PAKISTAN READER

Ayan Datta

On 11 June, Senator and Federal Minister for Finance and Revenue Muhammad Aurangzeb released the Pakistan Economic Survey 2023-24, a pre-budget report that provided “an overview of the country’s economic performance” during the Financial Year (FY) 2023-24. The 17-chapter report emphasized that despite facing a contraction in FY2023, the economy witnessed a “moderate recovery” in FY 2024 because of the “government’s timely and effective policy measures.” Population, Labour Force and Employment, targets of the multiple “proactive measures” by the government, were one chapter of the report. Despite being the world’s 33rd-largest country and the 24th-largest economy, Pakistan must manage the world’s third-largest population and sixth-largest labour force. These constraints have led to multiple problems, including overpopulation, migration, gender and skill gaps in the economy and unemployment. The government has taken numerous measures to combat these challenges, including encouraging overseas employment of Pakistanis. Following are six key takeaways from the chapter:
 
1. An alarming surge in population
Pakistan's rapidly growing population was a formidable challenge to its development trajectory. The Seventh Population and Housing Census heralded as the "largest digitization exercise in South Asia", revealed an alarming 16.3 per cent increase in population between 2017 and 2023. The explosive growth rate put immense pressure on the country's resources and infrastructure. The report highlighted a rapid increase in population density from “260.88 persons per square km in 2017 to 303 persons per square km in 2023." Such rapid growth would intensify resource competition, strain public services, and complicate development planning.
 
The government aimed to address this urgent demographic challenge by adopting the Family Planning 2030 (FP 2030) programme, which aimed to develop and implement evidence-based progressive policy reforms" for providing "universal access to services to lower fertility rates” and address women’s “unmet need for contraception." In line with this policy, the government stressed two initiatives to tackle this issue: the Punjab Population Innovation Fund (PPIF) to support innovative ideas in family planning and the introduction of Sayana press injection as a new contraceptive option in Balochistan.
 
These efforts reflected a growing recognition that managing population growth was crucial for economic development and capitalizing on Pakistan’s demographic dividend. The chapter recognized that if the population size were allowed to exceed the nation’s resource base, the dividend would soon become a burden.
 
2. Rapid migration to cities produces resource crunch and governance challenges
The chapter stressed that Pakistan was experiencing a population shift towards urban areas, presenting opportunities and policy challenges. The 2023 census revealed that "the urban population increased to 38.82 per cent of the total population," with 53.73 per cent of the population in Sindh and 40.70 per cent in Punjab residing in urban spaces. The rapid urbanization was driven by "the availability of better education infrastructure, health facilities, and job opportunities" in cities. However, the process put immense pressure on urban infrastructure, exacerbated housing shortages, and strained public services.
 
Pakistan’s urban population increased from 75.67 million to 93.75 million between 2017 and 2023. This influx of nearly 18 million people into urban areas in just six years presented intractable policy challenges for urban planning and municipal governance. To address said challenges, the government highlighted multiple programs, including the District Resource Development Centers in Balochistan for managing urban growth and service delivery and the electronic registration of couples in Punjab in family planning services to manage urban population dynamics sustainably.
 
3. Women’s low economic participation and bridging the gender gap
The report highlighted the gendered disparities in Pakistan’s labour force participation, stating that “women's participation in the country's labour force is considerably lower than that of men.” Women faced intractable barriers to economic participation and empowerment.
The gender gap in economic participation represented a violation of women's rights and a massive loss to the country’s economic potential. The report emphasized the need for effective women’s economic empowerment strategies, highlighting several government initiatives to address the gender gap. These included The Prime Minister's Initiative for Women Empowerment, which focused on asset transfers, interest-free loans, and skill training for women. The Banking on Equality (BoE) Policy aimed to "introduce a gender lens within the financial sector" by creating "20 million women-owned active accounts by 2023" and making women"20 per cent of banks' workforce” by 2024. The success of these programmes will depend on their effective implementation and ability to overcome deep-rooted social and cultural barriers to women's empowerment.
 
4. Alarming youth unemployment levels and the structural shift towards services
Pakistan's labour market struggled with persistent youth unemployment. Although the Labor Force Survey 2020-21 revealed a relatively low unemployment rate of 6.3 per cent, youth unemployment was a pressing concern. The survey stressed that unemployment among youth (aged 15-24) was at 11.1 per cent, significantly higher than the national average, with 10.0 per cent for males and 14.4 per cent for females." The alarming youth unemployment rate represented an underutilization of human capital, risks to social stability, and increased occurrences of discouraged labour.
 
From the Survey, a major structural shift in the labour force was evident: "Due to technological transformation, the share of employment in the agriculture sector (37.4 per cent) has shifted to industry and the services sector." The services sector had become the largest employer, accounting for 37.2 per cent of the workforce. However, the shift towards the services did not alleviate youth unemployment because of the sector’s inability to absorb low-skilled workers.
 
The government incorporated multiple policy interventions to address these labour market challenges, including The Prime Minister's Youth Business & Agriculture Loan Scheme for promoting entrepreneurship among the rural youth and The Prime Minister's Youth Skill Development Programme (PMYSDP) for training young workers in emerging IT and industrial skills. This would also target employment opportunities for Pakistanis in overseas job markets, particularly in the Gulf countries and the European Union.
 
5. Skills gap limits employment and growth prospects
A critical challenge for Pakistan's labour force was the mismatch between their skills and employers' demands. The skills gap was evident in the disparity between the demand (1.2 million) and supply (0.47 million) of skilled workers. The mismatch contributed to unemployment and constraints on productivity and growth. To address the skills challenge, the government incorporated multiple policy interventions, including the PMYSDP, which was training 16,000 IT aspirants in collaboration with Google, Microsoft, and Cisco, and the "End-to-End Business solution and outcome-based training initiative", which aimed to train 6,000 youth over the next three years. These programmes marked a shift from traditional and informal training towards demand-driven, outcome-based training models that aligned more closely with industry needs and global standards.
 
6. Government facilitating foreign employment
The report stressed that overseas employment played a crucial role in Pakistan's economy by providing job opportunities and bolstering foreign exchange reserves through remittances. The report highlights that "more than 13.53 million Pakistanis had gone abroad through official procedures to work in over 50 countries until April 2024." The number of overseas Pakistani workers was ever-increasing: “During 2023, the Bureau of Emigration and Overseas Employment (BE&OE) and Overseas Employment Corporation (OEC) have registered 862,625 workers for overseas employment," representing a 4 per cent increase from 2022.” Since that data only covered Pakistanis who went abroad through official channels, the actual number of overseas Pakistani workers must be substantially larger than official figures, given the popularity of unofficial immigration channels.
 
While overseas employment provided Pakistanis valuable opportunities, it also presented grave challenges, including the risk of exploitation, the need for skill development to meet international standards, and the social costs of family separation. To enhance overseas employment opportunities and safeguard overseas workers’ rights, the government implemented the E-Protector service in all Protectorate offices, improving efficiency in the emigration process. Pakistan developed its first "National Emigration and Welfare Policy for Overseas Pakistanis," emphasizing a comprehensive approach to addressing the welfare of emigrants.

Population, Labour Force and Employment
What did the Economic Survey say in the 2022 and 2023 reports?

Pakistan Economic Survey 2022-23
In this report, the concerns about unchecked population growth were similar to those in the 2023-24 Survey, including pressure on scarce resources, infrastructure and the tax burden on the low-middle classes. The report sought to “control population growth through innovative and accessible family planning services." Although the report did not provide specific initiatives to target rapid urban migration, the government’s overarching strategy included improving rural living conditions and creating jobs in villages to "balance the rural-urban divide and alleviate the pressures on urban centres."
 
The government undertook multiple initiatives for women’s economic and financial inclusion and linked them with Pakistan’s pursuit of Sustainable Development Goals (SDGs). In the context of the 2022 floods, the report foregrounded the harmful effects of the floods on women’s livelihoods and socio-cultural vulnerabilities. Citing the United Nations Population Fund, the report argued that Pakistan’s women and girls faced increased risks of Gender Based Violence (GBV) and child marriage during the floods. Although the report did not directly mention the structural shift in the labour force, it acknowledged that unemployment was a pressing concern. It outlined multiple government initiatives for empowering the youth and creating “a skilled labour force ready for modern economic challenges." The government launched the Youth Skill Development Programme (YSDP) to "provide cutting-edge training to enhance employability and reduce the skills mismatch." Acknowledging the role of remittances in the national economy, the report encouraged overseas employment.
 
Pakistan Economic Survey 2021-22
In this report, the government reiterated their focus on population control. The report outlined the National Action Plan (NAP) on Population (2021-26) to address the problems of overpopulation and large family sizes. The District Resource Development Centres were launched to manage rapid growth in urban populations through effective urban planning and public service delivery. The report underscored that "Women's participation in the country's labour force is considerably lower than that of men" and enumerated multiple governmental programmes to enhance women’s economic rights. On the inflow of remittances, it emphasised the role of massive development projects in the Gulf Cooperation Council (GCC) states in creating employment opportunities for Pakistanis. However, high youth unemployment remained a pressing concern.

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