LAHORE - It is an encouraging sign that unemployment rate in Pakistan has gone slightly down from 6.30 per cent to 6 per cent in the second quarter of 2013-14, but the percentage of unskilled labour among the unemployed remains alarmingly high.
Statistics collected from across the industrial web show that out of 59 million potential workforce, 56.5 million is employed while 3.5 million (6 per cent) are unemployed. Over 90 per cent of the unemployed labour consists of unskilled people and most of the rest 10 per cent are those who are educated but without any skill.
This suggests that unemployment issue could be addressed to a large extent by just imparting skilled education to the youth. “No skilled person has been found to be unemployed, particularly in big cities of the country,” claimed FPCCI former regional chairman Sheikh Abdul Waheed Sandal.
Sandal said that textile, engineering, plastic, leather, services and almost all other sectors of economy are facing shortage of skilled professionals though unskilled labour force is available everywhere. “There is huge mismatch in market requirement and production of educational institutions,” he said, adding that different industries mostly employ unskilled or semi-skilled people and provide them on-job training.
As per statistics, our industry presently requires around one million skilled workers whereas only 100,000 skilled people are available in the market, though some experts believe that availability of skilled labour may see a big increase in a couple of years as several new training institutes have started imparting technical training to thousands of youth.
Unemployment rate in the country has reduced to 6 per cent in the second quarter of 2013-14 from 6.30 per cent in the first quarter, following improvement in supply of gas and electricity to the textile industry – the major employment generating sector of Pakistan. The industry restarted running on three shifts and employed additional 500,000 works thereby reducing the overall unemployment ratio.
But textile industry being concentrated in Karachi and few cities of Punjab, the overall unemployment rate hasn’t improved much. Unemployment is high among women and youth in urban areas, as per the Labour Market Profile. Unemployment among women in urban areas is 21 per cent compared to men’s seven per cent.
Experts, quoting the figures of Pakistan Bureau of Statistics, said that during 1985-2013, unemployment rate averaged at 5.4 per cent in the country, reaching an all time high of 7.8 per cent in 2002 and a record low of 3.1 per cent in 1987.
The criteria to measure unemployment in Pakistan as well as in the South Asia region is different from that of the developed countries where the low wagers or beneficiaries of government allowances too are considered unemployed while in Subcontinent a person who even earns a single penny is considered employed.
For example in Pakistan, 45 per cent of total labour force is engaged in agriculture. But this figure is partly misleading as all the adult members of a family are considered employed even if just a single member is actually cultivating land while others are assisting him on part time basis.
Unemployment ratio in Bhutan is 4pc, Bangladesh 5pc, Sri Lanka 4.2pc and in India it us 8.5pc but in India wages are comparatively high and more than 300 million professionals are highly paid. According to experts, in all the South Asian countries the informal sector of economy dominates the labour market, as its share in employment ranges from 70pc in Pakistan to 80pc in Bangladesh and up to 90pc in India.
Though figures vary every year, around 0.5 million Pakistanis go abroad every year to earn their livelihood and 90 per cent among them travel on labour visas. An official of the Overseas Pakistani Foundation told this scribe that more than 2.7 million citizens went abroad for employment opportunities over the last five years (2008-2013). The number of migration was highest in 2012 when 638,587 people went to different countries for employment.
The official said that 5,873,539 Pakistanis emigrated from 1981 to 2012, out of which a staggering 41,498 professionals and technical workers left in 2012 alone. The net average migration rate is one in 415 people which is higher than that of any South Asian country and Pakistan also receives more remittance.
The top six destinations for Pakistani workers, as per Foundation data, are Saudi Arabia, UAE, USA, UK, Gulf Cooperation Council (GCC) countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries, with Saudi Arabia topping the list. Last year (2013) around 18,364 people went to Saudi Arabia and Pakistanis there sent home $4.105 billion between July 2012 and June 2013. Malaysia and South Africa have also become favourite destination of Pakistanis for jobs in recent years.
CM’s adviser on economic affairs and head of economic research centre at LUMS, Dr Ejaz Nabi said that Pakistan job market is quite big. He said that after gaining some experience in local industry, almost 25 per cent trained youth go abroad for jobs.
In Punjab, Technical Education and Vocational Training Authority (TEVTA) and Punjab Vocational Training Council (PVTC) are producing around 100,000 skilled professionals most of whom get jobs. “At federal level, National Vocational & Technical Training Commission (NAVTTC) produces 50,000 skilled youth. Moreover, with the support of the US, England and Germany there are USAID and GIZ sponsored technical training institutes, which are producing 7,000 to 10,000 skilled people every year.” He said that some multi-national companies, including Engro, are also providing need-based training to almost 10,000 students annually.
Dr Ejaz Nabi, who is also country director of the International Growth Centre, said that the government has been progressing in the right direction. He said the government is planning to enhance training volume to almost 400,000 people annually from present figure of around 100,000.
He said that small to large businesses are operating at their one-third capacity due to unavailability of energy. Energy generation is the top-most priority of the present government and it was sure moves to solve this problem in shortest possible time. He expressed hope that unemployment ratio would decrease significantly in next couple of years with the improvement in power supply to the industries.
Though specific data on how many people join labour market across the country every year is not available, officials say around two million fresh youth come to seek employment and nearly half of them get jobs.
A Labour Department official seeking anonymity said that despite substantial industrialisation, 45 per cent Pakistanis work in agriculture sector. Other important sectors where youth seek employment are: mining and quarrying, manufacturing, electricity, gas and water, construction, trade, restaurants and hotels, transport, communications and other service sectors.
State Bank of Pakistan former governor and Beaconhouse National University vice chancellor Dr Shahid H Kardar claimed that around 2 million youth enter into market in search of jobs every year but only 1.2 million succeeds in getting them. He emphasised the need to adopt a strategy at national level to face the challenge of providing jobs to the 40 million youth in next 35 years for which he said a realistic taxation system is necessary.
“Government will have to increase growth rate from 3 to 8 per cent to provide employment to all youth. And, to ensure 8 per cent growth rate, we should fetch investment rate to 30 per cent which is 19 per cent at present in Pakistan.” Investment should be preferred in those cities where revenue collection is high, Kardar suggested.
He also appreciated private sector for providing jobs to the youth on the basis of their capabilities. However, he said, “There is need for skill training of those who are already in the workforce to meet the professional needs of high economic growth, as without further training, these workers will be unprepared for occupational mobility, necessary for economic growth.”
According to the Federal Bureau of Statistics, 17,251,000 workers are engaged in housekeeping while 15,004,000 are students. The bureau also puts 4,581,000 people in the category of ‘others’ which means it does not know whether they are working or not.
The educated also form a major part of the unemployed, probably due lack of planning on the part of educational institutions. Unfortunately, educational institutions are more interested in enrolling maximum number of students than imparting education according to the market needs and job opportunities.
Commenting on this problem, Punjab University’s Department of Economics Chairman Prof Dr Hafeez-ur-Rehman said there was a mismatch between the demands of different professions and the provision of the kind of education required. He said the higher education institutions were imparting general education and not focusing on the market trends and needs. Secondly, he said, it was unfortunate that whenever any profession gets in limelight, everyone runs for it creating surplus in that particular sector and deficiency of trained professionals in other sectors.
Dr Hafeez suggested that there should be aptitude test at every level from school to university while giving admission to the students so their natural abilities could be judged. He said that higher education institutions should establish new departments as per need of the market. Increased opportunities of relevant technical education would help in bringing down unemployment rate, he said, adding that due to lack of quality education we are also unable to compete at international level.
Dr Hafeez also pointed out that our social setup was also major reason in gender job disparity as the people do not let their daughters do job. This big number of ‘voluntarily jobless people’ also results in increase in general unemployment figure. He said there was a dire need to end this negative tradition to avert wastage of manpower. The social setup or ego problems are also the reasons behind unemployment among men too as a lot of people don’t do jobs which they think are below their standard and calibre, he added.
Government College University Lahore Vice Chancellor Prof Dr Khaleeq ur Rehman said that although due to Higher Education Commission the curricula of the universities was updated and brought close to the international standards but more good teachers were needed to teach and train the students according to the market need. He said teachers should be properly trained and motivated. He said some universities access the need of the market and increase and decrease seats in various disciplines according to the need but others simply do no meaningful planning at all.
Another vice chancellor of a public sector engineering university, who preferred not be named, said that due to overall bad economic condition in the country, unemployment among graduates is increasing. He said in past, the graduates of the engineering institutions were hired even during studies. But, due to increase in number of graduates and lack of job creation, the menace of unemployment is getting from bad to worse. He suggested upgrading the education system according to the needs of the time.
Former federal education minister Mian Imran Masood stated that the education system of Pakistan is based on unequal lines. The lack of technical education is the biggest flaw in the education policy that has never been focused. Less technical people means low standard of education. He said that allocation of funds for education is very low, which is only 1.5-2 per cent of the total GDP, which should be at least 7 per cent of the GDP.
LCCI President Engineer Sohail Lashari said that the federal and provincial governments need to cut down their expenditures in other areas and spend a bigger proportion of budget allocations on technical education. “Due to low technical vocational competence and inability of producing highly skilled and adaptable human resources, most of the skilled persons are not capable of responding to the fast changing needs of the globalized economy.”
He said that the present Technical Vocational Education and Training (TVET) system had no standardisation and uniformity, as it has poor linkages with industry. He said that there had been a phenomenal growth in the number of technical institutions and enrolment of trainees but they were teaching 40 years old syllabus. He proposed that effective private-public partnerships must be encouraged to enhance the relevance, efficiency and sustainability of technical training.
All Pakistan Business Forum (APBF) former president and Thermosole chief executive Nabeel Hashmi pointed out that TEVT is imparting training of those technologies which have become obsolete now. “We have to train them again to give them employment in our industrial units. If I order for a mould, a Chinese company completes it in 45 days while local company takes at least 6 months for this”, he said.
“Man, machinery and material are basic things in an organisation. Machinery and material can be imported but now we are also thinking of importing men as local staff is inefficient, having problems in learning and loyalty towards job.” He claimed, “Punjab technical institutes are white elephants as an MBA or graduate of the UET does not know even the basics of engineering.”
Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) chief coordinator and former chairman Ijaz Khokhar said that garment and carpet sectors are one of the most labour intensive as one factory employs on average 1000 people while a spinning mill does not create jobs for more than 150 people due to atomisation. Presently, the 40 per cent or 2.5 million of country’s skilled and semi-skilled labour force is engaged in garment sector.
The $1.2 billion industry of Sialkot, including garment, leather garments, gloves, sports and surgical instruments are running below capacity by at least 30 per cent partly due to energy issue and mainly owing to crucial shortage of skilled as well as semi-skilled workforce. “On each and every corner, you can see the banners demanding professionals in Sialkot as well as in Faisalabad. There is no un-employment of skilled persons in Sialkot, Faisalabad, Karachi and Lahore. There are 10,000 stitch masters in Sialkot and at least 5,000 more can be absorbed in present situation.”
“The EDF had approved grant for PRGMEA Technical Training Centre in Sialkot but fund has not been issued yet. The same institute is working in Lahore and every diploma holder of this institute gets job immediately,” he claimed.
APTMA Punjab Chairman SM Tanveer said that there is large scope of textile industry growth after GSP Plus status, as this sector may witness double growth by 2016 but there is no roadmap of producing professionals to be absorbed in this sector. “Our training system is supply-driven, lacks meaningful participation of stakeholders, and is not geared to meet the current needs of skills market.”
Tanveer said that due to low budgeting provisions for training materials, poor quality of teachers and obsolete machinery, existing TVET institutions are not capable of imparting and developing skills required for competitiveness, productivity and employment. These factors have resulted in increasing unemployment on the one hand and a skills shortage on the other, he added.
Noted economist Dr Ashfaq Hassan viewed that training system imparts industry-specific courses, despite the fact that there is limited industry in villages where majority of the population lives. “There is an urgent need to develop agro-based skills to support the rural population as well as to improve technical competence and quality of workers in the informal economy.”
Dr Ashfaq said that current qualification framework does not extend national competency standards linked with international recognized benchmarks, besides shortage of high-tech institutions required to cater to the new emerging requirements of knowledge economy.
Many technologies are imported by under-developed countries like Pakistan from advanced countries, which may not find suitable local workers, causing skill mismatches. The government should prepare a roadmap and establish credible institutions to minimise this mismatch, besides ensuring that the imported technologies are in compliance with the local conditions. g