Reko Diq project to create 2,500 jobs during construction

Report says project needs investment equivalent to 4% of total economy.

ISLAMABAD: The capital-intensive Reko Diq mining project will create 2,500 jobs during construction and 200 afterwards, according to a World Bank report on jobs which also raised concern over extremely low women participation in the labour force and youth unemployment in the country.

The World Development Report on Jobs, issued by the Washington-based lending agency, states that capital-intensive extractive industries may represent a sizable fraction of a developing country’s economy, but not necessarily create many jobs. Such projects may generate dynamism at the local level during the construction phase, but once the mines and fields are in operation, employment goes down dramatically, it says.

According to the report, the Reko Diq project needs an investment equivalent to 4% of the total size of Pakistan’s economy.

Once dubbed a project that will change the destiny of under-developed Balochistan, the project has become controversial after the provincial government and the mining company got locked in a dispute.

The WB report, which was released in Pakistan on Friday, highlights serious issues that require immediate attention of the government.

In Pakistan, female participation rate in the labour force is only 28%, which is further low in urban areas, said Rachid Benmessaoud, WB’s chief for Pakistan.

He said this depressing trend has nothing to do with religion as these ratios are very high in Indonesia and Malaysia. He said Pakistan cannot expect sustained economic growth similar to Far East Asian countries when half of its population is not working.

According to Benmessaoud, after household duties which are cited by more than 80% Pakistani women as the number one reason for non-participation in labour force, lack of education is the second most cited reason.

The report states that skill mismatches are growing rather than shrinking. Up to one-third of the employed in countries as diverse as Brazil, Costa Rica, Pakistan, Sri Lanka and Tanzania are either under- or over-qualified for the work they do.

The report stresses the need for reviewing the policy paradigm while emphasising the importance of jobs as a driver of development instead of an off-shoot of growth.

According to the findings, more than three billion people are working in the world, but nearly half work in farming, small household enterprises, or in casual or seasonal day labour, where safety nets are modest or sometimes non-existent and earnings are often meagre.

In many developing countries, where farming and self-employment are prevalent and safety nets are modest at best, unemployment rates can be low. This is the reason for low unemployment rate of 6 to 7% in Pakistan, said Jesko Hentschel- the co-author of the report.

The report’s authors highlight that the jobs with greatest development payoffs are those that raise incomes, make cities function better, connect the economy to global markets, protect the environment and give people a stake in their societies.

The report gives a three-stage approach to help governments meet these objectives. It advocates solid fundamentals like macroeconomic stability, enabling business environment, human capital and the rule of law have to be in place. Secondly, labour policies should not become an obstacle to job creation.

Lastly, the governments should identify which jobs would do the most for development given their specific country context.

Published in The Express Tribune, November 10^th, 2012.