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What’s Stopping Pakistan from Reaping Its Demographic Dividend?

Posted on the 19 May 2015 by Center For International Private Enterprise @CIPEglobal

Photo: Dawn

“In the absence of adequate job creation by the public or private sectors, it is more important to enhance financial inclusion, which can help create greater opportunities for self-employment instead of salaried employment.” Tameer Microfinance Bank CEO Nadeem Hussain

Pakistan is one of the top ten most populous countries in the world. Youth make up over 36 percent of the Pakistani labor force, and that proportion is projected to rise to 50 percent by 2050. According to the World Bank there will be 1.7 million Pakistanis entering the country’s labor force every year, yet, worryingly, the Pakistan labor force survey also finds that over 3.7 million people are currently unemployed. The yearly upsurge in the unemployment rate is putting additional weight on the shoulders of the Pakistan government. The government must reassess and make needed reforms in order to change the current trajectory and allow Pakistan to reap the benefits of its demographic dividend.

I recently attended the roundtable discussion organized by Jinnah Institute in Karachi. The subject of the discussion was “Demographic Dividend: Addressing Youth Unemployment in Pakistan.” The following questions were asked at the discussion, which was attended by private sector experts and academia:

  • To what extent can the public sector continue to provide for employment against poor economic growth?
  • How can inequality in jobs be mitigated?
  • How will youth employment be ensured as mass migration continues from rural areas to urban centers in Pakistan?
  • To what extent can disparities between urban and rural unemployment be addressed, and how?
  • How can a more equitable gender ratio be maintained in Pakistan’s labor force?
  • How has the informal economy affected prospects of youth absorption in the formal sectors?

Participants concluded that Pakistan should have a national entrepreneurship strategy, not just to promote entrepreneurship as a way to stimulate economic growth and create employment, but as a means to change the long-held belief that public sector employment is the only socially-accepted career path in Pakistan.

Social norms must change in order to energize youth to take a fresh look at a career in the private sector and follow the path of entrepreneurship. In order for this to happen, the education sector must focus on teaching students relevant employable skills and provide training to minimize the education-employability gap.

Finally, the participants suggested that in order to address youth unemployment there is an urgent need for public-private partnerships for SMEs, financial inclusion, increased access to credit (especially for youth and women), vocational training, and, lastly, the formation of a national entrepreneurship strategy as an intervention policy.

Moin Fudda is Country Director for CIPE Pakistan.

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