LAHORE: The already undersized job market in the most populated province of the country, Punjab, is fast shrinking as is evident from its unemployment rate which, according to the Asian Development Bank , had one percentage point higher than the national average of 7.5 per cent since 2000.

Although no reliable or current data is available, ADB officials say there is little evidence to suggest that the situation has improved since. In fact, the human development indicators of the province, that are like always still on the lower side, suggest that the situation is worsening in urban and rural areas alike as is evident from the increase in poverty to at least 33 per cent from 25 per cent in 1993.

Apart from several other factors, replacement of older technologies with most modern ones and emphasis on automation by the industry is largely blamed for the situation.

"The employment of latest technology in the industry and mechanization of agriculture is increasing productivity and efficiencies, but reducing the number of jobs needed to accommodate the huge and growing workforce," says Dr Anis Alam, an academician.

"This is a universal phenomenon. Even in the most developed economies like the United States, the sales of companies have increased despite a substantial decrease in the number of their workers," he says. "Same is happening in Pakistan." While the adoption of new technologies may be reducing the number of industrial and farm jobs that were available a decade or so ago, no new opportunities are being created in either sector owing to lack of fresh investment due to a host of reasons.

Economist Salman Shah says no new jobs have been created in the urban Punjab during the last 8-10 years. "No investment in the economy, no new jobs." It is despite huge growth of textile industry in the province since early 1990s.

The situation of agriculture is not much different, if not worse. "The reduction of agriculture's share in the country's GDP indicates that the employment opportunities in the rural areas have decreased," former Punjab Finance Minister Shahid Kardar says.

Mr Shah believes Pakistan's (employed) labour force as percentage of population is very low as compared to other countries. "Besides, our labour still comprises more unskilled people than the skilled ones with very small or negligible participation of women."

He says people are migrating from rural areas, where there is a problem of under-employment, to urban areas but are not getting jobs, thus creating social problems. Though Mr Kardar avoids guessing about what many prefer to call unemployment crisis in Punjab in the absence of reliable data, he says the situation does not seem to be as serious as in Sindh or elsewhere in the country. His observation is based on the very fact that the industry has largely moved to Punjab from Karachi during the last one decade or so as a consequence of political and ethnic trouble in that city.

"Moreover, whatever fresh investment in the industry has come, it has come mostly in Punjab during these years," he says. Another indicator pointed out by him to support his argument is the relatively better law and order in Punjab than in the rural and urban parts of Sindh. However, he concedes the "traditional family support system" has helped ward off the kind of situation in Punjab that has existed in Sindh for more than one-and-a-half decade.

But some tend to disagree with him. "Although the textile industry has been relocated from Karachi to Punjab during the 1990s, it did not address the unemployment problem. Most industrialists have invested their money in technology to improve their efficiencies and productivity which has helped little to create new jobs," says former Lahore Chamber of Commerce and Industry president Pervez Hanif.

Lack of fresh, private investment due to a host of factors is commonly blamed for the absence of new jobs. "Government cannot provide jobs to all. Nor does this issue seem to be on its agenda. It appears keener on building foreign exchange reserves rather than generating greater economic activity that will help fix this problem. Had there been an environment for investment, the private sector would have generated a lot of new job opportunities and the situation would not have been as precarious as it is now," says Mr Hanif.

He says the government needs to help accelerate the pace of economic activity, create a demand within the country for goods and services produced locally, and discover new foreign markets for increasing exports. "Unless you do this, nobody would invest in this land. And without fresh investment by the private sector, you cannot even think of fixing the problem of unemployment."

Mr Shah thinks the problem could be tackled in the short-term through heavy government spending on building infrastructure in areas of higher unemployment rate. "This will not only fix the problem in the short-term, but will also create infrastructure which is badly needed for attracting fresh private investment in industry, agriculture, and services to tackle the issue in the long run."

Punjab government officials insist that this is precisely what they are doing: investing in agricultural and industrial infrastructure as well as law and order to attract in the province private investment both from within and outside the country.

"The provincial administration is very much alive to this issue and is focussing on it. But you should not expect the situation to radically change overnight," says a finance department official. He, however, says: "The major responsibility for fixing the problem rests with the federal government which has the resources for tackling such issues and where such policy initiatives are drawn up."

Dr Alam, however, believes that the problem cannot be fixed just by creating infrastructure and without re-aligning and re-orienting existing education system which is one major snag in the way of fresh investment.