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Creating quality jobs

July 30, 2012


WITH the exception of Pakistan and Nepal, improvement in job quality has occurred almost everywhere in South Asian region, predominantly in service and manufacturing sectors.

India and Sri-Lanka recorded rapid growth in their GDP both due to substantial increase in number of technically skilled workforce and also owing to other improved production inputs particularly use of updated information technology in service and manufacturing sectors. Thus along with reduction in poverty, quantity as well as quality of jobs improved substantially in these countries. This also indicates that job quality has improved within each sector of economy rather than through labour movement from one sector to another.

However, Pakistan, Bangladesh and Nepal have experienced across the sector movement of labour over the last three decades.

Spread of education in rural areas, though not satisfactory at least in context of Pakistan, has facilitated transition from agriculture to better jobs in manufacturing and service industries. Massive migration of skilled workforce from South Asian countries to economically advanced countries and oil rich economies of the Middle East have pushed real wages high for those remaining in the countries, by creating strong demand for them in the domestic labour market. This phenomenon, on the other hand, boosted overseas workers remittances and have significantly contributed towards reduction of the poverty in the region.

Findings of various surveys conducted in the region relating to persistently high growth of work force under the aegis of World Bank identify the need for generating employment opportunities for 12 million people per year by the end of 2030 when slow down is likely to occur in exist ting demographic transition trend in this region.

The reports state that sustained growth in number of new entrants in the workforce would either be absorbed in jobs producing progressively lower output of goods and services in formal sector or be forced to be labeled as self-employed / employed in informal sector. Hence challenge for whole of South Asia is to create jobs giving higher level of output per worker.

Female labour participation in economic process is very low in this region particularly in Pakistan where four out of every five women of working age are not gainfully employed followed by India and Bangladesh where two out of every three women participate in workforce. It is household duties which account for their non participation. With enhanced opportunities for higher and technical education for women and promotion of entrepreneurial skills among those who want to get self-employed, an increased proportion of working age women will seek work. Hence an estimated at least three million jobs will needed to be added to female work force every year, building up total annual figure of jobs required in the region to 15 million.

Apart from this enormous challenge of creating jobs for 15 million every year, how to generate quality jobs remains the burning issue for the region. Pakistan, India and Bangladesh have been identified as having large shadow / informal economies. Lack of good governance, poorly run institutions and excessive regulations compel workers and small businesses to slide to informal sector, where they can easily evade taxes and remain outside the purview of labour laws. World Bank survey report narrates how “business firms faced with onerous regulation, inconsistent legal enforcement and corruption have an incentive to hide their activities in the underground economy”.

Actually generally institutions of these countries operate for the benefit of a narrow elite class instead of pursuing economic welfare of masses. The prevailing political system in these countries is giving rise to unbridled shadow economy, which, in turn, is impeding the growth of quality jobs needed for high economic growth.

Job creation in the formal economy and utilisation of workforce at the optimum level entails investment both in physical and human capital. Since development of needed infrastructure is essential for the growth of all sectors of economy, focus of governments of these countries particularly Pakistan, Nepal and Bangladesh should be to ensure regular power and water supply most needed both for rural and urban sectors.

A t the same time, it is necessary to enhance quality of technical and professional education and make it accessible to youth universally and indiscriminately on the basis of merit alone. To absorb skilled work force in quality jobs it is essential that professionally skilled workforce from rural areas be facilitated to move to urban sector to get absorbed in manufacturing and service industry and urban youth from lower into higher productivity jobs within the industry. Development of IT industry in India has facilitated use of new technologies in all fields of economy and it not only created high profits and mid-level executive jobs. Through export of software and IT skilled manpower, the country is also earning a major chunk of its foreign exchange.