CURRENT SITUATION OF UNEMPLOYMENT IN PAKISTAN:

CAUSE & WAY FORWARD

1
 Sequence of Presentation

• Scope
• Introduction
• Issues & Challenges / Analysis
• Conclusion
• Recommendations
• Q&A / Thanks

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 Introduction
‘Unemployment is an important significant social and economic problem. It results
in multiple economic, social and political problems of a country. Unemployment
refers to the share of the labor force that is without work but available for and
seeking employment. Pakistan is one of the top ten countries who have largest labor
force in the world. The unemployment rate in 2020-21 was 6.3%, resulting in 4.51
million people unemployed from the workforce during 2020-21. Unemployment
rate in financial year 2022-2023 increased rapidly because of new emerged factors
including unprecedented floods, shirking of existing industries, high inflation and
others.

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 (contd…)
The deep-rooted causes of unemployment in Pakistan have been high population
growth rate, mass illiteracy, low industrial growth, and gender discrimination.
However, the problem of unemployment can be controled by taking multi-pronged
pragmatic measures including education, population management, vocational trainings,
industrialization, documentation of economy, women empowerment and good
governance.

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 Current Situation of Unemployment in Pakistan

The unemployment rate in 2020-21 was 6.3%, resulting in 4.51 million people
unemployed from the workforce during 2020-21. However, given the current
pace of business closures, temporary shutdowns, and reduction in industries’
outputs, around 6.205 million people or 8.5 per cent of the total workforce of 73
Million may remain unemployed during this year.
(https://tradingeconomics.com/pakistan/unemployment-rate)

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 Causes of Current Situation of Unemployment in
Pakistan
Immediate causes
• Recent floods: 2.36 to 3.6 million jobs may have been lost and/or disrupted as a
result of the worst ever floods in the history of Pakistan that devastated more
than 84 districts of Pakistan.

• Inflation: High inflation rate in Pakistan has made the small business suffer
badly. The reason is that inflation has caused problems for the purchasing of raw
material for the small businesses leading towards layoff of the workers to control
their expenditure .
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 (contd…)
Immediate causes

• Shrinking of industrial operations: Industries such as textiles, especially those

that are export-focused, have been severely affected, with the Chairman of the
FB Area Association of Trade and Industry stating that between 320,000 to
380,000 workers have been spared.

• low foreign direct investment

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 (contd…)

Traditional / deep-rooted causes

• Rapid Increase in Population: According to Labor Force Survey, 2020-21, almost one
million people increase in the labor force of Pakistan. However, all cannot get jobs in the
same year.

• Mass Illiteracy: According to Pakistan Social & Living Standard Measurement Survey
(PSLM) 2019-20, 51% (60%M & 42%F) of the total population completed primary or higher
education. It means 49% population of Pakistan is not able to do the jobs that required literate
human resource.

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 (contd…)
Traditional / deep-rooted causes

• Low Growth of Industrial Sector: Pakistan’s industrial sector could not create jobs
equal to the increase in labor force year to year. In FY2023, the industrial sector posted a
negative growth of 2.94 percent in FY2023 (Economic Survey of Pakistan 2023)

• Gender Disparity: In Pakistan The female labour force participation rate is 19.6 per
cent as compared to males at 69.5 per cent. (Towards Gender Parity in Pakistan (TGP)
Project by ILO Country Office for Pakistan)

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 Solutions

• Ensure supply of financial support to farmers especially in flood affected areas.

• Provide special Package to export industry

• Facilitate and incentivize foreign direct investment

• Facilitate construction industry

• Incentivize small and medium businesses / self-employment

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 (contd…)

• Ensure quality technical education

• Empower women

• Manage population growth

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 Federal Government’s Initiatives

• Prime Minister’s Ba-Ikhtiyar Naujawan Internship Program: Rs. 25,000 per month
for a period of six months to 40,000 youth

• Prime Minister’s Youth, Business and Agriculture Loan Scheme: disbursed Rs. 6,965
million till March, 2023

• Overseas employment: 12.4 million Pakistanis have proceeded abroad for employment
in different countries as of December, 2022

• Special Economic Zones

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Main issues & challenges in dealing with the current
situation of unemployment in Pakistan
• Political instability is a great challenge in promoting businesses environment to
create new jobs

• Governance problems including corruption and bad law & order situation is a
challenge to create ease to business environment

• Inconsistent economic / business policies have discouraged investments for

expansion in job base

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 (contd…)

• Energy crisis is a great challenge to resolved for promotion of business

to cope with unemployment in Pakistan.

• Alarming high population growth rate has created a big challenge to

the new work force every year

• Gender discrimination being a deep rooted socio-political and

economic phenomenon has become a issue of job parity
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 Analysis

Unemployment has become a serious problem of Pakistan. However,

the government’s initiatives could not produce considerable results.
Therefore, a effective measures are needed to overcome the challenges
to the reduce the current unemployment rate in Pakistan.

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 Conclusion
The current level of unemployment has become a serious problem of Pakistan. This
problem has been caused by both immediate and traditional factors that include
recent floods, high inflation rate, shrinking of industrial operations, low foreign
direct investment, rapid increase in population. However, the current problem of
unemployment may be addressed by taking multiple measures. The initiatives taken
by the federal government could produce meager results because of various
challenges including political instability, governance problems, inconsistent
economic policies and rapid increase in population, among others .

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 Recommendations

• Improve the political process to ensure political stability which is necessary for
promoting businesses environment to create new jobs

• Improve governance including transparency, accountability and law & order sit to
create ease to business environment

• Ensure consistent economic / business policies through political consensus to

attract investments.

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 (contd…)

• Ensure uninterrupted and affordable supply of energy using renewable

energy resources, as energy is the backbone of business growth
leading towards employment

• Manage high population growth rate to create balance between the

resources and the size of population

• Do gender mainstreaming for ensuring gender parity in jobs

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 Bibliography
International Labour Organization “Labour Force Statistics database (LFS)”. 2023. https://ilostat.ilo.org/data/

https://www.un.org/en/global-issues/population

Labour Force Survey (LFS) 2020-21

International Labor Organization https://www.ilo.org/islamabad/info/public/pr/WCMS_857171/lang--en/index.htm

https://www.nation.com.pk/12-Oct-2022/imf-sees-rise-in-pakistan-s-inflation-unemployment-rates-in-current-fiscal-year

Impact of Population Growth and Unemployment on Pakistan Economy https://jbm.juw.edu.pk/index.php/jbm/article/view/78

The Nation, E-paper, Dated May 08, 2023

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 Q&A / THANK

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