Employment Strategy, Problems and Policies

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Employment is very dynamic and multi dimensional subject hence requires a multi pronged strategy to deal with it. The employment strategy is based on high job turnover, economic and social security of employees and labour activation policy (skill up gradation of the unemployed). Broad-based growth should create productive employment opportunities for all groups of people, including young people.

It is necessary to generate sufficient employment opportunities for all new entrants to the workforce as well as to absorb the current numbers of unemployed and underemployed. To provide enhanced job opportunities for young people through increased investment in education and vocational training, adequate employment opportunities and leisure time activities for youth to make them economically and socially productive. It needs strategies and policy recommendations to maximise the effectiveness of the government's initiatives for employment generation and rural prosperity.

In order to achieve the targeted 4 per cent unemployment rate by generating 6.89 million additional jobs, there is a lot that needs to be done. These strategies have been worked out on account of which the unemployment rate has reduced to 5.32 per cent (Labour Force Survey, 2006-07).

Many programmes for employment generation and skill development such as micro credit schemes have been implemented through financial sector, employment schemes by the government like President's Rozgar Scheme, National Internship Programme, establishment of National Vocational and Technical Education Commission (NAVTEC) at national level and Skill Development Councils at provincial level have been launched. Apart from these programmes several agreements for manpower export and technical cooperation have been processed and signed with different countries to boost overseas employment. However, in order to keep this process going along with the quality output several interventions and new initiatives are required.

Overall employment situation in the country continues to draw attention in economic and social policy-making. The current employment situation in Pakistan could be better; however, due to the electricity shortage less job opportunities are generated. The ratio of employment generation between rural-urban is 69:31. The unemployment amongst youth has been quite high, despite the fact that the unemployment rate has decreased from 6.2 per cent in 2005-06 to 5.3 per cent in 2006-07.


(i) Pakistan is facing various problems of unemployment, especially has been facing difficulties as regards the decent work. The policy feed back sometimes is not up to the mark due to lack of adequate data, lack of effective coordination, lack of market based training and development and bottlenecks in rural areas.

(ii) Mismatch between education and employment: the number of employment opportunities is not keeping pace with the growth of the workforce, the type and quality of these opportunities does not match the expectations of many educated job seekers, which reflects inadequacies both in the type of employment generated and type of education being imparted to youth.

(iii) Lack of technical education/ occupational skills: our technical and vocational training system have the capacity of three hundred thousands persons annually, which is grossly insufficient to impart skills to new job entrants as well as the huge number of current unskilled workers. At the other end of the labour spectrum, it is increasingly difficult to obtain workers with basic skills in carpentry, masonry, electrical, mechanics, and many other trades.

Absence of reliable information on the actual growth in employment by specific occupational categories makes it difficult to determine either the number of jobs being created in each field or the unsatisfied demand for various types of skills. It needs a comprehensive survey of training needs in the country. Vocational training system provides opportunity to the poor segment of society to get employable skill through training. It ensures the masses a decent and remunerative work opportunity while on the other hand a properly operative vocational training system provides the quality work force.

(iv) Export of manpower/ tougher competition and certification: in order to explore the new avenues to materialise the competitive advantage of the constantly growing labour force, on the manpower export front Pakistan is facing the sever competition of cheap labour by neighbouring countries.

Certification is another problem; although private sector is playing a vital role in the export of manpower, but generally, the workers sent abroad for employment through Overseas Employment Promoters (OEPs) are not according to the standard demanded by the foreign employers.

Heavy cost of foreign employment: since the employer's behaviour is profit-oriented not welfare-oriented, therefore, they don't provide work visas free of cost. As such, the licensed OEPs have to purchase the work visas from the employers of the country of destination; thus the amount incurred on work visas has to be borne by the emigrants.

(v) Rural urban migration: since high rates of urban unemployment would almost invariably lead to rising discontent and violence, more attention has to paid to this aspect. Instability of urban environment suggests that the urban economy is generating insufficient employment opportunities to absorb most new entrants and migrants from rural areas. Therefore, it is relatively necessary to do something in the rural areas for employment generation to stop migration towards urban areas.

(vi) Women employment: women and unemployed youth are also two major issues, which require special attention of the policy makers to foster their employment prospects. Women constitute 48.6 per cent of the population, women participation rate in the labour force has increased from 6.5 per cent during 2005-06 to 6.6 per cent during 2006-07. The women unemployment rate has also substantially decreased from 9.4 per cent in 2005-06 to 8.4 per cent in 2006-07. The unemployment rate among females is 8.4 per cent as compared to unemployment rate for males of 4.5 per cent during 2006-07. The government has given the priority to the woman sector and initiated a numbers of programs and projects for women in education, training and skill development and also for facilitating income generation activities for women.

(vii) Unemployed youth: the problem confronting youth is that despite the education, they fail to get a job. The young females in Pakistan continue to be at a disadvantage in the pursuit of education as well as employment compared to young males. The economic cost of unemployed educated youth is high, because expenses on their education and training are wasted.

(viii) Agricultural employment: workforce employed in agriculture is also continues to decline, though at significantly slower rates. A reduction is due to mechanisation. The strategic initiatives to modernise and diversify agriculture sector can generate employment opportunities for very large numbers of people, and provides expansion of employment potentials in other sectors.

(ix) Service sector: the economic development was a progression from agriculture to manufacturing to services. Recent development in IT and IT-enabled services is only one indication that this formula need not necessarily apply in the context of today's global economy, where the demand for services internationally can rapidly expand employment opportunities domestically. Research is required to more carefully document growth of the service sector, particularly its informal portion, to assess the potential demand and most effective strategies for accelerating growth of employment.

(x) Informal sector: the informal economy workers are skilled workers, but since they have acquired their skills in informal ustaad-shagird arrangements, their skills are not recognised. Informal sector is present both in rural and urban areas, but expansion is rapid in urban areas as compared to rural areas and mostly females have produced a bigger slice of this expansion. The informal sector is difficult to estimate because of non-recording of activities falling in the informal sector. Therefore reliable data is difficult to obtain on the size of this sector. The LFS 2005-06 estimates that 72.9 per cent employment is in informal sector as compared to 2003-04 when it was 70 per cent.

How to regulate

As the informal sector plays a significant role in employment and income generation in Pakistan, a comprehensive system of statistics on the informal sector activities is essential for macroeconomic analysis, policy formulation and evaluation, and for the integration of the informal sector into the development process. The quantitative information on the contribution of the informal sector to various aspects of economic and social development, including employment creation, production, income generation, human capital formation and the mobilisation of the financial resources will be helpful in the designing and monitoring of specific support policies and assistance programs for the informal sector. This way, it will be easy to regulate to increase the productive potential and employment and income generating capacity of informal sector units, improving the working conditions and social and legal protection of informal sector workers, developing an appropriate regulatory framework and promoting the organisation of informal sector producers and workers such as women, children, rural urban migrants or even immigrants.


It is observed by the ministry of labour and manpower that existing child labour units at the federal and provincial levels need to be strengthened by assigning more technical staff and providing financial resources. The activities of rehabilitation including providing skill development and non-formal educational facilities; health care services; linking of child labour families to the social safety nets and poverty alleviation programs; and involvement of district governments in addressing the issue to ensure sustainability and continuity of efforts require sufficient financial resources. A fund for ‘education of working children and rehabilitation of freed bonded labourers' has also been established.

The shortfalls in decent work objectives for young people in areas such as productive work, social security and dignity at work, therefore policies are needed to address the educational and employability skills needs of young women and men. It should also be developed to reduce vulnerable employment and to ensure decent employment for young people who are working "excessive" hours, especially in trade and transport sectors.

Self-employment schemes

Various employment generation schemes have been started along with the existing ones. It is recommended that schemes such as President's Rozgar scheme an additional provision for self employment may be added in order to accommodate the persons who have the skills but don't have the financial resource to start their own businesses. In this context it is strongly advocated that women and disabled persons may be encouraged and their quota in such type of schemes may be fixed as half and 2 per cent of all beneficiaries respectively.

National internship programme

The recently introduced National Internship Program may be extended to private sector as well, to accommodate unemployed graduates.

Gender policies are of vital importance in the labour market. It is important that the momentum in reducing gender gaps is maintained

Involvement of the private sector

Private sector employers should be encouraged to establish their own training institutions by providing incentives in the shape of tax rebate or duty free import of machinery etc

Information technology policy

The importance of human resource development in the overall scheme for promotion and use of information technology is of paramount importance for the development of the country, both in public and private sectors, so as to make Pakistan recognised as a major player in the field. It is recommended that different training programs may be arranged to equip the manpower to compete in the international labour market.

Reduction in overseas employment cost

There should be reduction of overseas employment cost along with the elimination of the role of the middle men and sub agents in order to make access easy to the countries of employment.

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