Pakistan needs 1.3 million new jobs every year: UNDP

ISLAMABAD: The United Nations Development Programme (UNDP) has said that by 2035, the number of people attaining working age is likely to rise from current four million to five million and Pakistan needs to generate 1.3 million additional jobs on average every year.

The UNDP’s National Human Development Report (NHDR) opined that growth in employment creation is necessary to match the unprecedented number of young people entering the working age. The additional jobs to be created per year were for the next five years, the report added.

The report has clearly indicated that current labour force participation and unemployment rates suggest that Pakistan’s working-age population includes around 3.5 million unemployed individuals.

An additional 1.4 million or more people of working age will join the labour force every year for the next five years.

At the current participation and unemployment levels and considering the number of retirees, Pakistan needs to create 4.5 million jobs over the next five years (0.9 million jobs annually).

The report suggested that the gradual increase in labour force participation rates means added pressure on the labour market with increased demand for employment opportunities.

The survey of the report believed that job creation has been relatively fast in Pakistan. A coherent strategy adopted at the provincial and district level across multiple sectors with clear annual targets can help generate 0.9 million jobs a year. It added that the challenge lay in creating jobs that also ensure better living standards.

“Expanding the formal sector, supporting entrepreneurship, building the human capital of youth and active labour market policies are key instruments to ensure that the required growth is inclusive and sustainable”.

Interestingly, there is an exchange between creating limited work opportunities that are high in quality and offering a larger number of jobs that do not meet quality conditions.

The report recommended that complete concentration on quality and not on creating enough jobs would be equally problematic while failure to produce additional employment opportunities could lead to 43 million people being unemployed by 2050.

“The caseload for Pakistan to create additional jobs is unprecedented. According to estimates, the country needs to generate 0.9 million jobs every year for the next 30 years, without interruption, even to maintain unemployment at the current levels.

It is also clear that the country’s few urban centres, or any one sector of the economy, cannot create all these jobs. Every sector of the economy and every city, town and village would have to contribute to employment generation to meet the target”.

The agricultural sector, constituting Pakistan’s main source of employment (42.3 percent), has immense potential for employment generation at both the farm and non-farm levels.
However, suffering from declining shares in the national GDP and low productivity, this sector will require the right set of investments and policy reforms to improve.

Apart from reforms in the traditional farming sector, rural enterprise development has significant potential for employment generation.

The report also revealed another key sector of Pakistan’s economy, manufacturing currently absorbs around 15.3 percent of the total employed labour force despite being hindered by energy shortages and the poor law and order situation.

The services industry, currently employing 42.4 percent of Pakistan’s total employed labour force, is another important sector with great untapped potential. It’s some sub-sectors function at a far lower rate than their capacity.

The hospitality sector, accommodation and food, directly linked to tourism, accounts for only 1.6 percent of the country’s total employment. This sector can contribute significantly to employment generation if supported and promoted with a clear policy direction for employment generation.

Sub-sectors of this industry, finance and insurance services, contribute just fewer than two percent to Pakistan’s employment, while information and communication contribute less than half a percent.

Increasing economic activities and improving access to finance and technology would encourage significant growth and employment creation in these sectors.

Overall, with the rapidly growing services sector becoming a major source of jobs in the country, Pakistan must ensure that this sector provides the young with a chance at long-term career progression.

According to estimates by International Labour Organization (ILO), unemployment between the ages of 15 and 24 in Pakistan is 10.8 percent. This is higher than other countries in the region, like India, Bangladesh and Nepal although better than Sri Lanka.

The report claimed that developing a clear strategy focused on employment generation and implementation is the first step in the necessary task of creating 0.9 million jobs a year in the country of close to 200 million people.