scheme, more laptops
The prime minister, in his second address to the nation, has announced six different schemes for the youth worth Rs 20 billion. These are mostly aimed at creating self-employment at a time when the unemployment rate is constantly on the rise. The six schemes include: micro interest free loans, youth skills development scheme, small business loans, provision of laptops, youth training and reimbursement of fees.
The announcement is not out of the blue; to be fair to him, the prime minister had promised the youth jobs and loans and laptops during his election campaign. Election, of course, had different dynamics and such campaign promises were seen as a winning strategy used by the PML-N to offset the popularity of PTI among the country’s youth.
Now is the time to fulfill those election promises. Like all political governments, the PML-N is eyeing a clear victory in the next general election, if not the forthcoming local bodies’ polls. But there are a few questions regarding the availability of funds and the economic rationale behind such schemes.
Ironically, the PML-N government which is said to have the ability to manage the economy better has not proved it thus far. It has a history — of badly managed projects that cost the economy heavily but somehow with little political costs. The yellow cab scheme of the 1990s may have been a bad memory for the banking sector but its next tenure in the biggest province Punjab was again characterised by the hastily executed Metro Bus Project and laptop schemes worth billions of rupees.
Even though it is difficult to conclude that the PML-N was rewarded in the last election for these two megaprojects, many more such political tools are now being doled out for free. It is too early to judge the impact of these projects, touted as incentives for self-employment, but in today’s Special Report we have spoken to experts and stakeholders in various fields to gauge it somehow. We have conducted this exercise to bring forth the impending problems and suggest improvements if possible at this stage.
On May 9, 2013,
Prime Minister Nawaz Sharif, while concluding his election campaign, had
promised the youth to give them jobs and laptops so they can progress in
practical life. After becoming the PM, Sharif unveiled his initial plan for
the youth, announcing six different schemes for youth worth Rs20 billion.
The six schemes include:
micro interest free loans, youth skills development scheme; small business
loans scheme, scheme for provision of laptops, youth training scheme, and
scheme for reimbursement of fee of students from the less developed areas.
The major part of the programme, which was supposed to start in late 2013,
will be starting in January 2014 now.
The prime minister has
directed that 50 per cent loans should be reserved for women in the micro
interest free loans scheme and the procedure for acquiring loans should be
made simple with the shortest possible time for release. He has also
directed that youth from less developed areas, including Balochistan,
Gilgit-Baltistan, and Pakistani-administered Kashmir be given priority in
According to officials in
the PM’s secretariat, the scheme for reimbursement of fee of deserving
students will commence from mid-November, while loan scheme for the youth
will start at the end of the current year. Also, 100,000 laptops will be
distributed to youth across Pakistan from January 2014 onwards. The total
declared cost of the schemes is Rs20 billion at least for now.
Dr Rashid Amjad, an
economist and director of Graduate Institute of Development Studies (GIDS),
says such plans have been made to eradicate the socio-economic problem of
Pakistan — that is unemployment. “Unemployment is creating unrest
amongst the youth. So, if we can find employment for them we can also have
demographic dividend. In this connection, any initiative is important.”
Although Dr Amjad believes
providing self-employment and targeting the eligible youth is a good step in
principle, he suggests two things: “First, such schemes need to be
well-targeted and transparent and its impact should be properly monitored.
Secondly, we must understand that this direct intervention will only provide
employment at a small level. For best results, the security and energy
situation must be improved.”
He says the government
must ensure these loans are granted on concessional rates, targeting
But can the PM’s youth
schemes be seen as a long term policy?
Political economist, Dr S.
Akbar Zaidi, in his 2012 research paper on youth and Pakistan, says if the
state fails to harbour this increasing youth in the country and provide jobs
to them, it will be mounting to pave the way for instability, possibly even
anarchy. He points out that the number of people in the young age group
(15-49 years) and the total labour force are projected to nearly double by
2050, which needs a growth strategy that focuses on creating employment and
have high employment elasticity.
Dr Kaiser Bengali, an
eminent economist, is unsure if these schemes will contribute significantly
to the economy and employment rates. “First, there was no clear mention of
such allocations in the federal budget for the current fiscal year. Second,
the economic impact of such schemes is zero,” he says.
He adds unemployment is
not because people don’t have money but because they don’t have jobs.
It’s an issue of demand and supply. “There is a serious problem in the
supply line of jobs. The government is strengthening the supply side.
But there is no increase in the demand side. There is no selling
point for them in a situation where industry is already suffering from a
crisis. We need to create a macro-economic framework. Jobs will be created
through the formal industry.”
Bengali informs such
schemes were started in the late 1980s but they all failed to create a
positive impact, except giving moments of pleasure to the politicians —
“The assumption is that these youth will do business with this amount but
there are no buyers”.
In Bengali’s view, such
schemes will not create any impact — “And even women amongst them will
benefit less from these schemes. Besides broadening macro framework, there
is a need to review the industry tax rate and bring investment in the
country making the environment conducive.”
Pakistan Bureau of
Statistics 2011, shows the rate of unemployment at 5.7per cent in the
country, which is more than Central Asian and Latin American countries. One
out of every 10 people of the country’s population adds to the pool of the
The unemployment rate
increased from 6 to 6.5per cent during the October-December period of 2012,
according to the latest Labour Force Survey for the second quarter of
2012-13. In urban areas, the unemployment rate increased by 2per cent to
10.1per cent in the past fiscal year. While unemployment in rural areas
increased to 5per cent from 4.3per cent, which indicated an alarming
increase in the unemployment rate.
scheme, more laptops
Punjab government initiated its first round of laptop distributions in 2012.
A year later, the PML-N government, now also in power at the federal level,
has announced another such scheme for students all over the country.
The assumption behind this
announcement seems to be that the scheme served its purpose at the
provincial level. The purpose,
as declared by the government, has been to expose the youth to the
Information Technology and help them handle the latest technologies,
exploring alternate avenues of acquiring education and knowledge. The recent
announcement by the government is part of a larger scheme to create
self-employment opportunities for the youth.
The prime minister
announced that the distribution of laptops will begin in January 2014. No
schedule has yet been planned out. According to an HEC official who did not
want to be named, initial meetings with the finance ministry have begun to
plan the distribution and the outreach of the scheme has already been
limited. “In initial meetings, the number of laptops has been reduced to
five lakh from one million, while three billion rupees from the federal
budget have been allocated to this scheme.”
There is no concrete data
or research available to prove the need for laptops. The debate over the
effectiveness of this scheme continues. Sohail Naqvi, former Executive
Director of HEC and currently Vice Chancellor of LUMS, thinks laptop scheme
addressed the need of the students. “A lot of students in campus carry a
backpack, so they are clearly using the laptops,” he says.
Naqvi agrees with the
belief that laptops have helped students explore different means of
acquiring education simply by making it more convenient for them.
“Computer labs are becoming obsolete,” he argues, “Now people just
connect to the Wifi because it gives them more mobility. Laptops are also
more effective in the Pakistani environment since we have electricity
Students seem to agree
with this notion. A student of the University of Engineering and Technology
(UET) and a laptop recipient, Syed Ali Sultan, seconds this view, “It has
immensely helped many of our students in making assignments and
presentations individually. Now work can be divided among students and they
can work individually at home or in their rooms.” The general belief among
students is that a laptop is handy and has helped them in all aspects of
their education. “It works with most of our softwares for the engineering
education,” adds Haider Shehzad Malik, also a graduate of UET.
Anum Lasharie, a graduate
of National College of Arts, who also received the laptop, says, “While
the specifications of these laptops aren’t such where you can do
graphic-oriented work on them, it still has helped a large number of
students in written assignments. I know friends who could not have afforded
a laptop otherwise and now use it at work, so it has been helpful that
It is obvious that laptops
distributed by the chief minister have made things more convenient for the
students. The question, however, remains that in a country with limited
financial resources and a multitude of chronic problems, is this the only
way to encourage the youth and introduce them to IT?
Rasul Bakhsh Rais, a
political analyst, criticises government spending, saying, “Such schemes
should aim towards public ownership rather than private ownership, an idea
missed entirely by the government.” He also adds, “Having a laptop
doesn’t guarantee that the youth will automatically be more prone towards
IT. Today’s generation is already computer-literate since it has so many
avenues like private internet café’s to access to technology if they want
to do so.”
The proponents of this
scheme argue in its favour, declaring it a success while those who believe
it a waste of resources continue to argue so. Amid this debate, the
government has announced another scheme of laptop distribution without any
concrete research or data, showing the need of such a scheme or the
effectiveness of the one carried out at the provincial level.
economist, Asad Sayeed, disagrees with the entire idea of the Punjab
government, declaring the scheme “a political ploy to counter the youth
slogan of PTI.” This view has been put forward by many who believe the
scheme to be a strategy to win over the political alliances of the youth.
“It cannot create self-employment because the market here is not such and
opportunities on the internet are fairly limited.”
“The purpose of the
scheme,” he says, “is focused on a small but powerful segment of the
society which not only has an opinion but can easily voice that opinion
through the social media.”
Even on this front, there
is no concrete evidence of the scheme succeeding. Most students could
recognise the gimmick and, while they accepted the gift from the chief
minister, they still refused to change their opinion of the PML-N or the
“You cannot say how
effective it has been as a political tool, since there are various political
realities that have an impact on the voting behaviour,” Asad says.
announced small business loan scheme seems to have given a ray of hope to
hundreds of thousands of people who are struggling in life for economic
reasons. The scheme takes care of educated youngsters who want to start
their own business but cannot do that due to shortage of funds.
The proposed loan amount
will range from Rs0.5 million to Rs2 million and 50 per cent of these loans
have been reserved for women. The rate of interest on these loans will be 8
per cent, the debt-equity ratio will be 90:10 and they will have to be paid
back in 7 years. All Pakistani men and women between the ages of 21 and 45
will be eligible to avail this scheme provided they have the required
As per plans, around
350,000 people would be given business loans, which would ultimately benefit
about 10 million people throughout the country.
So, what is this
entrepreneurial potential and how will it be checked? This question becomes
more important in the light that most of the applicants will be taking the
first major business initiatives of their lives. Besides, there is a need to
determine the scope of self employment in the country and how much it can
help in tackling unemployment.
Monis Rahman, CEO of the
jobsite Rozee.pk, believes self-employment and entrepreneurship are the only
solutions to the economic woes of the jobless youth. His point is that an
entrepreneur employs himself on the one hand and, on the other, creates more
jobs to run the business venture he launches.
He says 54 per cent of
Pakistan’s population is under 18 years of age and 60 per cent of them are
under 30 years of age. The demographic forecast suggests that in the next
five years the number of people within the age bracket of 18 to 23 years
will be around 30 million. Of these, only 5 million will have access to
education whereas the remaining 25 million will be without education and
skills required to get employment. “We will have to plan today to tackle
entrepreneurs as people who can think out of the box and generate unique
business models. They have an eye for business opportunities that may remain
hidden from ordinary people. However, he adds, imparting required skills and
education, exposure, provision of required resources, and counseling have a
great role in the development of one’s entrepreneurial skills.
There are endless cases
where Pakistani entrepreneurs are teaching students worldwide through Skype,
etc., and offering accounting and data entry services, medical advice,
designing and web development services.
This brings one to the
question of rationality of the prime minister’s business loan scheme for
Hafiz Mohammad Yousaf,
former Vice President, Institute of Chartered Accountants of Pakistan (ICAP)
answers this, saying some important matters will have to be taken into
account to make it a success.
For example, he says, only
those applicants should be accommodated in the scheme who have a certain set
of skills and know about the business cycle of the project they are
interested in. If these things are missing, the applicants should be asked
to attain them or the government should provide the training.
He believes the government
should simply identify sectors where the potential of investment exists and
should not leave it to the people to decide by themselves. Different
projects should be suggested for urban, semi-urban, rural and semi-rural
Yousaf suggests that those
who avail these loans should try to become part of the supply chain of
booming industries, such as energy, textile, dairy and milk processing
industries. This way, they will not have to worry about marketing the goods
they produce. In short, one can say the government should take
responsibility of developing the entrepreneurs’ linkages with the market.
Otherwise, the effort will go waste as Rs2 million is not enough amount to
set up a totally independent and self-sufficient business.
He gives example of the
textile industry where women can buy industrial stitching machines and set
up units at home. There are lots of orders which they can get from
Industrial Garment Stitching (IGS) units, the owners of which save overheads
by outsourcing their work.
Yousaf hopes that this
time the chances of loans issued on fake documents will be less as it is
impossible to impersonate in the presence of reliable Nadra database.
“However, human intervention is there when it comes to screening of
suitability of candidates and, therefore, this process should be
foolproof,” he adds.
A major development in
this case — the Small and Medium Enterprises Development Authority (SMEDA)
— has taken a proactive role by the government. On the directions of the
prime minister, it has developed pre-feasibility studies in 15 sectors, and
these studies are available free of cost on the authority’s website for
applicants of the said business loans. These sectors offer venues of
comparatively secure investment at the moment.
The feasibilities cover
projects including honey production, processing, packaging & marketing,
rose water extraction, seed oil extraction unit (rapeseed), injection
molding plastic products, interior designing & landscaping, calf
fattening, camel farming, dairy farm, fodder production & trading
company, goat fattening farm, layer farming, meat shop, veterinary clinic,
UPs and stabiliser assembling unit, shrimp farming, bakery &
confectionery, wooden furniture manufacturing unit, florist shop, and
off-season vegetables courtesy tunnel farming.
Besides, there are
guidelines for pickle production, processing, packaging & marketing,
spices processing, leather wallets manufacturing, marble & onyx products
manufacturing unit, marble tiles manufacturing unit, salt products, and
Loans will also be offered
in services sector and used to run beauty clinics, catering & decorating
services, daycare centers, driving schools, gaming zones, montessori
schools, and so on.
Punjab Vocational Training
Council (PVTC) Chairperson, Faisal Ijaz Khan, says the council is one such
body which gives modern training in skills identified by the prospective
employers, especially those from the private sector.
Citing examples, the PVTC
chairman says they are even offering courses in tunnel farming, agricultural
field work, artificial insemination for livestock breed improvement, Cisco
certifications, autocad programming, and so on.
which youth affairs fall after the 18th Amendment, have not been taken on
board for launching the youth schemes worth Rs 20b. This is claimed by
officials from the provinces.
Political opponents of
Pakistan Muslim League-Nawaz term the programme a political gimmick to
pacify the unemployed youth of the country.
“They have been just
trying to use the money to attract the youth,” says Shah Farman,
spokesperson of Khyber Pakhtunkhwa government. “The KP government has not
been taken on board by the prime minister,” he says.
Farman claims the KP
government is doing the same thing in a better way. “The PTI government in
KP has approved economic schemes of over Rs3.5 billion for the youth, with a
major chunk going to interest-free loans for jobs and self-employment
The size of loan under the
KP scheme ranges from Rs50,000 to Rs200,000. Permanent residents of KP
holding valid computerised national identity cards and having age limit of
18 to 50 years can apply for loan.
“If the prime minister
was serious about the youth, he should have announced funds to the youth
affairs departments of the provinces,” he says.
The Sindh government has
already initiated the Waseela-e-Haq Scheme worth Rs12 billion for the
jobless youth, which is aimed at providing self-employment opportunities to
over 35,000 jobless youth in the age group of 19-35 years with a minimum
qualification of matriculation. The approved businesses for loans range from
transport to cattle-raising and from auto-workshop to pharmaceutical
business. The loan is given to an applicant selected through the draw.
Interestingly, the youth
affairs ministry in Punjab is also not aware of the details of the project.
“We have not received anything about the prime minister’s youth scheme
yet. We do not know how it would be delivered and through which
department,” says a senior official of the Punjab government on the
condition of anonymity. “The measures related to actually activating the
youth department are under process in Punjab. There are two groups in the
department — bureaucrats who want to establish a youth directorate because
it would give them authority, while the second group wants to establish a
foundation or a commission.”
“Some donor agencies
have shown interest to invest money in the youth department,” he says,
adding, “None of the youth-related schemes in the past was implemented
through the department. This is for the first time that the department has
been asked to look into matters related to internship programmes for youth.
The infrastructure of the department would only be developed if political
governments show the political will.”
Though the projects about
youth should be ideally implemented through provinces it should be seen if
provinces have the infrastructure to launch such schemes.
Youth affairs in all
provinces are still managed by sports departments. Only Sindh has
successfully constituted youth affairs directorate but it has its own ethnic
dimensions. The directorate mostly looks into issues related to urban youth
while matters of rural youth in Sindh are dealt under the Waseela-e-Haq
Scheme as part of Benazir Income Support Programme (BISP) initiative.
The provinces, except
Punjab, have not yet finalised the youth policy. Even in Punjab, a youth
festival is arranged by the Sports Department. “Schemes for youth are a
good initiative. PML-N has a relatively good track record on such schemes in
Punjab,” says Iqbal Haider Butt, a Lahore-based expert on youth affairs
who has been involved in preparing youth policies in Punjab and other
“There are some serious
infrastructure-related problems in youth departments in provinces. We have
suggested establishing youth foundations, instead of youth affairs
directorates, in the provinces,” he says. “Bureaucratic structure of
directorates is very traditional that slows down the process while
foundations have different rules of business and they also involve political
youth-related affairs in provinces are divided among education, sports, and
social affairs department. We need to make it a one window operation,”
Since the state does not
have jobs for the youth now, it has been focusing on providing loans and
training, which is good in a way and may develop entrepreneurship in
Pakistani youth. But the government should also focus on establishing
infrastructure for the purpose,” he concludes
second Butt’s opinion. Syed Abdullah Jan, a senior official of the
ministry of environment, sports, and youth affairs of Balochistan, says
youth affairs department in his province is not a priority. “We have no
infrastructure. It is an allied department of the ministry of
environment,” he says, adding, “The federal government has not shared
any details of its youth programme with us. We have not received any
information on the schemes and do not know who would implement the programme
in Balochistan,” he says.
and semi-skilled workers, who are part of the labour force of the Middle
East and Gulf regions, send money to their families as well as invest in
different sectors, including the real estate.
Pakistan is likely to
receive $14 billion in foreign remittances this year, which would be higher
than the figure recorded last year. The figure is high despite the fact that
a large amount of money reaches the country through illegal non-banking
channels, including hawala and hundi. These foreign remittances are a
lifeline for the country, which has to struggle hard to keep its foreign
reserves at a strategic level. Of all the remittances received, it is
estimated that between 70 per cent to 80 per cent of them arrive from the
Middle East and Gulf regions.
Looking at the spread of
Pakistani labour overseas, one finds the country has not succeeded in
exploring new markets over the years. The areas of concentration are still
the Middle East and the Gulf, which opened their markets to foreign manpower
in the wake of oil sector boost in the early 1970s. Malaysia and South Korea
have also marketed job opportunities for Pakistani manpower but the success
of these initiatives has been limited due to various reasons.
“However, over the
years, these markets have also opened up for highly qualified categories in
the fields of education, medicine, accounts, finance, education, agriculture
and so son,” says Monis Rahman, CEO of rozee.pk, a job website in
Pakistan. Pakistani doctors and paramedics have always been in high demand
and the situation is the same even now.
He says, currently,
manpower with skills and qualifications in computer software and hardware,
computer designing, masonry, air-conditioning and refrigeration, welding,
fabrication, carpentry, butchery, plumbing, electronics, tailoring and other
trades is largely present in these markets.
He believes the
country’s youth should get training from vocational and technical training
institutions, instead of getting general education which does not offer much
in terms of employment opportunities.
Rahman says jobs of a
large number of overseas workers are in danger due to their immigration
status, especially in Saudi Arabia. The country has asked all the immigrants
who are working with employees, other than those mentioned on their work
permit, to leave the kingdom. Besides, the companies that have not employed
local Saudi men in required numbers are to lay off foreign workers. “These
decisions have affected Pakistanis too and many of them have rectified flaws
in their immigration status,” he says.
Overseas Employment Corporation (OEC) has announced its plans to eye job
markets in the Far East and African countries. The corporation has focused
on South Korea and Malaysia where Pakistani workforce can be accommodated to
a great extent.
Pakistani workers can earn
around $ 1400 per month in South Koreas whereas food and housing are the
responsibilities of employers. The employers have often complained about
difficulties in getting halal food and fulfilling religious requirements of
Pakistani workers, which are issues that need to be resolved.
Similarly, Malaysia has
shown willingness to import Pakistani manpower in manufacturing,
construction, agriculture (rubber plantation), services and deep-sea fishing
Ijaz-ul-Haq, publicity and
advertisement officer at Overseas Pakistanis Foundation (OPF), believes
though Pakistani workers are contributing to economies of dozens of
countries, including the US, Canada, Australia, etc, the markets where they
can formally be exported are limited. They reach the above-mentioned
companies on their own through different methods, and once settled there
find jobs. The visa requirements are the biggest hurdle in exporting
manpower to these countries.
Shaqat-ur-Rahman, head of
the research and development (R&D) cell of Punjab Vocational Training
Council (PVTC) says the council designs its training programmes as per needs
of the local and international job markets. “For example,” he says,
“they are training a large number of students in welding, fabrication,
refrigeration, etc, as there is a huge demand for these trades in Qatar. The
country is rebuilding its cities for FIFA World Cup scheduled to be held at
Doha, Qatar in 2022 and need skilled labour in a large number for this
— Shahzada Irfan Ahmed
Young people are
left to their own devices, or to those of their familial networks, to find
gainful employment. These networks need to be replaced by modern channels
that guide the youth during their entry into the job market.
Munir Rajput, an admission
and placement officer at the Punjab Vocational Training Council (PVTC) in
Greentown, Lahore, feels that there is a tremendous gap between higher
education and the job market in Pakistan. “Higher education in Pakistan is
not geared towards the needs of the economy. The economy needs more
technically qualified people while the universities are focused more towards
“A student with a
bachelor’s degree in business has the same starting salary as someone who
has taken a course in computer graphic designing after high school. However,
young people and their parents don’t know this and spend a lot more on a
college degree that does not provide the returns,” he says.
“What is needed is more
investment in technical education and career counseling as there is a lot of
scope in IT-related fields that is not being properly met by the current
The vocational training
council, for which Mr. Rajput works, was established by the government of
Punjab in 1998. It uses Zakat funds to provide vocational training and
career services for some 15,000 Zakat-eligible young students who haven’t
been able to complete their formal education. It helps them choose career
paths based on their interests and feasibility, trains them to gain the
necessary skills for their chosen career, and then helps them find a job.
The council also follows their progress for the next four years.
Rajput believes there are
a lot more young people who need vocational training and career counseling
than is currently possible within the training council’s resources.
However, he believes that the Sharif administration understands that and is
working to expand such programmes.
Monis Rahman, CEO of
Rozee.pk, says their website receives some 40,000 job applications a day. It
also features more than 60,000 job postings from small and large employers
across the country.
The website also has a
career counseling section in which it posts articles, giving career advice
and answers questions sent by users on their career-related issues.
According to Rahman, the internet is a very useful tool for people since
institutions are not doing enough to guide and support young people.
“Apart from a few universities, most other higher education institutes do
not have proper placement offices to help students understand their career
options,” he says.
— Ali Ahsan