KARACHI, Sept 25: The World Bank has questioned the credibility of the official unemployment rate of 5.9 per cent in 2003-04 in Sindh and has attributed this understatement to the way “the unemployment status is defined in official statistics”.

It says that a part of it is due to measurement problems and has asserted that there was “widespread disguised unemployment”.

In its draft report, now awaiting official comments from the Sindh government, the World Bank estimates unemployment rising in the province at the rate of 10.3 per cent a year and has projected 1.6 million persons unemployed in next five or six years.

The World Bank’s estimates of unemployment in Sindh comes in wake of the federal government’s claim of creating new countrywide employment opportunities of more than five million people in one quarter only.

But federal government’s estimate for increase in employment opportunities and about 10 per cent reduction in poverty rate in two years conspicuously excludes provincial census of the poor and the unemployed.

The Social Policy and Development Centre (SPDC) in one of its well-researched studies has established that the rural Sindh and Balochistan are the most poor areas of the country. Federal government policies are being blamed for keeping the rural population of the two provinces deprived and unemployed.

“Sindh has historically had the lowest unemployment rate in the country,” the report states to point out “but this trend is undergoing change”. It refers to the last two labour force surveys which showed that unemployment rate has increased at a faster rate in the province than rest of the country. The report counts 610,000 unemployed persons in Sindh in 2003-04 and given the dynamics of demographics, education and migration “there is likely to be a net annual addition of around 100,000 to 250,000 persons in the unemployed pool”.

It projects the number of unemployed persons going to 1.6 million by 2013-14.

The World Bank points towards three factors in play that will considerably expand Sindh’s labour force in the coming years. First Sindh’s population grew rapidly during late 1970s and the 1980s and the generation that was born then has entered the job market or will do so in next few years. That factor alone is expected to add 380,000 people to the job each year for next 10 years.

Second, increased enrolment in primary and secondary schools and average rise in literacy rate, especially in the urban areas is expected to raise participation rate, adding another 160,000 job seekers to the labour force for next 10 years.

Finally, intra- and inter-provincial migration is expected to add another 50,000 people to the labour force each year for next 10 years. The report indicates a possible slowdown in the migration rate “if unemployment rate continues to rise in Sindh”.

So, while nearly 600,000 additional persons will be seeking job each year, the long-term job creation rate of the province has been around 350,000 and in some cases of high growth years nearly half a million indicating that under the status quo there will be an annual addition of 100,000 to 250,000 unemployed persons.

Does this mean that Sindh’s unemployment problem is insoluble? The report raises the questions and answers that it can be solved if Sindh’s economy could grow at a sustained rate of 7 to 8 per cent a year for next 10 years.

With elasticity of employment to GDP growth estimated to be 0.9 per cent generating 600,000 new jobs. It implies a GDP growth rate of 6.5 per cent a year.

And if the aim is to reduce unemployment below the current rate of 5.9 per cent, that would call for an additional growth of one percentage point each year — that is an annual GDP growth rate of 7.5pc — a target that the World Bank believes is achievable given Sindh’s potential.