How big is Pakistan’s job creation engine?

The good thing about World Bank President Ajay Banga’s visit to Pakistan is that it got the nation talking about job creation, and how many jobs the country needs to create over the next 10 years. The bad news is that it never occurred to any Pakistani journalist to ask: how many did we create over the last 10 years?

Perennial optimists that we are, it is not our contention that Pakistan is creating enough jobs. But when such conversations come up, it is important to understand just how far off Pakistan is from its goals. To talk about how much Pakistan needs to do without having some baseline as to how much the country is doing now is to present an overly pessimistic picture.

So without further ado, here are the stats: over the past 10 years, Pakistan’s economy created a net 16 million new jobs, based on Profit’s analysis of data from the Labour Force Survey published by the Pakistan Bureau of Statistics. That represents a 28% increase in the number of jobs in the economy relative to where they were 10 years ago.

Ajay Banga, relying on estimates from the World Bank and corroborated by local economists, estimated that Pakistan needs to create a net 2.5 million to 3 million new jobs per year over the next 10 years. That would require the workforce to expand by between 32% and 38% relative to its level in 2025.

The current rate is, of course, lower than that, but perhaps by less than one might have expected. But one suspects that you may think that given the fact that we need to increase the number of jobs by 32% in the next 10 years (on the low end) and were able to do 28% over the past 10 years, the “gap to goal” is not as wide as the public discourse might have suggested.