With over 209 million populations, human capital is an indispensable asset for Pakistan. Besides increasing population, the country is experiencing a youth bulge, with the number of individuals entering the labor market over the upcoming years expanding at a faster rate than the total population. Hence creating enough jobs for a growing population, improve the quality and productivity of jobs, and enhance access to jobs and economic opportunities for youth, women and the disadvantaged, the government must take immediate steps to absorb the substantial number of young workers entering the labor force through investment on their education, and provide quality skills that can help them to find or create new jobs— consequently participate in the labor force for economic growth.
In addition to that, the country’s labor market will need robust policy and strategic measures, to fulfill the demand for the technical human skills of increasing investment activities in the country under CPEC project which is the main part of china “one belt one road” initiative project. In this short strategy paper, I provide an overview of HRD policy, gender and skill gaps, and future projection, with key strategic directions, that Pakistan need to adopt, in order to take benefit from the human capital resources for sustained economic growth. It also particularly emphasize improved standards of teaching and learning at all levels of education, in particular at the tertiary level to prepare itself for forthcoming industrial revolution 4.0.
The fragmented HRD policies in Pakistan
The country shows the most fragmented and politicizes HRD policies, as HRD in Pakistan is not properly addressed by both public and private (Corporate) sectors. Since its independence, the HRD has been the sole responsibility of the Federal government, which has faced 37 years of military dictatorship. Though, the public sector, after the 18th Constitutional amendment HRD is dealt at both federal and provincial level such as (1) planning and development division at federal level and planning and development department at the provincial level; (2) ministry of labor, manpower, and overseas Pakistanis at Federal level; (3) Labour and Human Resource Development Departments at the provincial level and other departments working on HRD are (4 ) the National Commission for Human Development (NCHD) and; (5) National Vocational & Technical Education Commission (NAVTEC); (6) Technical Education and Vocational Training Authorities (TEVTA) at provincial level; and (7) Higher Education Commission. However, the still only 58% of Pakistan population is literate, and the majority of its works are in the informal sector (PBS, 2019-20). Similarly, there are about 188 educational institutions in Pakistan, among which only two are ranked in global competitiveness ranking. Pakistan is also among the worst performers in terms of technical and vocational education and training –Technical & Vocational Education Training (TVET). It should use an effective development and implementation strategy for TVET to harness its young potential. Performing Economies such as China, Hong Kong and South Korea.
Likewise, the funding allocations made on the social sector in the Five-Year Plans could not achieve desired results from time to time because of limited focus on health and education, which have a comparatively higher payoff in terms of HRD (Mahmood, Akhtar, & Butt, 2015). The policies for HRD have been formulated but the interdependence among these policies was ignored. The primary objective of education policies, pursued in Pakistan has been universal literacy but this objective has not been achieved. Small allocations for the social sectors in the past resulted in low human development. A high population growth rate with increasing unemployment has resulted in social tension. The access of poor people to education, health, employment, and other social services was not ensured. This has led to the deterioration of human development in Pakistan. As the Human Development Index (HDI), ranks Pakistan 154th out of 189 countries (UNDP, 2020), and the situation is getting worse, as less than 2.5 % of the budget is invested in the education and vocational training sector and out of this budget a very negligible budget is allocated for the HRD activities (Aftab 2007, World Bank 2013) .
Working Labor and Youth Bulge—Labor productivity in crises
Since, country’s working-age population, including youth, is growing, while dependency ratios are falling—demographic changes that tend to be favorable for growth (as shown in figure 1). While the labor force has grown more rapidly (by an average of 2.9 percent per year) than the working-age population growth, indicating an opportunistic condition in the labor market in Pakistan (Figure 2). But Pakistan is not benefiting from these promising trends amid the underutilization of human capital in the labor market. Total employment growth lags behind labor force growth, indicating that a large majority of people are underutilized or searching for jobs. The growth rates of non-agricultural employment and paid employment are only 1 and 4 percentage points greater than that of total employment. This also suggests slow job creation in the non-agricultural sector and paid employment, which typically are job-creating sectors in dynamic economies.
Compare to Bangladesh, where the ratio of the working- to non-working-age population is also growing, the labor market shows a far more rapid growth in non-agriculture wage employment than in total employment. In addition, real wage growth among paid employees has been growing by only 1.5 percent a year in Pakistan, which suggests modest improvement in the quality of jobs, or labor productivity. Female employment presents significant growth per year, in large part due to increases in labor market activities in rural areas.
Additionally, the country’s labor productivity needs to grow faster to increase the country’s competitiveness. Labor productivity, measured as GDP per person employed, is stagnant: its growth rate is the lowest in the region and far below the average of lower-middle-income countries (Figure 4, left). In comparator economies such as India and China, average labor productivity growth rates over 2003– 14 were 6.3 and 9.2 percent, respectively. In part due to low and stagnant labor productivity, Pakistan’s competitiveness in the export market seems to be lagging. While exports have driven economic growth and poverty reduction in the region, Pakistan’s exports of goods and services in 2015 were at about the same level as in 2004 (Figure 3).
Lower Skill trap, and gender inequality
Pakistan is stuck in a low-skills trap where employers settle for the kind of low skills readily available in the market. Its failure to break away from its dependence on low-skills, low-technology manufactured exports has been because of its low level of human resource development (Amjad, 2005; United Nations Development Programme, 2017). In 2018, the illiteracy rate of the working-age population (10 years or older) was 48.2 per cent (Labour Force Survey, 2018). While the Government has identified nine priority Special Economic Zones (SEZs) under the China Pakistan Economic Corridor (CPEC) and anticipated job creation exceeding 800,000 (Government of Pakistan, 2018, 2019), however, there are no proper investment and planning to how to reach the demands for skills needed under these developmental project. The statistics on employment rates of skilled workers by occupation reinforce some of the earlier findings and highlight some specific challenges as well. Of all females employed, most were agricultural workers in both 2015 and 2018 and projections for 2021 indicate that 46.9 per cent of all working women would be agricultural workers (see Figure 4). Moreover, it is projected that 20.1 per cent of both men and women in employment in 2021 will occupy managerial roles. The data also show that there has been high employment growth between 2015 and 2018 for specific types of skilled workers – plant/machine operators (14 per cent) and technicians and associate professionals (10.6 per cent) – and modest growth of 5 per cent for professionals and craft and trade-related workers.
Pakistan needs to enhance investment, and particular emphasis on improved standards of teaching and learning at all levels of education, in particular at the tertiary level, if it is to leapfrog into the era of the fourth industrial revolution. Similarly, more emphasis on HRD and Entrepreneurship— as an investment in cultivating entrepreneurship and higher education institutions. The government, private sector and international development partners must facilitate start-ups, develop new skill development center, and provide grants, loans and act as intermediaries between students and HEI.
Pakistan should also build closer collaboration between the various systems – primary, secondary, higher level, vocational and skills training –enabling youth for the future world of work. Greater linkages between the education system and industry is also needed to address information failures in the labour market to improve links between employers and skilled. In addition to skills development, policies should address labor market imperfections and challenges.
Control on population and gender disparity—enabling women to participate in the labor market. Donors, industries and HEI along with international partners, should create inclusive programs on population control, and empower women. Apart from the government can introduce vocational programs and awareness campaigns about women’s legal rights at work, and how to access markets for quality employment and form interpersonal relations that encourage greater empowerment.
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