P
Studies in Economics
and Public Policy
STATE OF EMPLOYMENT
IN PAKISTAN
INSTITUTE OF POLICY STUDIES ISLAMABAD
Institute of Policy Studies, 1987
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FOREWORD
Pakistan has been riding on the crest of problems, but if one were to identify the most challenging problems that are rocking the economy today and threatening the whole fabric of society perhaps very few would disagree that such are the twin-problems of unemployment and law and order. There are reasons to believe that presently one in every five persons is either out of job or under- employed. The problem has been snow-balling over the years. Successive Governments, planners and policy-makers have grossly neglected this problem. Even the Sixth Five Year Plan tretated it as peripheral issue, assuming a patently unrealistic rate of enemployment i.e. 4.9 percent by 1988. Perhaps there could not be a greater understatement of facts about a problem that has grave economic, social, political and humanitarian consequences. It is utter neglect of this problem that has, among others, led to social and economic unrest in major cities of Pakistan, unco-ordinated immigration of population, deteriorating law and order situation, brain drain and rebellion of the youth alongwith huge waste of manpower.
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The Working Group of economists and policy-analysts which met recently under the auspices of the Institute of Policy Studies has focused the attention of the nation on the state of employment in Pakistan. The Group felt that the problem is too grage to be neglected. Official data on the subject is too scanty and unreliable. The Group felt that as against the official estimates of approximately 3-4 percent
unemployment the real rate of unemployment is around 15 percent, involving the fate of some 4-5 million people. And if 10-15 percent under-employment is also taken into account the overall real incidence of unemployment may be. in the range of 20-25 percent, which cannot be tolerated in any civilized society, what to say of one that is committed to be an Islamic Welfare State.
This situation also suggests that the development strategies which the successive Governments have pursued during the last four decades have failed to come to grips with the real economic and social problems of the people. The whole pattern of growth has neglected the vital dimensions of employment and the quality of life. Similarly the educational system of the country has miserably failed to produce manpower that could be gainfully absorbed in the economy. It seems as if the economic system and the educational system belong to two different worlds, with no linkage between them. The development strategy ignored the realities about population and its requirements while education has neglected the demands of the emerging pattern of economy, in the country and abroad.
That is not the whole story. The country not only lacks an employment policy and proper educational and manpower planning, it also lacks a labour policy and a realisation that the economy must ensure to the working classes a just wage, a wage that on the one hand, enables a people to make maximum contribution towards production and, on the other, assures them a reasonable living. Human resource development and a just incomes policy are conspicious by their absence in a country that was established to realise the Islamic values of ‘adl wa Ihsan’.
There is great dearth of literature on employment and labour economics of Pakistan. Reliable data are not available. Enough research, particularly policy-oriented research, has not been undertaken in this area. The Working
Group has rendered a timely service by producing this report which covers major aspects of the employment problem and has offered operationally relevant suggestions for meeting this challenge. We hope those responsible for framing the Seventh Plan will take serious note of this brief but valuable contribution on the subject. In view of the Prime Minister’s avowed Five-Point Programme, which includes employment generation, the relevance of this study increases manifold.
The economic reports of the IPS Working Group have now developed an identity of their own. It is hardly needed to once again record that the members of the Working Group do not necessarily share political preferences, but they are committed to the objective of creating an Islamic society in Pakistan through democratic means. This is what has brought them together and accounts for the open and frank discussion on various issues. While the views of the Group members differ on several issues the final product included in this report represents a general consensus. In view of the importance of the problem of unemployment this Working Group consisted not only of economists and policy-analysts but also persons belonging to industry and trade union movement. Dr. Faiz Muhammad acted as repporteur of this group.
KHURSHID AHMAD
INSTITUTE OF POLICY STUDIES
ISLAMABAD
JUNE, 1987
