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Wednesday February 12, 2025

How to tackle unemployment through inclusivity

By Mansoor Ahmad
January 26, 2025
The representational image shows women working at a garment factory. — AFP/File
The representational image shows women working at a garment factory. — AFP/File

LAHORE: Unemployment and the gender employment gap remain critical challenges in Pakistan, demanding targeted policies and efficient use of limited government resources. To address these issues, planners must prioritize labour-intensive sectors and promote inclusive economic growth.

The primary hurdle for policymakers is the scarcity of resources. It is essential to focus on programmes that generate maximum employment at minimal costs. By emphasising labour-intensive industries, improving education, and securing international support, Pakistan can significantly reduce unemployment and close the gender employment gap.

The construction sector, being one of the most labour-intensive industries, should be promoted through public-private partnerships. Affordable housing, road infrastructure, and renewable energy projects can create jobs not only in construction but also in associated sectors.

Value addition in agriculture, such as food processing, storage facilities and export-oriented initiatives, can unlock untapped potential. Currently, Pakistan exports raw agricultural commodities, which could yield much higher foreign exchange with minor processing efforts. This approach could also absorb surplus non-farm labour, shifting workers from low-productivity agricultural tasks to higher-value activities.

Small and medium enterprises require focused government support, especially those outside the textile sector. In textiles, the value-added segments, like apparel, generate the majority of exports and are the largest employment providers after construction. Unfortunately, government policies often favour spinners and weavers, sidelining the apparel sector. Support for SMEs in finding markets, expanding operations, and accessing financing on par with large players could drive significant job creation.

Policymakers should encourage non-textile SMEs in sectors like IT, sports goods, engineering products and pharmaceuticals to target export markets. Targeted incentives and market expansion strategies can generate both foreign exchange and employment.

Skill development must align with current market demands. Training programmes on obsolete skills keep workers trapped in low-paying jobs. Vocational training centres, established in collaboration with the private sector, should focus on equipping workers with market-relevant skills. Digital platforms can also play a vital role in efficiently connecting job seekers with employers.

Pakistan has struggled to effectively establish special economic zones (SEZs) to attract both domestic and foreign investment. Policymakers must expedite SEZ development, offering tax incentives and infrastructure support to industries committed to job creation. Over a decade after initiating SEZs under the China-Pakistan Economic Corridor (CPEC), not a single zone has been fully operationalised.

Pakistan lags behind its neighbours in female workforce participation. For instance, Bangladesh’s garment industry employs a large number of women, driving economic growth and social transformation. Pakistan should incentivise women’s involvement in similar industries, such as textiles and garments.

India’s policies supporting women entrepreneurs and providing access to credit have also improved female labour force participation. Pakistan could replicate these initiatives by offering subsidies or stipends for women pursuing vocational training and higher education in fields like IT, healthcare and education. Gender-sensitive training centres, along with anti-harassment policies, maternity leave and child care facilities, are essential to making workplaces safer and more inclusive.

Micro-loans and training programmes can enable rural women to start small businesses in agriculture, handicrafts, and livestock. Public works programmes targeting unemployed youth, focused on infrastructure, education and healthcare, can also help bridge the gender employment gap. Businesses achieving gender diversity targets should be rewarded with tax breaks to encourage broader participation of women in the workforce.

By implementing these measures, Pakistan can create an inclusive, robust job market that addresses unemployment, narrows the gender gap and lays the foundation for sustainable economic growth.