ISLAMABAD: Pakistan’s economy has started undergoing certain structural changes as employment is shifting from agriculture to manufacturing and services sector, according to a document published by the Planning Commission.

Figures of employment by sector reveal that the share of agriculture, which was 48.42 per cent in 1999-2000, has decreased to 42.27pc in 2014-15. The share of manufacturing increased from 11.48pc to 15.33pc and the services from 34.25pc to 34.93pc during the same period.

This indicates that most of the left out share of 6.15pc points by agriculture was taken by manufacturing (3.94pc). The prospects of finding decent and productive employment are much higher in manufacturing and services as compared to agriculture.

Of the total employed workforce, 42.27pc are engaged in agriculture sector while 57.73pc are employed in non-agriculture sector. Agriculture remains the largest absorber of labour and is known for informal employment. Out of the total employed in non-agriculture sector, formal sector employs only 27.42pc while the remaining 72.58pc are employed in the formal sector in 2014-15.

An official document states that it is an established fact that investment in manufacturing is the best route to development and a necessary pre-condition for sustained economic development. China is one of the best examples which brought 680 million out of poverty between 1992 and 2011 by a single-minded focus on manufacturing growth.

On the other hand, workforce in the country is estimated to grow by about 2pc during the next fiscal year, indicating that 1.26m additional workforce will join the labour markets by 2017, according to official estimates.

The GDP growth target for 2016-17 is 5.7pc while the prevailing employment elasticity is 0.46; therefore, it is expected that the given GDP growth will not only absorb the growing labour force, but also clear some portion of the backlog.

Under the CPEC, an inflow of financial resources of around $46bn is expected which comes to about Rs800bn per annum or 2.8pc of the current GDP every year. This investment will spur economic activity and create around 2 million direct and indirect new jobs, the document estimates.

Policy initiatives, like enhancement of development programmes, increased focus on technical training and skills development and generation of productive employment opportunities through the China-Pakistan Economic Corridor (CPEC) and energy projects will ensure smooth functioning of labour market in 2016-17.

Pakistan has been able to provide employment to 59.31m people out of the total workforce of 63.06m which implies 3.75m unemployed and unemployment rate of 5.94pc for the fiscal year 2015-16.

According to the document, the unemployment rate was persistently decreasing for the last three years from 6.24pc in 2012-13 to 5.96pc in 2013-14 and further to 5.94pc in 2014-15. This is partially contributed by declining participation rate which is at the lowest ebb in recent history and also evident from the addition of only 1.3m additional workers to the labour market.

Female labour force is estimated at 15.14m, out of which 13.78m are employed while remaining 1.36m are unemployed, implying that 8.97pc unemployment rate which is quite high as compared to national average of 5.94pc.

Female unemployment rate has increased from 8.74pc in 2013-14 to 8.97pc in 2014-15. In the male-dominated labour force, women account for only 24pc of the workforce. However, it is encouraging that women participation rate has increased from 9.29pc in 1999-2000 to 15.81pc in 2014-15.

Published in Dawn, June 19th, 2016