PAKISTAN ECONOMY

MS343
HAROON UR RASHID
School of Management Sciences
GIKI, TOPI
Fall 2022
 INTRODUCTION

OVERVIEW OF PAKISTAN ECONOMY:

A DEVELOPING ECONOMY
 ECONOMIC GROWTH

 Economic Growth is the positive change in the indicators of economy.

 It is the increase in the monetary value of all the goods and services produced in the
economy during a time period. It is a type of quantitative measure that reflects the
potential increase in the number of business transactions taking place in the economy.
 It is the increase / increment in the productive capacity overtime to bring about rising
levels of national output and income.
 Increase in GDP, Increase in real national income / national output.
 Economic growth is a narrow concept when compared to economic development.
ECONOMIC DEVELOPMENT
 More comprehensive in its scope.
 Emphasizes both economic growth and structural changes.
 Overall health, well-being, and academic level of the general population of a nation
improves. It also refers to the improved production volume due to the advancements of
technology.
 Economic development refers to the reduction and elimination of poverty,
unemployment and inequality with the context of growing economy.
 It is the quantitative as well as qualitative improvement in the lives of people of an
economy.
 Most appropriately determined by economic growth, Human Development Index (HDI),
increase in living and educational standards of the people, improved health care and
infrastructure, diversification of economy.
 CHARACTERISTICS OF DEVELOPING ECONOMY

 Burden of international debt

 Low Per Capita Income
 Excessive Dependence on Agriculture- contributes 18.9 percent to GDP and absorbs 42.3 percent of labor
force
 Unproductive uses of funds
 Inappropriate investment decisions
 Under utilization of natural resources
 High rates of population growth
 High unemployment
 Low levels of productivity
 Lack of enterprise and initiative
 Deficiency of capital
 Backward state of technology
 Dependence on export of primary products
 Glut of unskilled workers / lower levels of human capital
 Brain drain
 Government control by wealthy persons
 DETERMINANTS AND REQUISITES OF THE ECONOMIC DEVELOPMENT

 Economic factors
 1) Natural resources
 2) Capital formation: An act of saving, Capital market, An act of investment
 3) Human resources
 4) Education and training
 5) Power
 6) The means of transport and communication
 NON ECONOMIC FACTORS
 1) Social factors
 2) Political factors
 3) Administrative factors
ECONOMIC SURVEY OF PAKISTAN

HIGHLIGHTS
AGRICULTURE
SECTOR
 Agriculture sector as backbone in Pakistan economy

 Sustainable growth of the agriculture sector stands vital for food security and rural development in Pakistan.
 contributes 22.7 percent to GDP
 Employment to 37.4 % of labor force , foreign exchange earnings and used as industrial raw material.
 Environmental shield in protecting and upgrading the climate-resilient production and ecosystem.
 The improvement in agriculture production ,increase farm income, reduce consumer prices and enhance diverse food
supplies besides generating an exportable surplus.
 70 years ago, this sector as neglected both in developed and underdeveloped countries. Regarded as residual reservoir
particularly of labor for employment in industries.
 In 1960’s, its importance was realized with adequate attention given.in 1970’s balanced growth of agriculture and
industrial sectors was stressed by the economists.
 Since beginning of1980’s, agriculture in the process of development has gained significance importance.
 In 1960’sDuring the post COVID-19 period, the steep rise in the price of various commodities further enhanced its
importance for the countries who are net importers of food items.
 the Government encourage financial inclusion activities in the agriculture sector to adopt new approaches in order to boost
the productivity and exports, thus enhancing a rural development-driven economic growth.
Agriculture Performance during 2021-22
 Remarkable growth of 4.40 percent and surpassed the target of 3.5 percent and last
year’s growth of 3.48 percent because of attractive output prices and supportive
government policies, better availability of certified seeds, pesticides and agriculture credit.
 Crops sector outperformed and posted a growth of 6.58 percent during 2021-22 against
5.96 percent last year.
 Livestock having share of 61.89 percent in agriculture and 14.04 percent in GDP, recorded
a growth of 3.26 percent in 2021-22 compared to 2.38 percent during same period last
year.
 The fishing sector having share of 1.39 percent in agriculture value addition and 0.32
percent in GDP, grew at 0.35 percent compared to growth of 0.73 percent in same period
last year.
 Major crops of Pakistan

 The major important crops of Pakistan are:

 Wheat: staple crop and it ensures food security of the country, as principal food crop,
 Wheat is cultivated over 22 million acres and accounts for 7.8 percent of the value added in agriculture and 1.8
percent of GDP.
 Wheat is a strategic crop and any shortfall in its production can create an awkward situation leading to political
uncertainty,
Maize

 Food grain, raw material for edible oil, poultry food mixes.
 Maize contributes 3.2 percent value added in agriculture and 0.7 percent to GDP.
 The increase in production was mainly due to increased sown area, availability of
improved high yield seed varieties, favorable weather conditions and better economic
returns.
Barley and gram production

 Barley: Coarse grain, grown in dry conditions.

 Production 42000 tones equivalent to last year Production .
 Gram: Important source of vegetable protein for diet.
Cotton

 Pakistan is 5th largest producer of cotton in the world.

 Important cash crop, Export of cotton and textile products share around 60 percent in
overall exports of the country.
 It contributes around 0.6 percent to GDP and 2.4 percent of the value added in agriculture.
 Sugarcane
 Great significance for sugar related industries.
 2nd largest agro-based industry after textile.
 Its production accounts for 3.7 percent in agriculture’s value addition and 0.8 percent in GDP.
 Rice
 Important cash crop and after wheat and it is 2nd major staple food item consumed in the country.
 It contributes 2.4 percent of value added in agriculture and 0.5 percent in GDP.
Oilseeds

 During FY2022 (July-March), 2.754 million tones of edible oil/oil from oilseed for
crushing total value Rs 662.657 billion (US$ 3.681 billion) was imported. Total availability
of edible oil during this period is estimated at 3.214 million tones.
 Forestry, live stock and poultry
 Forestry: According to the latest findings, the country is maintaining 4.786 million hectare
(5.45 percent) area under forest cover.
 Livestock: Livestock is contributing approximately 61.9 percent of agriculture value added
and 14.0 percent to the national GDP during 2021-22. Animal husbandry is the most
significant economic activity of the dwellers of rural areas of Pakistan. More than 8
million rural families are engaged in livestock production and are deriving around 35- 40
percent of their income from this sector.
 Poultry: Poultry sector is one of the most important segments of livestock that provides
employment to more than 1.5 million people in the country.
 Problems of agriculture sector in Pakistan
 Over crowding in agriculture- Since 1980’s about 65 percent of population dependent on Agriculture. According to
2021.22 statistics even. 37.40 (Employment of labor force) and 62 percent especially rural areas rely on
Agriculture.
 Socio economic factors: Famers conservative outlook, illiteracy, superstations hinders adoption of modern
technology.
 Illiteracy / Training of Farmers
 Natural factors: Gamble of rain, if timely rain, no storms, pests attack and other calamities, its production plentiful
otherwise vice versa.
 Lack of adequate financing facilities: scarcity of financing, ZTBL, formerly ADBP and other commercial banks
loans are not accessible to all so famers rely on loans from friends relative and traditional money lenders.
 Inadequate irrigation facilities: Shortage of water for irrigation.
 Construction of Dames :Sometimes, due to heavy unwanted rains and floods agricultural productivities destroys.
To tackle this problem it is necessary to construct dames and bands on rivers
 Small size of holding: Due to law of inheritance and other factors, size of agriculture holding is decreasing.
 Water logging and salinity: Water logging and salinity destroys about one million acre of land every year in Punjab
and Sindh. It reduces our cultivable area. For this purpose, installation of tube wells, repair of canal banks and
drainage of water etc. are needed. The Ministry of Agriculture proposed to invest Rs. 18.5 billion with the
objective of converting 2,00,000 acres of irrigated land to drip and shower irrigation system.
 Various plant diseases
Problems of agriculture sector in Pakistan
(contd.)
 Low per hectare yield
 Agro-based Industries :Agro-based industries like poultry, fisheries, dairy and livestock
should establish. These industries indirectly lead to improve the agricultural sector.
 Old methods of production / Lack of mechanization: Sowing, cultivation and harvesting of
crops through agricultural machines increase the productive quality and quantity.
 Inadequate supply of agriculture inputs
 Inadequate storage / warehousing facilities
 Inadequate research: Major agricultural colleges and universities are only about 16 in
Pakistan. Government should increase the research work in the field of agriculture.
 Lack of infrastructure facilities
 Natural calamities
 Instability in market prices
 SBP’s Initiatives for the Promotion of Agriculture Financing
 SBP has allocated the indicative agriculture credit disbursement targets of Rs 1,700 billion for FY2022
which is 24.5 percent higher than last year’s disbursement of Rs 1,366.0 billion. Currently, 50 formal
financial institutions are providing agriculture loans to the farming community, which include 5 major
commercial banks, 14 medium-sized domestic private banks, 5 Islamic banks, 2 specialized banks
(ZTBL & PPCBL), 11 microfinance banks besides 13 Microfinance Institutions/Rural Support
Programmes (MFIs/RSPs).
 For promotion of agricultural financing, some of the major initiatives taken by SBP in collaboration with
Federal & Provincial Governments are as under:
 i) Crop Loan Insurance Scheme (CLIS) & Livestock Insurance Scheme for Borrowers(LISB): CLIS has
enabled financial access for farmers, with premium for small farmers being borne by the government.
 ii. Credit Guarantee Scheme for Small & Marginalized Farmers (CGSMF): With support from Federal
Government, SBP is offering a CGSMF. This scheme can be availed by banks for providing loans to
small farmers, with default protection of up to 50 percent. Under this scheme, loans of Rs 2.56 billion are
outstanding as of 28th February, 2022. Since its inception, more than 131,000 farmers have benefitted
through this scheme against Rs 1.1 billion funds released by the Federal Government.
 SBP’s Initiatives for the Promotion of Agriculture Financing
 Iii) Adoption of Electronic Land Record Management Information System (LRMIS) by banks for Agriculture
Financing: SBP is working in collaboration with Provincial Governments and financial institutions for implementing
and mainstreaming electronic land verification records and charge creation for availing bank loans.
 iv. Promoting Electronic Warehouse Receipt Financing (EWRF): EWRF is a form of credit, extended by banks to
farmers, traders and processors against commodities/agricultural produce stored in accredited warehouses. In order to
allow banks to start EWRF in line with Collateral Management Company (CMC) Regulations 2019, SBP has issued the
necessary amendments in Prudential Regulations while allowing EWR as acceptable collateral for bank financing.
Further, to sensitize banking industry and kick start of EWRF in Pakistan, SBP has formally launched EWRF in
February, 2022 wherein 25 banks signed the System Usage Agreements (SUA) with CMC.
 v. Introduction of Scoring Model for Agriculture Credit Performance of Banks: SBP has introduced the scoring model
to promote fairness and transparency in gauging the individual performances of agriculture lending banks. The scoring
model utilizes a multi-dimensional criteria based on various indicators, which are used to calculate an aggregate
statistic reflective of each bank’s agriculture credit performance.
 vi. Introduction of Champion Bank Concept: To address the bottlenecks in agriculture credit outreach in underserved
areas by introducing the concept of provincial/regional champion banks in underserved areas. The six regional
champion banks will make the efforts in their respective assigned province/region (Southern Punjab, Sindh, Khyber
Pakhtunkhwa, Balochistan, AJK and GB) to enhance flow of credit and bring more borrowers into the fold of formal
credit network.
INDUSTRIAL DEVELOPMENT
 Industrial Development
 Since Industrial revolution, industrialization is regarded essential for rapid development of the
country, countries who relied on agriculture only remains poor and underdeveloped
 Whereas nations which gave weightage to rapid industrial development achieved higher rates of
development such as America, Germany, Great Britain, Japan, Russia etc.
 technological change from industrialization can be channelized into mechanization of Agriculture.
 Such nations incomes increased, their balance of payments considerably improved with higher
employment opportunities and a balance growth of overall economy.
 Increase in national income, high standard of living, economic stability, increased promotes
specialization of labor, rise in agriculture production, large scope for technological progress,
increased saving and investment, provision for defense, lessen pressure on land, development of
markets, increase in government revenue.
 Industrial Development in Pakistan
 Manufacturing share 12.4 percent in GDP
 COVID-19 pandemic exposed the vulnerabilities of global economies.
 The industry of Pakistan also experienced interlude in business activity leading to slowdown in
its performance in FY2020.
 LSM proved to be resilient and gained the growth momentum from the very start of FY2021
owing to gradual opening of economic activities and contingency measures from fiscal and
monetary side in the form of industrial support package, construction package, auto policy, low
policy rate, housing finance, and export financing facility coupled with vaccination drive.
 Fiscal deficit, widening current account deficit, pressure on exchange rate along with achieving a
sustainable post-pandemic recovery, inflation around the world, Ukraine War in the form of
higher food and energy prices.
 During July-March FY2022, LSM staged the growth of 10.4 percent against 4.24 percent growth
in the corresponding period last year.
Causes of industrial backwardness in
Pakistan
 Lack of capital
 Narrowness of market
 Poor quality of industrial labor
 Lack of infrastructure facilities
 Lack of technical know how
 Lack of industrial consultancy firms
 Racial disturbances
 Unfavorable industrial structure
 Frequent breakdown of electricity
 Political instability
 Lack of research
 Major industries of Pakistan
 Textile Industry: Textile is the most important manufacturing sector of Pakistan and has the longest production
chain, with inherent potential for value addition at each stage of processing, from cotton to ginning, spinning,
fabric, dyeing and finishing, cotton yarn, home textiles, towels, hosiery, knitwear and readymade garments.
 This sector contributes nearly one-fourth of industrial value-added and provides employment to about 40 percent of
industrial labor force.
 Textiles products have maintained an average share of about 61.24 percent in national exports.
 Ancillary Textile Industry: Cotton Spinning Sector, Cloth Sector, Textile Made-Up Sector, Hosiery Industry,
Readymade Garment Industry, Towel Industry, Canvas, Synthetic Textile Fabrics, Woolen Industry, Jute Industry.
 Automobile Industry: Except sluggishness in some areas in case of Buses and two/three wheelers there has been
robust growth in all-automobile sectors during July-March FY2022.
 There has been persistent supply chain interruptions due to Chip shortages, skyrocketing freight costs, unrelenting
rupee weakening, galloping inflation and auto financing restriction on high-end vehicles to reduce the import bill.
Further, the earlier reduced taxes at the time of budget 2021-22 were reversed in the subsequent mini-budget thus
frustrating the possible impetus to growth. New Auto Industry Development and Export Policy 2021-26 has been
announced. Meri Gari Scheme, New Product Policy and setting up of export targets have been introduced. All
these measures are encouraging, and it is expected that these initiatives would soon see the light of day. However,
in the forthcoming outlook the demand would weaken, as disposable incomes would decline with higher inflation,
and higher exchange rates and increasing interest rates, amongst other factors.
 Fertilizer Industry Fertilizer is an important and costly input responsible for 30 to 50
percent increase in the crop productivity. The overall objective is sustainability and growth
in agricultural sector that should match the growing population for food security and the
promotion of economic growth.
 Cement Industry: Cement industry of Pakistan remained under pressure since the
beginning of FY2022. This was largely attributed to a revival in construction activities in
the second half of 2020 as COVID-19 lockdowns were eased. Since then, the demand for
cement was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned
its marked fall in exports on political and economic instability in Afghanistan. Cement
industry showed a decline of 6.3 percent in March FY2022 due to massive decline in
exports.
 Small and Medium Enterprises
 Small and Medium Enterprise (SME) sector plays a significant role in the economic
development of country. This sector is considered as the backbone of any economy.
 As per the estimates of Small & Medium Enterprise Development Authority (SMEDA), there
are more than 5 million SMEs in Pakistan.
 SMEs contribute 40% in GDP of Pakistan and 25% in overall exports.
 After Agriculture sector, SME sector provides employment to highest percentage of working
population in the country. SME sector contributes to 78 % of nonagricultural sector
employment.
 SMEs are one of the main sources to reduce poverty, expand national economy and job
creation.
 However, structural barriers still exist which impede bank lending to SMEs, like information
asymmetries, high transaction costs and lack of tangible collateral for availing loans by the
SME owners and entrepreneurs.
 Role of SBP in SME financing
 Due to various regulatory measures and facilitative role played by SBP, SME financing started
rising from 2013.
 The outstanding SME financing reached Rs 524 billion in December 2021 as compared to Rs
284 billion in December 2013.
 6 Percent of the total financing has been disbursed to SME’s (Source SBP).
 SME Asaan finance scheme
 In covid 19, loans principal part differed, and markup rates restructuring , similarly, financing
at 3 percent rate of markup to those SMEs who will not lay off employee during the pandemic.
 Temporary economic refinance facility (TERF): To promote industrialization and avoid
closures, SBP launched loan scheme on 5 Percent markup for ten years period.
 Definition
 Enterprise Category Criteria Annual Sales Turnover
 Small Enterprise (SE) Up to PKR 150 Million Start-up (SE)
 Start up SE A small enterprise up to 5 years old will be
considered as start-up SE
Medium Enterprise (ME) Above PKR 150 Million to PKR 800 Million
Start-up (ME) A medium enterprise up to 5 years old will be considered as Start-up ME
Per Party Exposure Limit: Small Enterprise can avail exposure up to Rs 25 million from a single bank/ DFI or from all banks & DFIs.
Medium Enterprise can avail financing upto Rs 200 million from a single bank/ DFI or from all banks & DFIs.
Requirement of Audited Accounts Banks & DFIs are not required to obtain copy of audited accounts in case of lending to the small
enterprises for exposure upto Rs 15 million. In case of lending to small enterprises above Rs 15 million, banks & DFIs shall obtain from
the small enterprises a copy of financial statements duly audited by a practicing Chartered Accountant or a practicing Cost and
Management Accountant for analysis and record.
In case of lending to medium enterprises, banks & DFIs shall obtain a copy of financial statements duly audited by a practicing Chartered
Accountant, from the medium enterprise who is a limited company or where the exposure of a bank/ DFI exceeds Rs 10 million,
Repayment Capacity of the Borrower and Cash Flow Based Lending: small enterprises do not maintain proper financial accounts for the
satisfaction of banks & DFIs. Their record generally contains sale/ purchase books and cash received/ paid records in a rudimentary form.
Banks & DFIs shall use relevant/ practical cash flow estimation techniques and other proxies to assess repayment capacity of SE borrower.
Recovery of Outstanding Dues To facilitate the recovery efforts, banks & DFIs are allowed to undertake cash collection/ recovery at places
other than their authorized places of business.
 National SME Policy 2021
 Rapidly changing economic environment requires policy and institutional focus that can make SME
sector of Pakistan competitive in international markets and fulfill the multiple agenda of employment
creation, new enterprise development, increased exports, and enhanced contribution to GDP.
 In this regard, approval and launch of National SME Policy 2021 is an important milestone to
revitalize and rejuvenate SME sector to realize the target of inclusive economic growth.
 Government has launched the National SME Policy 2021 in January 2022, underlining the importance
of supporting small businesses and startups with key performance targets to be achieved by 2025
includes:
 ➢ Increasing the economic contribution of SMEs via sustaining a growth rate of small scale
manufacturing by 9 percent, services sector SMEs by 10 percent, average employment by 5 percent
and exports by 10 percent per annum.
 ➢ Making SMEs more competitive & productive through increasing credit to Rs 800 billion and
number of borrowers from 172,893 to 700,000
 ➢ Number of registered businesses to grow by 10 percent per year. Policy envisions to introduce
following initiatives under key thematic areas:
 SME Definition: Adoption of single definition for SMEs across Pakistan:
 National SME Policy 2021 (contd.)

 Enterprise Category Criteria: Annual Sales Turnover Small Enterprise (SE) Up to Rs 150 million
Medium Enterprise (ME) Above Rs 150 million to Rs 800 million Start-up A small enterprise or
medium enterprise up to 5 years old will be considered as Start-up SE or Start-up ME
 The SME Definition in National SME Policy 2021 has been adopted by the State Bank of
Pakistan through amendment in SME Prudential Regulations March 29, 2022.
 Regulatory & Tax Environment
 SMEs Access to Finance: SBP’s SME Asaan Finance Scheme (SAAF) scheme has been launched
that provides, loans up to Rs. 10 million for 3-year tenure with 40-60 percent Credit Risk
Guarantee to SMEs.
 SBP will provide time bound refinancing for three years to the banks selected through a
transparent bidding process.
 Shariah compliant alternate of the scheme i.e. ‘Islamic SME Asaan Finance’ (I-SAAF) has also
been developed.
 Working capital/running finance loans.
 Secured against personal guarantees of the borrowers.
National SME Policy 2021 (contd.)
 Mark-up rate for end user under the scheme will be of up to 9 percent per annum (p.a.).
SBP will provide refinance to banks at 1 percent p.a. thereby, offering a spread of up to 8
percent p.a.
 Under the scheme, Government of Pakistan will provide risk coverage of 40 percent to 60
percent on first loss portfolio basis on following portfolio categories:

Portfolio Category Risk Coverage

Loans of up to PKR 4 million 60 percent
Loans exceeding PKR 4 million and up to
50 percent
PKR 7 million
Loans exceeding PKR 7 million and up to
40 percent
PKR 10 million
 National SME Policy 2021 (contd.)
 Skills, Human Resource & Technology: A special focus has been placed on human resource development such as establishing National Skills
Fund, undertaking skills mapping, support technology acquisition and research & development for technology upgradation etc.
 Infrastructure: Allocation of land in existing industrial estates on a land lease-based model is one of the pillars of the National SME Policy.
For the purpose, 4,200 acres of land has been identified for SMEs with access to 19,500 plots to set-up business.
 Entrepreneurship, Innovation & Incubation: To spur entrepreneurial activities, Policy focuses on creation and strengthening of legal
frameworks for venture capital, equity financing, crowdfunding and other such avenues, scale-up incubation and acceleration programs to
initiate entrepreneurship.
 Women Entrepreneurship Development: A simplified taxation regime with 25 percent tax reduction in tax liability for income from business
of women entrepreneurs has already been announced. Enhancing women’s access to finance shall be ensured through implementation of State
Bank of Pakistan’s Banking on Equality Policy.
 Market Access: Participation of SMEs shall be supported in trade fairs, exhibitions & trade delegations. Furthermore, capacity of SMEs will
be enhanced to make them export ready and for adopting digitization to capitalize upon the opportunities of a growing E-commerce market. In
this regard, E - Tijarat Platform has been launched on February 21st, 2022 to facilitate SMEs
 Institutional Framework National Coordination Committee (NCC) on SMEs Development: NCC has been constituted to lead the agenda of
SME development and ensure effective implementation of the National SME Policy 2021. The NCC is supported by Provincial Working
Groups set up in each of the provinces.
 Institutional Strengthening of SMEDA: Transformation of its organizational potential. SME Registration Portal (SMERP)- Single Point
Access to all Incentives: An SME Registration Portal has been developed, which is integrated with NADRA, FBR, SECP and over time, other
data gathering agencies.
 SMEDA One Window (SOW) 
 Advocacy: SMEDA shall continue to take a central role in SME advocacy and coordination of SME related efforts across the country.
Presence of SMEDA in Key Regulatory Arenas as a voice of SMEs
 National Business Development Program for SMEs (NBDP)
 NBDP has been developed, for providing SME start-up support & business
improvement through practical, on-ground services to SMEs.
 The project provides support in establishing new enterprises and building the
capacity of existing enterprises through provision of Business Development
Services, such as marketing, technology, incubation, research & development
and organizational development services.
 The program envisages to facilitate 314,901 SMEs, over a period of five
years. The total cost of project is Rs 1,954.978 million out of which an
allocation of Rs 400 million has been made for FY2022.
 In addition, Early-Stage Start-up (ESS) grant has been launched in October 2021 under which
ESS grants up to Rs 500,000 will be provided to support SMEs & Start-ups.
 During July-March FY2022, 1600 applications were received and are under evaluation process.
 SMEDA’s largest capacity building initiative comprising of 3,800 training programs during 5
years across Pakistan including Federal Capital, AJK & GB has also been launched under NBDP.
 Over 180 Theme & Sector-Specific training programs have been conducted with over 7,400
SME’s participants.
 In addition, Demand-Based Training and On-Premises Training Programs for SMEs are also
executed at their business locations.
 Certification Program for the capacity building of Individual Business Development Service
Provider (IBDSPs) by offering subsidy to cover up to the 80 percent of the program cost per
IBDSP has also been initiated during the period.
 1000 Industrial Stitching Units
 All Over Pakistan SMEDA is executing project sponsored by the Ministry of Commerce
and Textile (Textile Division) to boost value addition in the field of textile garments by
establishing industrial stitching units across the country.
 Financial assistance is provided for establishing “Industrial Stitching Units (ISUs)”.
 Under this project, 60 percent of grant in the form of machinery is funded by the project
and 40 percent cost is borne by the owner/entrepreneur of the stitching unit.
 POPULATION, LABOR FORCE AND EMPLOYMENT
 With regards to the growing population in terms of size and age, the capability of country for providing
social protection, health care, education and other basic services like housing, sanitation, water, food etc.
becomes a challenge. Pakistan is 5th most populous country in the world.
 According to the National Institute of Population Studies (NIPS), the estimated population of Pakistan is
224.78 million in 2021 of which 82.83 million reside in urban areas, whereas 141.96 million live in rural
areas.
 Poverty in Pakistan has been recorded by the World Bank at 39.3% using the lower middle-income poverty
rate of US$3.2 per day, and 78.4% using the upper middle-income poverty rate of US$5.5 per day, for the
fiscal year 2020–21.
  In September 2021, the government stated that 22% percent of its population lives below the national
poverty line set at Rs. 3030 (US$13) per month.
 As of 2020, Pakistan's Human development index (HDI) is 0.557, and 154 out of 189 countries. Pakistan's
HDI is one of the lowest in Asia,
 The main causes of poverty in Pakistan are the destabilization of democracy, rampant corruption, the rapidly
growing population, the unfortunate state of the education sector, the ineffective management of natural
resources, feudalism, uncontrolled inflation, unequal distribution of etc.
POPULATION, LABOR FORCE AND EMPLOYMENT

 The human resource of a country plays a vital role in the economic development and social well-
being of the people. Proper management of human resource boost economic performance and
reduce social distress.
 Pakistan has a large labor force that stands among the top 10 largest labor forces in the world.
 To generate sufficient employment opportunities for such a large labor force is a huge challenge.
 In addition to this, skills gap makes it difficult for individuals to find jobs and for employers to
find appropriate trained workers for their industries.
 Skills development enhances both people’s capacities to work and their opportunities at work,
offering more scope for creativity and satisfaction at work.
 The future prosperity of a country depends ultimately on the number of persons in employment
and how productive they are at work.
 In Pakistan, skills development can play a key role in the alleviation of poverty.
 Population and Housing Census
 The Population and Housing Census is a vital national exercise linked with provision of data for key policy making
matters regarding development programmes, political representation and resource allocation which has far reaching
impact.
 A national census is mandated by the Constitution of Pakistan to be held every 10 years.
 After the independence of Pakistan in 1947, the first census took place in 1951.
 Since 1951, there have been only 6 nationwide censuses (1951, 1961, 1972, 1981, 1998 and 2017).
 The first census was conducted from 9th February to 28th February, 1951.
 The Dominion of Pakistan (both West and East Pakistan) had a population of 75.7 million, in which West Pakistan had
a population of 33.7 million and East Pakistan (today Bangladesh) had a population of 42 million.
 The second population census was conducted from 12th January to 31st January, 1961. The population was 93
million, with 42.9 million residing in West Pakistan and 50 million residing in East Pakistan.
 The third census of Pakistan was held in 1972. According to the 1972 census, the population of Pakistan was 65.3
million.
 The fourth decennial Population Census of Pakistan was conducted in March, 1981. According to the 1981 census, the
population of Pakistan was 84.3 million.
 The 1998 Census of Pakistan was the fifth Pakistan national census and the population of Pakistan was 132.4 million.
 The sixth census was conducted in two phases in 2017. According to Census-2017, the country’s total population was
207.7 million, with an annual growth rate of 2.4 per cent.
 Labor Force Statistics
 Employment to Population Ratio
 The employment to population ratio is defined as, number of employed persons expressed as a
percentage of working age population (10 Years & above). According to the Labor Force Survey
(LFS) 2020-21, overall employment to population ratio is 42.1 percent.
 The province-wise comparison also shows the same pattern. In Punjab employment to population
ratio is 44.2 percent, followed by Sindh (42.1 percent), Balochistan (38.6 percent) and KP (36
percent), respectively.
 Employment by Sectors
 Being a major contributor to the GDP, agriculture sector plays an important role in development of
the economy. According to the Labor Force Survey 2020-21, the share of employment in agriculture
sector decreased from 39.2 percent in 2018-19 to 37.4 percent in 2020-21. This sector is the key
source of supply of raw material to the other sectors of the economy, especially industrial sector.
 The significant share of employment from agriculture sector is shifted to industry and services sector
due to technological transformation.
 The services sector is the largest growing sector of the economy and the share of employment in
services sector is 37.2 percent in 2020-21.
 The construction and manufacturing sectors are considered as major source of the economic growth
and development. Expansion of these sectors can generate millions of jobs for unskilled, semi skilled
and skilled workforce. Further, these sectors also play an important role in generating income in
formal and informal sectors. Share of employment in construction sector has increased from 8.0
percent in 2018-19 to 9.5 percent in 2020-21. This increase shows that job opportunities are being
created in the country.
 Wholesale and retail trade sector has shown 14.4 percent employment in 2020- 21.
Youth Employment
 According to the Labor Force Survey 2020-21, the overall unemployment rate is 6.3
percent with prevalence of higher unemployment rate 12.2 percent among 20-24 years
compared with 11.8 percent in 2018-19.
 Youth unemployment rate is quite high as compared to the average unemployment rate.
 Improvement in infrastructure and skill development programmes can play an important
role to create employment opportunities in the country.
 Age -wise break up of unemployment rate reflected in Fig-3

 15–19 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60&above
 Initiatives for Employment Generation
 Construction Sector:
 Labor Force Survey 2020-21 indicated that employment in construction sector reached to 6.4 million as compared
to 5.13 million in 2018-19, showing an increase of 1.28 million of employed people.
 Expansion of construction activities not only results in substantial increase in GDP growth but also create thousands
of jobs in industrial sector.
 Skill Development
 In pursuance of Goal 8 of Sustainable Development Goals (SDGs), i.e. Decent Work and Economic Growth, the
government has developed a broader roadmap for youth development under National Skill Strategy (NSS) which
emphasizes on improving governance, exploring multi-source funding, capacity enhancement through employable
skills, quality assurance, access and equity, industry ownership and skill development for international market for
increasing foreign remittances.
 The emphasis is also made on re-skilling the existing workers through Recognition of Prior Learning (RPL) and
provision of subsidized loan to unemployed youth.
 Further, the introduction of Competency Based Training and Assessment (CBT&A) is an important element of the
National Skills Strategy (NSS), which is the basis of the ongoing Technical and Vocational Education and Training
(TVET) sector reform in Pakistan. It also provides the basis for the implementation of the National Vocational
Qualifications Framework (NVQF). The roadmap also urges on public- private partnership; increasing the private
sector role in the governance of TVET.
 Kamyab Jawan Programme
 Kamyab Jawan Programme is the medium of change to empower youth and harness their potential for
human development and transformation of the future of Pakistan. The government launched Kamyab Jawan
Programme to uplift the youth of the country by offering opportunities to utilize their entrepreneurial
potential.
 Under this programme, young people will launch 10,000 start-ups by 2023 to create jobs and economic
activities. Around 68,873 jobs have created under this programme .This programme has following sub –
components:
 a) Hunarmand Pakistan-Skill for All Programme
 Skills for All (Hunarmand Pakistan) programme was initiated to strengthen the quality of technical and
vocational education and training. The purpose of the programme is to equip youth with market-driven
conventional and high-tech skills required for career progression. This programme will also expand the pool
of skilled workforce in all sectors of the economy, and bridging demand and supply gap of skilled
workforce. Women will also be able to meet their domestic expenses subsequently.
 b) Hunarmand Pakistan-Skill for All Programme

 This project is being implemented all over the country. The physical progress of the programme is as
follows:
 Almost 74,737 youth have been imparted employable skills (35,268 youth in HighTECH technologies
(Cyber Security, Artificial Intelligence, Cloud Computing, Internet of Things, Digital Marketing, etc.) and
39,469 youth have been trained in conventional technologies (Electrician, Welder, Plumber, Beautician,
Domestic Tailoring, etc.).
 Additionally, 25% quota is specified for women.
 About 23,000 youth formally skill tested and certified under the scheme.
 NAVTTC has established 10 Country Specific Destination Facilitation Centers.
 Developed National Employment Exchange tool and workforce database and fully functional at:
jobs.gov.pk, database: (413,197 skilled work force and 411,735 jobs posted)
 Established National Accreditation Council for TVET Stream (NAC-TVS).
 Developed 200 TVET qualifications, developed and accredited 535 TVET institutes nationally.
 In addition, National Youth Council (NYC) is actively engaged to ensure young people representation and
participation and nurture youth leadership by recognizing young people’s achievements through publicly
valuing them as part of our society.
 c)Youth Entrepreneurship Scheme (YES)

 Youth Entrepreneurship Scheme, for young entrepreneurs and existing businesses between the age group of
21-45 years (18 Years for IT sector), is designed to provide subsidized financing through 21 Commercial,
Islamic and SME banks under the guidance and supervision of the SBP.
 The loans are being disbursed to SME beneficiaries across Pakistan, covering; Punjab, Sindh, Khyber
Pakhtunkhwa, Balochistan, Gilgit Baltistan and Azad Jammu & Kashmir.
 Under this programme subsidized loans amounting Rs 44,972 million have been disbursed to 27,387
beneficiaries including 3,115 women.
National Youth Council (NYC)

 NYC is an official national platform for young enthusiasts to play their essential role for
the development of youth.
 Young people between the age of 15 to 29 years with exceptional performance and
achievements on their part can become the member of NYC which is reconstituted every
year with new talented & capable volunteers.
 d) Kamyab Jawan Talent Hunt Youth Sports
League
 The national youth sports league, aimed to provide opportunities for youth to get involved in physical
activities not only as a participant but as a professional player, coaches, leaders and volunteer.
 The talent hunt and sport league is required to provide equal opportunities to both men and women for
performance optimization.
 The purpose is to encourage participants to play an active part in promoting a genuine and lasting culture of
peace, human rights and democracy using sport as a catalyst for change.
 As part of ongoing activities, HEC targets to develop these young people to become equipped with the
knowledge, skills and attitudes needed to live together in peace and harmony and empower them to
discover their talent and make the most of their potential.
 The initiative will also help in revenue generation and robust sports and tourism.
 e) Kamyab Jawan Markaz
 Kamyab Jawan Markaz is a standardized one stop shop for university students that will provide necessary
information, counseling through single widow system.
 OVERSEAS EMPLOYMENT
 More than 11.7 million Pakistanis have proceeded abroad for employment to over 50 countries
through official procedures as of December 2021.
 The migration of Pakistani workers is mostly concentrated to Gulf Cooperation Council countries (96
percent) with Saudi Arabia and the United Arab Emirates hosting the majority.
 They are contributing in the development of economy of Pakistan by sending remittances, which is
the second largest source of foreign exchange after the exports. Table 12.3 presents detail of Pakistani
workers registered for overseas employment.
 OVERSEAS EMPLOYMENT

Table12.3: Number of Pak istani Workers Re gistered for Overseas Employment

Countries 2018 2019 2020 2021
Saudi Arabia 100,910 332,713 136,339 155,771
U.A.E. 208,635 211,216 53,676 27,442
Oman 27,202 28,391 10,336 38,349
Qatar 20,993 19,327 7,421 37,985
Bahrain 5,745 8,189 7,843 12,977
Malaysia 9,881 11,323 2,296 106
Others 9,073 14,044 6,794 14,018
Total 382,439 625,203 224,705 286,648
Source: Bureau of Emigration and Overseas Employment (BE&OE)
 Women Empowerment
 The 2030 agenda for sustainable development emphasizes on the gender equality through women
empowerment.
 The SDG 5 calls to end all forms of discrimination, eliminate violence against women and girls in
all its manifestations, ensure health and reproductive rights and bolster political, social and
economic participation of women.
 Pakistan is committed to Committee on the Elimination of Discrimination Against Women
(CEDAW), the Beijing Platform for Action, ILO conventions and Child Rights Conventions, all
directed to ensure women’s rightful place in the society.
 In the past few years, there has been considerable progress, attributable to more deliberate
investments in improving the lives and well-being of girls and women.
 Gender Gap in Pakistan
 Women and Employment
 Women constitute 48.4 percent of Pakistan’s population.
 The government recognizes the relevance of gender equality to the national mandate of achieving growth
and prosperity and the responsibility to ensure that the national policies and programmes serve women
and men equitably.
 Through multiple consultations and following the dismal national standing on international gender
development indices, the government has highlighted gender equality as a high priority goal.
 COVID-19 and Gender Vulnerabilities: According to ILO, 5 percent of employed women lost their jobs
due to the pandemic as compared to 3.9 percent of the men.
 Gender Discrimination
 Women and Healthcare
 Limited Role in Decision Making
 PSDP Allocation on Population Programmes
 The Public Sector Development Programme (PSDP) is an important policy instrument for achieving
socio-economic objectives of the government. It also creates impact for the private sector and leverages
potential of the economy for creation of greater social good. The allocation on population activities
during 2021-22 is as under:
 Key Initiatives
 a. Three Years Rolling Growth Strategy (3YRGS)
 Planning Commission has constituted a Working Group on “Inter Provincial Augmentation on
Population Programmes” to lower growth rate.
 b. Pakistan Demographic Resource Center (PDRC)
 In alignment with the government’s vision, efforts are being made to strengthen data generation and
population statistics to identify priority population factions before rolling out contextualized reform
programmes.
 PSDP Allocation on Population Programmes
 c. Revision and Updating of Curriculum for RTIs
 The Regional Training Institutes (RTIs), all over Pakistan, are responsible for capacity building
training of the health personnel.
 The Training Curriculum used by the RTIs has been revised and updated with technical assistance
from World Health Organization (WHO).
 d. Revision and Updating of Standardized In-Service Training Package on Family Planning
for Facility-based Providers
 Health care providers play a crucial role in delivering high-quality family planning services with
respect and dignity to people in need.
 The Government has updated Training Package on Family Planning to strengthen its services.
 The package is specifically designed for health care providers. It is a comprehensive package that
addresses all services.