How does the government

intend to go about reducing unemployment?

The Planning Commission now has a whole bunch of new members. But what, if anything, are they doing about formulating plans to generate jobs for millions of unemployed Pakistanis?

By Kaleem Omar

The events of the last 16 months or so have generated a lot of political dust in Pakistan. After the dust settles, however, the new PPP-led coalition government will have to buckle down in right earnest to tackling the country’s economic problems, including a burgeoning trade deficit, an alarming rise in inflation, an increasing level of foreign debt, slowdown in GDP growth, and a whole clutch of problems associated with an infrastructure that leaves a great deal to be desired.

Other economic problems that need to be urgently addressed range from low industrial productivity, on the one hand, to falling levels of foreign investment on the other. Very high, and ever-rising, tariffs for such manufacturing inputs as electricity and gas is yet another problem that must be urgently addressed in order to make our products more competitive in export markets. But perhaps the most immediate serious problem facing the country is unemployment.

From unemployment, other problems develop. In a discouraged state of mind, the unemployed is driven toward anti-social behaviour. An unemployed person neither serves as a worthy example to his children nor does he actively motivate them to go to school and study.

Thus, a chain reaction takes place. The despair and disillusionment of the unemployed parent is passed down to the children. The example of failure is vividly present and the parents’ frustrations and habits become the children’s.

There is no immediate total solution to this problem, but far more can be done than has been done in the past by successive governments, by the private business sector, and by community organisations, individually and jointly, to create jobs in the short range and in the long range to train people so that a high proportion of them will not remain out of work.

The previous government, for its part, said back in 2005 that it had launched a number of infrastructure schemes that would create two million new jobs over the next three years. Like so many other initiatives, however, that initiative, too, fizzled out like a damp squib, making hardly a dent in the high level of unemployment.

But even if that initiative had not fizzled out, it still would not have begun to address the magnitude of the problem – given the fact that an estimated three million people a year enter Pakistan’s job market.

Thus, over the three-year time frame (2005-2008) during which the previous government said it would create two million new jobs, an estimated nine million people would have entered the job market. So even if two million of them had got jobs in the previous government’s infrastructure schemes (which, in fact, they did not), that would still have left seven million people who would have had to look for jobs elsewhere – whether it was in agricultural, industry or the services sector.

There is a lot of unemployment and under-employment in the rural areas, where many farm workers only work intermittently. The problem has been compounded by increased mechanisation on farms – with tractors, harvesters and other equipment now doing the work that people used to do in the past.

To create a job in the large-scale manufacturing sector costs a lot of money. For example, a textile mill with a capacity of 12,500 spindles costs more than a billion rupees at current prices but creates only about 600 jobs. This works out to a per-job cost of Rs 1.66 million. Creating two or three million jobs a year in the large-scale manufacturing sector would therefore be prohibitively expensive for a developing country like Pakistan.

The services sector and small- and medium-sized enterprises (SMEs) are better bets. Jobs can be created in these sectors at a much lower per-job cost than in the large-scale manufacturing sector. Even in industrial countries, SMEs provide more than 60 per cent of all employment. Thus, the SMEs sector needs to be actively encouraged and supported by the government through policies aimed at creating an enabling environment for the setting up of large numbers of SMEs, including agribusiness ventures. Greater access to credit for SMEs should be a key part of this policy framework.

To tackle the problem of unemployment, the government should also consider enacting a Manpower Development and Training Act, to provide funds for vocational training, both institutional and on-the-job. Funding should be of an order big enough to ensure that large numbers of people benefit from the training.

Present vocational training programmes in Pakistan skim the cream of the unemployed, and unfortunately seldom include the most disadvantaged.

The government should start a bunch of new training programmes, including Youth Training and Employment Projects, which should be supervised by a new Economic and Youth Opportunities Agency. Provincial governments should start institutional vocational training programmes, which should be administered by a new Provincial Department of Employment in each province.

Apprenticeship training should be made mandatory in large industrial units and commercial enterprises throughout the country. In addition, new legislation should empower the federal Ministry of Labour and the provincial labour departments to conduct vocational training programmes.

If properly administered, these new programmes could contribute constructively to a partial solution to the unemployment problem. But the very diversity of the approaches reflected in this listing of programmes points to the importance of coordination. The coordination function should be performed by new permanent and convenient local centres where many of the programmes would be located and where the unemployed could go for desired and necessary training. The training programmes now in existence are not being used to do the most good for the most distressed.

In most existing vocational training programmes, two essential elements seem to be missing. The first is “attitudinal training” to help the candidate develop the necessary motivation, certain basic principles of conduct, and essential communication skills, all of which are necessary for success in the training course and for the employment to follow. The second is counseling, a service necessary if use is to be made of the particular skills, interest and attitudes of the candidate. These deficiencies seem to occur partly for budgetary reasons and partly for reasons that have to do with a lack of awareness among administrators responsible for running vocational training programmes.

There is also a lack of coordination between the existing training programmes and the job opportunities. All too often, a person goes through training, acquires the necessary skills to fill a job only to find that no job awaits him. The results can be disastrous.

The business community should also play a role in all this by setting up rehabilitation committees under the auspices of the various chambers of commerce and industry. These committees should be permanent organisations, properly staffed and financed by the chambers. The committees, as well as major employers, should operate in conjunction with the federal Ministry of Labour and the provincial labour departments, and should establish joint counselling and employment functions, so that people seeking jobs can apply for them with a minimum of inconvenience and expense.

Many of the unemployed are unemployable because they lack skill and training. To meet that pressing need, a major job training and placement programme, should be instituted throughout the country. Private employers should support such a move by supplying the necessary equipment, counselling service and, in some instances, instructors.

Courses should be directed toward job availability and employers should take upon themselves the responsibility of providing jobs to graduates of the training programmes. Funds needed for physical facilities and operations should be provided under existing legislation or under a new Economic Opportunity Act and a new Manpower Development and Training Act.

Government employment programmes are commendable and each in its way has helped to alleviate the problem, but they are far from adequate. The critical problem persists.

Hype indulged in by successive previous governments with respect to federal programmes has created a false impression that more job opportunities would be available than actually have been developed. The endless bureaucratic in-fighting between local, provincial and federal government officials over the administration of the authorised programmes – most particularly the Poverty Reduction and Rural Support Programme – has disappointed many and made the situation worse.

The wheels of bureaucracy grind slowly, the claimants on the limited available rupees are countless, and since no priority system exists, long periods of time are necessarily consumed in evaluating job-creation programmes at the local, provincial and federal level before funds are provided.

Unemployment is at the root of many social problems, including the soaring crime rate. There is an overwhelming sense of hopelessness that comes when a person’s efforts to find a job comes to naught. Inevitably, there is despair and a deep resentment of a society which many jobless people feel has turned its back upon them.