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August 29, 2018

Ten million jobs


August 29, 2018

The provision of decent employment remains the core agenda of any government around the world. The significance of decent employment opportunities in promoting economic development is emphasised by the Goal 8 – “promote inclusive and sustainable economic growth, employment and decent work for all” – of the sustainable development goals (SDGs).

This goal aims to “achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value” by 2030.

Recent statistics provided by the World Bank demonstrate that the working-age population will increase by 250,000 every month in Pakistan. Over 1.4 million additional jobs will be needed every year to absorb new entrants to the labour market and keep the employment rate constant.

To fill this demand, the PTI government has promised to create 10 million jobs over five years through cross-cutting initiatives led by the private sector in SMEs, housing, health, education, the green economy, tourism and ICT.

Two major reforms – revamping the technical and vocational education, and offering employment guarantee schemes for the bottom-of-the-pyramid with a focus on women and rural areas – have been proposed to achieve the 10 million jobs target. The government needs a comprehensive two-pronged strategy to achieve its target.

On the economic front, high and inclusive growth and a stable macroeconomic environment are the prerequisites to generate employment. According to the World Bank report, titled ‘South Asia Economic Focus, Spring 2018: Jobless Growth’, there is a positive association between economic growth and employment creation. To accommodate all new job-seekers, the government should have to maintain inclusive economic growth of over 6.6 percent. Macro-stability is essential to enhance investor confidence to boost investment – a key determinant of economic growth. It helps to attract investment in long-term projects.

High fiscal deficits, rising inflation and volatile exchange rates are the stumbling blocks to achieving stability in the long run. The government should seek to maintain stability by fixing budget deficits, inflation, and exchange rate. These measures not only encourage foreign direct investment (FDI) but also boost private sector-led growth. The government has realised the role of the private sector as a fundamental pillar to generate employment.

In addition to inclusive GDP growth, Pakistan can generate employment through two sources. First, promoting overseas employment can be instrumental in generating around 0.5 million jobs every year. According to the Bureau of Emigration and Overseas Employment (BEOE), more than 10 million Pakistanis have gone abroad to work since 1971. The Gulf Cooperation Council (GCC) countries, primarily Saudi Arabia and the UAE, are the main destinations.

During the year 2015, 946,571 Pakistani went abroad for employment purposes. However, the last three years have observed a decreasing trend. The BEOE figures reveal that 839,353 Pakistanis went abroad for employment purposes in 2016 and 496,286 Pakistanis settled in other countries to work in 2017. Only 185,458 Pakistanis went abroad to work in the first six months of 2018. In order to harness the potential of overseas employment, the government should introduce critical reforms in the overseas employment process.

The government should design and implement a migration policy. The BEOE has already drafted a migration policy. It should be reviewed and implemented on a priority basis. There is a need to rationalise the visa cost paid by migrant workers. Though the official visa fee is very low and ranges from Rs7,800 to Rs16,000 on average, a migrant pays Rs3,62,856 for overseas employment. Overseas employment promoters (OEPs) play a vital role in overseas employment and are often the main beneficiary of this exploitation.

Meanwhile, the Overseas Employment Corporation (OEC), which is mandated to promote overseas employment, has failed to deliver its objectives. The government of Pakistan is investing a large number of public resources on the community welfare attache (CWA) posted in destination countries to find new jobs and ensure safe employment. However, the working conditions in the destination countries and declining trend in overseas jobs raises questions about the CWA’s performance. This calls for reforms to reduce migration costs and promote safe migration – an objective of the SDGs. We must redefine the role of the OEC with assigned targets under the carrot and stick approach.

The performance of the community welfare attaché (CWA) should be monitored on a regular basis. The active role of the OEC and the CWA helps to reduce migration costs and promote safe migration.

Skill composition remains a major issue with Pakistani workers. The BEOE’s official estimates show that a majority of them are either unskilled and low/semi-skilled workers who fall within the low-paid category. The government should introduce a mechanism to produce skilled and professional workers according to the need of destination countries. In this context, the Ministry of Overseas Pakistanis and Human Resource Development should liaise with technical and vocational training institutes to equip the labour force with required skills.

Second, graduation schemes for the ultra-poor are quite effective in generating self-employment. Over 0.2 million unskilled and the ultra-poor families can be provided self-employment every year. The graduation programme was started by the NGO BRAC in Bangladesh. It was then adopted in numerous countries in Africa, South Asia and Latin America with country-specific interventions.

Pakistan needs to design a comprehensive graduation programme to provide decent jobs to the ultra-poor. The programme should cover various complementary components, including assets transfer, cash assistance, skill development, consumption support, health insurance, financial inclusion, and addition in the market value chain.

The design and implementation of programme should be area-specific to reap the potential benefits of local markets. Local needs have to be assessed before launching any programme. For example, hoteling would be an ideal trade for the ultra-poor living in districts close to highways, CPEC routes and motorways.

In essence, these two measures along with high economic growth can ensure employment opportunities for professional, highly skilled, skilled, semi-skilled, and unskilled manpower. Institutional reforms will help in restructuring and improving employment opportunities. Coordination is required among various stakeholders – ministries, technical institutes, the private sector and “new entrants” in the job market – to create 10 million jobs in five years.

The writer is the director of research at the Benazir Income Support Programme (BISP).