Reasons for growing unemployment in Pakistan

 Unemployment is one of the biggest problems of Pakistan. That person is unemployed who has ability to do work and is willing to do work but is unable to get job opportunity. In the current situation more than 30 lakh people are unemployed in Pakistan and unemployment ratio is more than 12%.

i. The biggest reason of unemployment in Pakistan is concerned with the backwardness of agriculture sector. Agriculture is the biggest sector of our economy that contributes 20.9% to GDP and 44% people get jobs from this sector directly or indirectly. Unemployment in this sector is from two sides.

First is due to the adoption of latest machinery and capital intensive technology. Due to this, demand for labour has been decreased. Second is the backwardness of this sector. There is less availability of fertilisers, pesticides, quality seeds, absence of land reforms and lack of agriculture education. Due to all these factors agriculture sector is not expanding and there is general and disguised unemployment.

ii. Industrial sector is the second largest sector of our economy and contributes 19% to national income. This sector should employ a large number of labor. But due to backwardness it is employing a small number of people. Due to electricity breakdown already established industry is deteriorating, resulting in the prevailing unemployment ratio.

iii. High cost and low quality are responsible for less demand for our agri and industrial items. Because of less demand of such kinds of goods both the domestic and international producers are losing their interest in production. That’s why people are becoming unemployed.

iv. In Pakistan education system is defective. There is no educational planning. This system is producing the stuff, which is useless in technical fields of the country. There is lack of technical and vocational institutions. Public attitude towards education is wrong, they want to get their degrees in general and arts subjects. Nobody can set up his own business without technical education.

v. Millions of people in Pakistan are poor. Due to poverty people are overburdened with expenditures and their savings are very low. It is said that for the reasonable growth of economy saving rate should be at least 25% in any country, but in Pakistan it is only 13 to 14% which is very low. Low investment level is due to less savings, ultimately there is unemployment.

vi. In Pakistan majority of the businessmen are less educated. They do not know how to run their businesses properly. So they become bankrupt. This factor generates unemployment on a massive level.

vii. In Pakistan there is lack of every kind of planning. There is a huge difference between the demand and supply for labor. There is absence of such kind of planning to produce doctors, engineers, technical experts scientists etc, according to the need of different sectors of the economy.

viii. Loadshedding of electricity is disturbing economy, especially the industrial sector. Due to less availability and high rates of basic inputs like electricity, gas and oil etc, many industries have been closed.

ix. In Pakistan, tax system is not satisfactory. Ratio of direct taxes is more than indirect taxes. Tax evasion is common. Due to less income from the taxes, government cannot start developmental projects. If there is no investment, then from where public would find jobs. On the other side if government takes step to increase indirect taxes, it would also affect investment and ultimately employment level.

x. Current international financial crisis is one of the biggest reason of unemployment in Pakistan and in the whole world. This crisis originated from the banking sector of USA, UK and some European countries and is now a global phenomena.

xi. Pakistan’s population growth rate is 1.8% which is the highest in the region. Our resources are limited. Different sectors of economy are unable to provide jobs to the growing population. So there is unemployment.

xii. Fiscal and monetary policies are also responsible for unemployment. In view of fiscal policy, Pakistan has less funds to invest in job providing projects. Every annual budget shows deficit. Through the monetary policy if the government increases the rate of interest, it discourages the investors from getting loans.

xiii. Political instability, bad law and order situation, army’s interference, bomb blasts, terrorism, inconsistent economic policies etc are the factors which are disturbing domestic and foreign investment. Pakistan investors are taking away their money to Dubai and other countries of the world.

xiv. Due to 9/11 incident, Gulf war and the baseless allegations of terrorism the image of Pakistan has been affected very badly at international level. So in the current scenario Pakistan has limited job opportunities in other countries of the world.

xv. Craze for work only in government sector, instead of private sector and seasonal firms, industries are also responsible for unemployment.

xvi. Since 1947, Pakistani rulers got loans from IMF, World Bank and many other sources. Such loans were not utilised honestly. Current external debt of Pakistan is more than 50 billion dollar. Government has to allocate a big amount for the repayment of loans with interest. So due to less resources for developmental projects there is unemployment.

Concluding, I would like to suggest that with proper economic planning, consistent policies of government, better law and order situation, abolishing energy crisis, sincerity with Pakistan and by adopting the Islamic economic system we can not only tackle the issue of unemployment but every economic problem of our country as well.

Courtesy: Business Recorder

41 thoughts on “Reasons for growing unemployment in Pakistan”

  1. thanks alot very good points this artical is already come to me in issb for group discussion …….and this artical help me alot at that time….thank u very much

  2. this article is quiet good but not enough to define the present reasons of unemployment in pakistan.i am the student of economics and those reasons which r written in this article,m reading till the last 5 to 6 year and at the end the solution was written that we should adopt the Islamic economic system, m agree to u but first of all we should have to build the Model of Islamic system bcz Islam provide the basic rules to run an economy in Quran and Sunnah, now its our responsibility to build an model on the basis of these Islamic rules which explain how we can determine the price, demand,suply like other economic system Keynsian and Classical economic system and need of the time is to update above article bcz there r also so many reasons of unemployement in Pak like corryption in these days etc

  3. this article is no doubt giving enough information but this is useless until our higher authorities do not ponder over these issues and try to established the policies through which our country can overcome these problems…… firstly this is our duty to correct the small mistakes that we can do … then we have the right to expect other people to raise the voice for justice and expect our leaders to make improvements in those industries who are in desperate need of development.

  4. Its really a great essay with full information. All the relevant points have been discussed. I want to do CSS in my future n this essay will surely help me in preparing the exams. Thanks for your support of writing this essay.

Leave a Reply