemployed.
The solution seems simple: Pakistan needs to export. Unless we produce, we won’t be able to sell. If we don’t sell, we can’t earn; and if we can’t earn, then we can’t produce or employ. Pakistan seems to be caught in a vicious cycle in this regard. The power crisis has spelt the death for production, causing a fundamental disequilibrium in our economic system. We are increasingly moving towards greater indebtedness simply because we cannot fulfil our own demands.
The over-emphasis on the services sector for contribution to GDP – and the consequent under-emphasis on the manufacturing and agricultural sectors – is highly problematic as far as unemployment is concerned. Pakistan has an abundant supply of cheap labour, and yet this is overlooked in favour of the services sector, which relies on fewer people to generate revenue than either agriculture or industrial manufacturing. Multinational companies have been quick to identify our oversight, and have exploited domestic labour to create surplus which they then repatriate abroad – to the loss of Pakistan as a nation, since their revenue gained is our revenue lost. This is not to criticise multinational companies that, at least economically, do the right thing in utilising available resources most efficiently; the problem is that Pakistani companies need to be made able to do the same and create opportunities for the Pakistani people.
In the agricultural sector, our farmers are not given control over the land they till. After paying over hefty dues to their landlords, they have little left to sustain themselves. There is, therefore, very little incentive for persons to stay in this sector. This contributes to unemployment in as much as it pushes away labour from a sector simply because of the attendant malnutrition, disease and financial insecurity it spells for those employed in it. The system is also tampered in another way – those trapped in it are deprived of basic education and rights in order for their exploitation to continue unhindered. In the absence of corrective measures undertaken by the government, it is no wonder, then, that more and more people migrate to cities rather than stay and work in the agricultural sector.
It is time for Pakistan to move beyond political point scoring and appeasement and pay some attention to the economy. I have traced some of the roots of unemployment; now is the time to work on a resolution to the problem. Good governance and fair policies can better the situation. Our leaders should start asking themselves: how much more can this nation take?
THE WRITER IS A BANKER AND BROADCASTER FOR FM91
Published in The Express Tribune, June 11th, 2012.