Painful adjustments

May 20, 2019


The writer teaches politics and sociology at Lums.
The writer teaches politics and sociology at Lums.

THAT the next three years (at least) are going to be tough for the country is a now a well-established fact. The burden of terrible macroeconomic policies in recent years and a multi-decade-long crisis of productivity is making its way for another painful period of structural-adjustment induced ‘correction’.

As with such episodes from the recent past — 1999-2001, 2008-2011 — there are those who will remain somewhat insulated from the violence of a slowing economy. But for most who subsist outside of the narrow band of the top three to five per cent of earners in this country, the coming months will be varying degrees of oppressive.

Inevitably, much of the discussion so far props up the economy as an abstract entity that requires technocratic and dispassionate analysis. What is often missed out is the lived experience of those on the re­­ceiving end of this abstraction. While even the IMF has been compelled to talk about increased social protection for the most vulnerable through existing mechanisms such as BISP, there is not much discussion on how other segments will experience (and adapt) to the coming crunch. One such demographic is young university graduates who are just about to enter, or have recently entered, the labour market.

In recent years, the subject of what young people in Pakistan are thinking and doing has gradually garnered more attention. The sheer demographic wei­­ght of our young population — 64pc under the age of 30 — and changing spatial and cultural trends thr­­ough urbanisation and increased global connectivity justifies this focus. Simply put, if one is interested in analysing the country’s future, he or she needs to look at what the bulk of the population is experiencing.

In order to analyse the country’s future, we need to look at what the bulk of its population is experiencing.

Through my occupation, I remain in contact with a small (and largely privileged) section of the young urban population. In recent weeks, their sense of aspiration mixed with anxiety at the country’s economic condition has been palpable all around, and is now particularly pronounced for those graduating in the coming months. Those who are otherwise insulated by their socioeconomic background, are burdened by lofty ambitions and heightened expectations — both of which may remain unmet in a contracting labour market.

Now take this predicament and amplify it many times over. This is what a significantly larger section of the urban youth — the middle and lower-middle class demographic — will experience. For them, aspiration and ambition that comes with higher education are not stepping stones that build on inherited privilege, they are central to their subsistence and survival.

Recent labour force data shows that the age cohort currently between 20 and 29 has higher education attainment rates (Bachelor’s and above) of around 11pc. This figure is as high as 17pc for urban areas. In raw numbers, this means there are hundreds and thousands of young people, most of whom would be the first generation of college-goers in their families, hoping to chart out a better future for themselves on the back of their degrees.

Many would have drawn on scarce resources to put themselves through college, most would have experienced dislocation in this process by moving from small towns to bigger cities where public and private universities are located. Given that the quality of education remains suspect at best, it will now leave them unequipped for a stagnant economy.

From what little data we do have, we know that well-paying white-collar work in the formal private sector is a minute section of the total labour market. Many of the jobs that do exist within this segment end up with kids who come from relatively privileged backgrounds, and increasingly with those who are armed with expensive high-school (‘O’ and ‘A’ levels) and college (Lums, IBA, Nust) credentials. The archetypical case would be the coveted management trainee positions in multinationals, banks, and big domestic conglomerates.

Take those jobs out and you are left with a labour market that provides very little in the way of security and dignity. Small and medium-sized enterprises in manufacturing have been struggling for the past decade, and are unlikely to absorb much in the next three to five years. The services sector, which has grown consistently even in years of economic slowdown, is split between a large (and mostly undocumented) retail-wholesale sector which has negligible capacity to absorb credentialled youth, and a small tertiary services sector (finance, banking, telecom) which takes in a very small number of employees each year. One also hears about the potential for freelance technology/software work being pitched as a panacea to the employment issue, but with continued problems with payment gateways and internet connectivity, this too does not seem like a workable solution in the short run.

It bears repeating that countries with growing educated and simultaneously underemployed populations have experienced a considerable degree of political turmoil. This has been the case in Iran and Egypt most recently, but the precedent has existed for much longer. What is worrying in Pakistan’s case is that a disproportionally higher number of the urban youth vested their faith in the ruling party’s political project last year.

The potential for alienation and frustration thus lies at the juncture of three things: the first of these is heightened economic expectations due to increased access to education credentials; the second is lofty aspirations of instant change and progress offered by a political party, especially one which has built its solutions on a ‘change at the top’; and the third is the harshness of a brutally competitive and stagnating economy.

The social and political outcomes of the next three to five years remain uncertain, and there is little that can be done to prepare for it at this point. What we also need to understand, however, is that the alienation and frustration that comes with economic adjustment requires careful political management. And this means going well beyond the technocratic discourse on the economy we are so accustomed to hearing.

The writer teaches politics and sociology at Lums.

Twitter: @umairjav

Published in Dawn, May 20th, 2019