DEMOGRAPHICALLY, Pakistan continues to exist among the disadvantaged nations symbolized for fast growing population with low literacy rate and growing number of new entrants to labour force outnumbering employment opportunities.

The bleak job picture, in view of growing poverty, is one of the most urgent and destabilizing problems. Eradicating unemployment is a major agenda of the present government for bringing in socio-economic reforms. The focus is on enhancing not only GDP growth rate, but also creating employment.

The government’s challenge to create more job opportunities has intensified because of growing participation of women in labour force. The World Bank report says that during the decade of nineties female participation in job market increased by four percentage point, which is mainly due to growing poverty in major urban pockets thus forcing women to work to supplement family income.

Secondly, change in social attitude leading to greater number of women acquiring education has also augmented women participation in all economic activities.

The report also reveals that rising unemployment in low-income South East Asian developing countries, including Pakistan has particularly hit new entrants in job markets, particularly those who have just completed secondary education or hold university degree in the discipline other than technical and other specialized fields.

They mostly wait for employment in public sector entities and their non-exposure to technical/vocational / specialized education prevents them from getting employment in private sector.

The number of those completing school level education in age group of 15 years or above has got doubled during the period from 1975 to 2001, yet the overall return on investment in education has been low, which reflects ineffectiveness of education system to meet requirement of market economy.

Despite structural reforms, restructuring and privatization initiatives relating to quite a number of state-owned units, public sector continues to offer almost 20 per cent of the total job opportunities in formal sector. A sizable chunk of GDP is accounted for wage bill of public sector employees, thus bringing tremendous burden on country’s resources.

Almost all the past and present governments since mid-nineties have been striving to improve GDP growth rate with focus on enhancing employment level. The structural reforms have improved the potential growth. The country is on the path of achieving macro-economic stability and economic indicators like GDP growth rate, per capita income, forex reserves and volume of exports continue to show sustained growth rate.

Privatization of the public sector entities was intended to improve operational efficiency but create more job opportunities for the faster growth of these organizations.

The restructuring of these private entities has resulted in laying off large numbers of employees, aggravating the unemployment problem. The government is opening up the economy to private activity to attract investment from indigenous and foreign sources. This requires speedy development of infrastructure needed for industrial, agricultural and service sector and most importantly, improvement in law and order situation.

A sizeable allocation of Rs272 billion for public sector development programme for the current year with major focus on infrastructure development will create job opportunities, both for skilled and unskilled labour. Besides that, almost 50 per cent increase in development budget for education, targeting higher and technical education and increased allocations for health sector would ensure skilled and enlightened work force for times to come, as literate and healthy workers are required to raise productivity and for realignment of labour.

For sustainable economic growth culminating into optimum employment level in developing economies, foreign direct investment is also required. To attract investment from both— indigenous and foreign sources— labour laws are to be re-examined. To protect the interest of labour, labour laws are to be reformed, yet at the same time it is to be ensured that labour laws should not be a constraint on enterprises.

When business enterprises undertake structural adjustments to match changing market conditions or their operations are exposed to various internal and external shocks, their efforts to rectify situation are hampered by rigidity of various labour laws. It is essential that labour reforms/laws envisaged must have due emphasis on social consideration, especially by making provision for social safety nets for workers effected through lay off as a consequence of structural adjustments in an organization.

The new labour laws now in process at the Ministry of Law (before being sent to parliament for approval) focus on protecting workers’ rights and for providing them opportunities for updating their skills, by allowing longer working hours to them and exigency of service backed by substantial increase in overtime rates and provision for transport for female workers, if they are made to work till late hours.

For boosting industrialization, government’s initiatives to develop infrastructure, particularly making available utilities at low cost and substantial cut in import duty and a liberal credit policy for private sector is likely to boost employment level.

Over time, it has been learnt that large-scale industries alone cannot create required number of job opportunities. Hence the development of SMEs and agro-based industries, being labour-intensive should be speeded up. In almost all the developing economies of South East Asia, almost 70 per cent of employment is being offered by small and medium size businesses and these in turn, have supplemented the production process of large-scale industries through vending/subcontracting services.

Hence the success of these nations is largely indebted to their SME sector. While viewing the role of SMEs in global scenario, 80 per cent of the industrial jobs have been contributed by SMEs and have a share of 30 per cent in world GDP.

In Pakistan, almost 57 per cent of the total labour force is already absorbed by the SME sector. Already steps are underway to give boost to this sector which include liberal credit facilities and fiscal incentives etc., However, necessary infrastructure like utility services, easy linkage to market through suitable transport arrangements are immediate needs for facilitating speedy development of the sector. Non-farming businesses and agro-based SMEs need to be promoted in rural areas so as to absorb maximum number of idle labour force including women.

Greater emphasis is needed on development of housing industry also as it creates jobs for skilled, unskilled and professionals like architects, civil engineers, electrical engineers and interior decorators etc. Liberal housing finance provided by banks has no doubt stimulated activity in housing sector, but abrupt rise in property prices due to speculative trading growth process has slackened. In this regard, government must come forward to develop housing projects for low income people.

Social sector development initiatives, which facilitate linkage of economic development to human prosperity, need to be focused in all development plans. Investment in human capital through quality education in all disciplines and better health environments is a must for energetic and highly skilled work force.

For the development of marketable skills among the youth, it is essential that secondary school students with average level performance must be motivated to take up courses in technical skills. Secondly, education of university level in all disciplines must focus on research, so that new technologies be developed for speedy development in all sectors of the economy and the workforce and professionals to compete both in national and international job markets.

Employment in public sector entities must be purely on merit rather than based on job quotas. This would not only improve operational efficiency of public sector entities, but ensure employment for capable hands.

Further, arrangements should be in place to provide career counselling and guidance to students of secondary education level through experts in different lines of businesses, to enable students to choose line of higher education according to their aptitude and for a profession which commands a sustained job market.

In this regard, the government’s initiative to set up a national training and vocational education authority (NTVEA) for laying skill standard of workers for different lines of businesses and to prepare syllabus for skill development courses will go a long way in improving effectiveness of skill development and training institutions.