KARACHI, Oct 28: The State Bank of Pakistan does not expect any “significant decline” in unemployment rate in Pakistan during the recent two years 01 and 02 and points out that this rate would remain unchanged unless “the economic growth and investment scenario changes significantly”.

In its annual report for 2001-02 released on Monday, the State Bank has given unemployment rate at 7.8 per cent during the year 00. “Estimates for the unemployment rate in the current (and recent years) will not be available till the next Labour Force Survey (LFS) is conducted,” the report says but emphatically states that there would not be any significant decline.

The State Bank report has devoted 10 pages on socio-economic update which dilates in depth and detail on poverty, discuss unemployment in a few paragraphs, and has touched upon literacy, education and health situation in the country.

Quoting salient features of 1999-00 Labour Force Survey of the Federal Bureau of Statistics, the report reveals that formal industrial and services sectors are unable to create enough jobs consistent with labour supply in the country.

On unemployment, it says that despite a discernible fall in the intercensal growth rate, “population pressures continue to impact negatively on the employment”. Further, lower economic growth during last ten years also affected the employment situation.

The rate of unemployment in Pakistan is measured with the help of Labour Force Survey conducted by the Federal Bureau of Statistics in 00. According to the survey, the unemployment has shown an increase from 5.9 per cent in 1998 to 7.8 per cent in 00. This increase has been observed for both males and females. Females are more unemployed (17.3 per cent compared to 6.1 per cent unemployed males).

The unemployment rate jumps to 9 per cent treating the employed persons, who worked less than 15 hours a week, as unemployed.

The report illustrates its assertion, that unemployment is linked with investment, with a chart that shows unemployment rate in Pakistan at 3.8 per cent in 1990 when investment was 18.9 per cent of the GDP. The investment ratio increased to 19 per cent of GDP in 1991 but the unemployment rate also increased to 6.3 per cent. In 1992 when investment was 20.3 per cent of the GDP, the unemployment rate came down to 5.9 per cent and further slipped down to 4.7 per cent in 1993 when investment was 20.8 per cent of the GDP. But as investment ratio with GDP came down to 19.6 per cent in 1994, the unemployment ratio jumped to 5.4 per cent. In the year 00, the investment ratio with GDP has been calculated at 16 per cent and unemployment rate is 7.8 per cent.

The investment ratios with GDP is down to 15.9 per cent in 01 and further down to 13.9 per cent in 02. The unemployment rates have not been worked out but obviously the situation has deteriorated.

The report also explains the calculation of unemployment rate as it perceives that there is a considerable misunderstanding on this issue. The size of the labour force is assessed by estimating the Currently Active Population (labour force) that considers all persons (ten years and above) fulfilling requirement for inclusion among employed or unemployed during reference period of survey.

It quotes a few salient features of the 1999-00 LFS survey according to which the participation rate in economic activities decreased from 29.4 per cent in 1998 to 29 per cent in 00.

Share of agriculture in employment increased from 47.2 per cent in 1998 to 48.4 per cent in the year 00. But, the report says that the 00 is a a year of exceptional growth. Persons who were not able to get employment in non-agricultural sectors are accommodated by the growing agriculture sector.

In the non-agricultural sectors (industry and services) two- thirds of the employed persons (65.8 per cent) were engaged in informal sector. Informal sector in rural areas accommodated 68 per cent while urban based informal sector employed 63.8 per cent. The employment status indicates that self-employed category has increased from 41.5 per cent in 1998 to 42.2 per cent in 00. Similarly, employees category have also shown an increasing trend. In contrast, the unpaid family helpers and employees categories have apprehended a downward trend.

On literacy, the report points out a pronounced gender disparity in rural areas, which is now fast disappearing in urban areas where female literacy rate is increasing as a fast speed.

But the report has expressed concern on notable fall in the male gross enrolment ratio, which is much more pronounced in rural population. The female enrolment ratio is, however, showing an increasing trend both in the rural and urban areas.