Updated May 14, 2018 08:23am

Our growing economy is not producing enough jobs

Jawaid Bokhari

THE Pakistan Economic Survey 2017-18 provides no data on the latest unemployment rate in the country. The last official figure was a rate of 5.9 per cent for the fiscal year 2014-2015 when joblessness was on the decline.

The level of unemployment has been rising ever since despite the economic growth trajectory recorded in the past five years, implementation of skill development schemes, self-employment programmes and the setting up of the first ever job placement centre, designed to facilitate and provide career counselling to job-seekers for bridging the gap between employers and skilled persons.

Independent economists question the official data on unemployment suspecting that the government is understating the rate. In an article published in Business Recorder, Dr Hafiz Pasha says that the unemployment rate that emerges from the Household Integrated Survey of 2015-16 is almost 9pc.

He notes that it is significantly higher than the Pakistan Bureau of Statistics’ estimate of 6pc derived from the Labour Force Survey of 2014-15. According to the latest National Human Development Report, the youth unemployment went up from 6.5pc in 2007 to 9.1pc in 2015.

Dr Pasha says the level of unemployment is especially high in urban centres, among females, and highly educated workers. For example, he says that 20pc of the youth in the labour market with post-graduate qualifications is without jobs.

According to the latest Population Census, the population in ten major cities has increased by 74.8pc since the last census was held, following significant movement of people from rural to urban areas in search of jobs and opportunities.

To control this shift in population, the government has set up a Centre for Rural Economy in the Planning Commission to promote sustainable and inclusive growth across the countryside. But the influx of job-seekers in Karachi continues unabated, especially from rural Sindh.

Policymakers are focused on economic growth that measures national income, not the living standards of the teeming millions. They need to evolve an indigenous egalitarian model for economic development that can resolve unemployment.

The problem of the unemployed or underemployed labour force has reached a critical level for various reasons. The mainstream economic activity is shedding labour in a drive to cut costs and improve productivity, helped by information and communication technology, information technology and a cheaper labour contract system.

There is a youth bulge for which enough jobs are not being created. Investments in Greenfield projects that provide more jobs than consolidation of businesses are at a low level. And Chinese workers and experts are competing with Pakistani labour in China Pakistan Economic Corridor projects.

No attention has been paid to the quality of economic growth which may or may not produce enough jobs. This requires that the issue be seen from the broader perspective of a transforming world in which job creation has turned into a global problem.

The elitist economic model needs a strong egalitarian bias to work for the common good. The traditional welfare state is withering away even in the developed economies of Europe where the concept of public welfare was deeply entrenched.

The best substitute that has so far surfaced at the international level is the concept of Sustainable Development Goals. When realised, the SDGs will largely help empowered individuals to earn their livelihood and empowered communities to resolve their problems in a fast-changing economic environment.

SDGs have to be a joint project of the state, business and active citizenry. The Parliament recently adopted a resolution supporting the SDGs and the National Assembly has set up an SDGs Centre.

Similar centres have also been set up at the federal level and in Punjab. Last year’s economic survey had revealed that the process of setting up of such units in other provinces is underway. This year’s survey did not report any progress.

Policymakers’ commitment to SDGs is weak. Political parties are in the tight grip of power politics unaware of the social vulnerabilities it is creating. This also brings us to the domain of lack of creativity in the development of economics science.

Here, a quote from a recent article in The Economist, London would be pertinent: “Economics enjoys greater influence over policy than other social sciences. Striking new finds are published by researchers and their institutions, promoted by likeminded interest groups and politicians and amplified by social media.

“Conflicting results and corrections are often ignored. It is wise to be sceptical about a single result.” Policymakers in Pakistan are still focused on economic growth that measures national income but not the living standards of the teeming millions.

They need to evolve an indigenous egalitarian model for economic development that can resolve the problem of unemployment and tackle accumulating issues in public welfare.

jawaidbokhari2016@gmail.com

Published in Dawn, The Business and Finance Weekly, May 14th, 2018

Read Comments