Friday, September 15, 2017

Can Pakistan Economy Add 2 Million Jobs a Year?

About 20 million Pakistanis are expected to enter the labor market over the next 10 years. Can Pakistani economy add jobs at a rate of 2 million a year for the next decade to absorb all new entrants to its work force? What is Pakistan's employment elasticity? How fast must it grow to create these jobs? How much investment is needed to achieve the required growth rate?

Pakistan Labor Market:

Pakistan's work force is about 68 million, according to the World Bank. Its labor force expansion is the 3rd biggest in the world after India's and Nigeria's, according to UN World Population Prospects 2017.  Pakistan's working age population in 15-64 years age bracket is expected to increase by 27.5 million people to 147.1 million in 10 years, according to Bloomberg News' analysis of data reported in UN World Population Prospects 2017.  Pakistan's increase of 27.5 million is the third largest after India's 115.9 million and Nigeria's 34.2 million increase in working age population of 15-64 years old. China's working age population in 15-64 years age group will decline by 21 million in the next 10 years.
Employment Elasticity:

Employment elasticity is a measure of the percentage of new jobs added in the economy for  each percentage point increase in GDP. Employment elasticity of 0.5 means that there is 0.5% growth in jobs for each 1% growth in GDP.

Analysis of the World Bank jobs data shows Pakistan's employment elasticity was about 0.70 in the period from 2000-2010. A little over 5% annual GDP growth enabled the economy to add jobs at a rate of 3.6% a year for the new entrants in the labor market. Since then, Pakistan's GDP growth rate has declined along with a decrease in employment elasticity to about 0.50, according to Asian Development Bank.  The ADB reports says: "With an employment elasticity of GDP growth estimated to be around 0.5, economic growth of at least 7% is required to provide sufficient jobs".

Source: World Bank Report "More and Better Jobs in South Asia"

Savings and Investments:

Rising working age population and growing workforce participation of both men and women in developing nations like Pakistan will boost domestic savings and investments, according to Global Development Horizons (GDH) report. Escaping the low savings low investment trap will help accelerate the lagging GDP growth rate in Pakistan, as will increased foreign investment such as the Chinese investment in China-Pakistan Economic Corridor. Increased savings and investments will not only enlarge the nation's tax base but also help create more jobs for the expected new entrants into the work force as it did in 2000-2010, according to a World Report titled "More and Better Jobs in South Asia".

Economic Growth Rate:

Historic data suggests that it takes investment of 4% of GDP to achieve 1% GDP growth, a capital to output ratio (COR) of 4, according to Pakistani economist Mohsin Chandna.  This COR ratio will require an investment of 28% of GDP to reach 7% economic growth necessary to create over 2 million jobs a year over the next decade.

Pakistan's current savings rate of around 13% will clearly not be sufficient to get to the goals of 28%. This gap will need to be filled by a combination of increased savings rate and substantial increase in foreign direct investment (FDI).

Rising working age population and growing workforce participation of both men and women in developing nations like Pakistan will significantly boost domestic savings and investment. Increased foreign direct investment such as Chinese investment in China-Pakistan Economic Corridor over the next several decades will help fill the gap between the national savings rate and investments required to reach 7% annual GDP growth to create over 2 million jobs a year.


Pakistan needs to create over 2 million jobs over the next decade to absorb new workers entering the labor market. With an employment elasticity of 0.5, it will require 7% annual GDP growth. A combination of increased domestic savings and higher foreign investment flows will be needed for investment of 28% of GDP to achieve the required economic growth for sufficient job creation in the country over the next 10 years.

Here's a discussion on this and other subjects:

Related Links:

Haq's Musings

Pakistan's Labor Force Expansion on Saving, Investments and GDP Growth

Pakistan's Population Growth: Blessing or Curse?

Pakistan's Expected Demographic Dividend

World Bank Report on Job Growth in Pakistan

Underinvestment Hurting Pakistan's GDP Growth

China-Pakistan Economic Corridor

Musharraf Accelerated Growth of Pakistan's Financial and Human Capital

Working Women Seeding a Silent Revolution in Pakistan


Niaz said...

Index of human development devised by the Dr Mahbubul Haq reflects national well-being: life expectancy, education and welfare, as well as wealth of the general population. . Dr Mahbubul Haq preached that nations should spend less on Defence and instead investment in the development and education of their population. This will unlock the potential of the youth and this will create job /work opportunities. However he was not sure whether the countries of South Asia had the political will to cut their arms bills and finance their “essential human goals”.

One can disagree with his recommendation of slashing defence spending and using the funds on human development; nevertheless it is hard to argue that most important objective of any gov’t should the human development.

Most industries these days are capital intensive and in order to compete at the international level, automation (a more politically acceptable name for the work done by the robots) is a must. Coming from a rural area, I can say with certainty that agricultural sector does not have the potential to create even fraction of the required number of jobs.

Thus Pakistan gov’t does not have the capacity to create 2-million jobs per year? Alternately, do we have the political will to spend 30% of our nation budget on Health, Education & Training and on providing safe drinking water to the Joe public instead of the grandiose projects like Metro buses?

Or should we sit back and accept that Pakistan’s destiny is to remain a low to middle income country till the kingdom come.

Riaz Haq said...

Niaz: "Or should we sit back and accept that Pakistan’s destiny is to remain a low to middle income country till the kingdom come."

Pakistan needs to invest a lot more more in both human and economic development. A lot of savings and tax revenue are required for this purpose.

Can Pakistan do it? Yes, absolutely. It happened in 2000-2008 on Musharraf's watch.

Domestic savings rate reached 18% of the GDP and foreign direct investment (FDI) hit a record level of $5.4 billion in 2007-8. This combination of domestic and foreign investments nearly tripled the size of the economy from $60 billion in 1999 to $170 billion in 2007, according to IMF. Exports nearly tripled from about $7 billion in 1999-2000 to $22 billion in 2007-2008, adding millions of more jobs. Pakistan was lifted from a poor, low-income country with per capita income of just $500 in 1999 to a middle-income country with per capita income exceeding $1000 in 2007.

The PPP government summed up General Musharraf's accomplishments well when it signed a 2008 Memorandum of Understanding with the International Monetary Fund which said:

"Pakistan's economy witnessed a major economic transformation in the last decade. The country's real GDP increased from $60 billion to $170 billion, with per capita income rising from under $500 to over $1000 during 2000-07". It further acknowledged that "the volume of international trade increased from $20 billion to nearly $60 billion. The improved macroeconomic performance enabled Pakistan to re-enter the international capital markets in the mid-2000s. Large capital inflows financed the current account deficit and contributed to an increase in gross official reserves to $14.3 billion at end-June 2007. Buoyant output growth, low inflation, and the government's social policies contributed to a reduction in poverty and improvement in many social indicators". (see MEFP, November 20, 2008, Para 1)

Human Capital Development:

In addition to the economic revival, Musharraf focused on social sector as well. Pakistan's HDI grew an average rate of 2.7% per year under President Musharraf from 2000 to 2007, and then its pace slowed to 0.7% per year in 2008 to 2012 under elected politicians, according to the 2013 Human Development Report titled “The Rise of the South: Human Progress in a Diverse World”.

Moh said...

very interesting article but if you look closely there will be wide spread jobs available across Europe/ Far East ,its not a question that Pak economy can absorb 2 Mil Jobs annually the question is what we are doing to channel this 2 Mil to work globally

Riaz Haq said...

Moh: " what we are doing to channel this 2 Mil to work globally"

Good point.

Most of the developed world is experiencing a population bust with rapidly aging societies and plummeting birth rates. They'll need young workers to survive.

115 countries, mainly in Europe and America but also China (1.55), Hong Kong (1.17), Taiwan (1.11) and Singapore (0.8) are well below the replacement level of 2.1 TFR. Their populations will sharply decline in later part of the 21st century.

United States is currently at 2.01 TFR, slightly below the replacement rate. "We don't take a stance one way or the other on whether it's good or bad," said Mark Mather, demographer with the Population Reference Bureau. Small year-to-year changes like those experienced by the United States don't make much difference, he noted. But a sharp or sustained drop over a decade or more "will certainly have long-term consequences for society," he told Utah-based Desert News National.

Japan (1.4 TFR) and Russia (1.6 TFR) are experiencing among the sharpest population declines in the world. One manifestation in Japan is the data on diaper sales: Unicharm Corp., a major diaper maker, has seen sales of adult diapers outpace infant diapers since 2013, according to New York Times.

Majumdar said...

Brofessor sb,

I do see Pakistan growing quite a lot once CPEC is in place. But jobs, unlikely. Whatever manufacturing jobs are there in Pak will vanish once Chinese are here in bigger numbers.

You cud end up like India post 2004, high single digit GDP growth but no jobs at all.


Riaz Haq said...

Majumdar: " You cud end up like India post 2004, high single digit GDP growth but no jobs at all."

There are some differences between growth in India and Pakistan.

Big chunk of India's GDP growth has come from high-end service sectors like IT (information technology) which create few jobs. As a result, India's employment elasticity is less than 0.1, meaning jobs grow only 0.1% for each 1% growth in GDP. The idea of "service escalator" that some Indian economists promoted has failed to create the expected job growth.

" During its boom years, before the global financial crisis, India was growing in large part on the strength of investment in technology service industries, not manufacturing. This gave birth to a cottage industry of Indian economists trying to prove, in optimistic hindsight, that this approach would work as a development strategy. In a globalising world, they argued, more and more services could be delivered over the Internet. One might still need a local beautician for a perm, or a landscaper to cut the lawn, but the Net would make it possible to replace any number of local service agents, from the lawyer to the insurance broker, from the radiologist to the techie to fix your internet connection...Instead of growing richer by exporting ever more advanced manufactured products, India could grow rich by exporting the services demanded in this new information age. These arguments began to gain traction early in the 2010s in new research on the "service escalator". A World Bank 2014 working paper made the case that the old growth escalator in manufacturing was already giving way to a new one in service industries, which can range from taxi rides, haircuts and restaurant meals to medical care........ One basic problem with the idea of the service escalator is that in the emerging world most of the new service jobs are still in very traditional ventures, not in creating virtual realities or high-end travel experiences. Consider the ubiquitous kerbside tire repair stalls from Lagos to Delhi, or what might be called the barbershop in a box. In small Indian villages, many entrepreneurs will cut your hair for a pittance in what looks like a large plywood coffin, tipped up on one end. It would take a bold tourist to venture inside..."

In Pakistan, a lot of jobs are being created in labor intensive sectors like construction of housing, commercial real estate and infrastructure projects like CPEC. That's why Pakistan's employment elasticity is 0.5, meaning jobs grow 0.5% for each 1% growth in GDP.

Beyond, China and Pakistan are working on many special economic zones where Chinese and Pakistanis and others will set up factories for exports as well as local consumption. These SEZs along CPEC route will add jobs in manufacturing, transportation and service sectors.

An existing example of SEZ is Haier-Ruba special economic zone in Lahore.

Nitin B said...

I'm not sure about counting chickens before they are hatched. Okay you say more chickens will hatch in Pakistan than India in the future and so on based on a simple economics formula - hypothetical isn't it?
Rely on economists and weather people at your own peril.

Ali K. said...

Any idea about 2010 to 2015?

Riaz Haq said...

Ali: "Any idea about 2010 to 2015"

In 2010-15, ADB puts #Pakistan employment elasticity at 0.5, #GDP growth averaging < 4%... job growth < 2% per year …

Riaz Haq said...

#India, #China unlikely to be ‘growth poles’ for global #economy: UNCTAD report | Business Line

Effects of demonetisation and rollout of the Goods & Services Tax regime on the informal sector and reduction in pace of credit creation may affect India’s growth prospects and the country unlikely to serve as the “growth pole’’ for the global economy in the near future, a United Nations report has said.

“Growth in the world’s two most populous economies − China and India − remains relatively buoyant, but the pace is slower than before the crisis and face some serious downside risks,” according to the UNCTAD’s Trade & Development report 2017 released on Thursday.

The report titled ‘Beyond austerity — towards a global new deal’, further pointed out that it was absence of a robust recovery in developed countries and renewed volatility of global capital flows that have constrained economic growth in developing countries.

It noted that the world economy in 2017 was picking up but not lifting off. “Growth is expected to reach 2.6 per cent, slightly higher than in 2016 but well below the pre-financial crisis average of 3.2 per cent,” it said.

A combination of too much debt and too little demand at the global level has hampered sustained expansion of the world economy, the reported stated. Giving a prescription for makeover of the world economy, the report made a case for ending austerity, clamping down on corporate rent seeking and harnessing finance to support job creation and infrastructure investment.

India’s growth performance depends to a large extent on reforms to its banking sector, which is burdened with large volumes of stressed and non-performing assets, and there are already signs of a reduction in the pace of credit creation, the report said.

“Since debt-financed private investment and consumption have been important drivers of growth in India, the easing of the credit boom is likely to slow GDP growth,” it said.

In addition, the informal sector, which still accounts for at least one third of the country’s GDP and more than four fifths of employment, was badly affected by the government’s “demonetisation” move in November 2016, and it may be further affected by the rollout of the GST from July 2017, the report added.

“Thus, even if the current levels of growth in both China and India are sustained, it is unlikely that these countries will serve as growth poles for the global economy in the near future,” it concluded.

Riaz Haq said...


Growth in a number of
countries in South Asia, including Bangladesh and
Pakistan, appears to have benefited in recent years
from new opportunitieslinked to the “One Belt, One
Road” initiative in China.
The gradual slowdown of China is expected to continue
asit moves ahead with rebalancing its economy,
towards domestic markets. However, the explosion of
domestic debtsince the crisisis proving a major challenge
to sustained growth. According to comparable
data from the Bank for International Settlements, the
debt-to-GDP ratio of China stands at 249 per cent
as compared with 248 per cent in the United States
and 279 per cent in the euro zone. Despite this debt
build-up, which calls for deleveraging, every time
there are signs of a slowdown the only instrument
in the hands of the Chinese Government seems to
be to expand credit. Fears of a hard landing resulted
in a ¥6.2 trillion increase in debt in the first three
months of 2017.9
The Indian banking sector, too, which since 2003
has expanded credit to the retail sector (involving
personal loans of various kinds, especially those for
housing investments and car purchases) and to the
corporate sector (including for infrastructure projects),
is now burdened with large volumes ofstressed
and non-performing assets. Data for all banks(public
and private), relating to December 2016, point to a
59.3 per cent increase over the previous 12 months,
taking it to 9.3 per cent of their advances, compared
with a non-performing assets (NPAs) to advances
ratio of 3.5 per cent at the end of 2012.10
Rising NPAs are making banks much more cautious
in their lending practices with signs of a reduction in
the pace of credit creation. Since debt-financed private
investment and consumption was an important
driver of growth in India, it is more than likely that the
easing of the credit boom would slow GDP growth as
well. Thus, the dependence on debt makes the boom
in China and India difficult to sustain and raises the
possibility that when the downturn occurs in these
countries, deleveraging will accelerate the fall and
make recovery difficult. Expecting these countriesto
continue to serve asthe growth polesthat would fuel
a global recovery is clearly unwarranted.

Riaz Haq said...

2.43 million Pakistanis working in Europe

Out of the total Pakistan’s overseas workforce, 27 per cent have jobs in European countries, revealed statistics shared by Ministry of Overseas Pakistanis and Human Resource Development with the lawmakers in the Senate.

After Saudi Arabia, United Kingdom caters to the largest overseas Pakistanis followed by Italy, France, Germany and Spain.

In response to question of senator Rozi Khan Kakar, the ministry stated that presently around 9.08 million workforce is living/working abroad, out of which, 2.43 million got job opportunities in around 25 countries of Europe.
UK at the moment has provided jobs to 1.7 million Pakistanis. Saudi Arabia continues to be the favourite destination of Pakistani workforce with 2.6 million workers. United Arab Emirates is at the fourth place in the list with 1.6 million and United States fifth with 900,350.

In Europe, Italy is providing jobs to 119,762 Pakistanis, France 104,000, Germany 90,556, Spain 82,000, Greece 70,002, Norway 38,000 and Netherlands 35,000.

Turkey is providing jobs to only 557 Pakistani workers while China has accommodated 14,355 Pakistani workers. Chile is providing jobs to 760 Pakistanis and Cuba has given job opportunities to 600 Pakistanis. Afghanistan provided jobs to 71,000 Pakistanis and India 10,000. Iran has provided jobs to 7,065 Pakistanis.

Currently, 120,216 Pakistanis have been provided jobs in Malaysia and 65,000 in Thailand.

Libya provided 12,008 Pakistanis jobs, Iraq accommodated 4,709 and Yemen 3,024. Russia gave jobs to 3,560 Pakistanis, stated the statistics.

The reply also contains that 19 Community Welfare Attaches are posted in Pakistan’s missions abroad in the countries having a sizeable concentration of Pakistanis to provide them certain facilities.

These facilities include, issuance of passports, provision of assistance in implementation of Foreign Service Agreement which is made between employee and employer and some others.

Riaz Haq said...

#Pakistan Auto sales up by 25% in Aug 2017. #CPEC

According to latest PAMA data, Pakistan local car assemblers, including LCVs, Vans and Jeeps, have sold 22,000 units in August 2017, an increase of 25 percent annually. These numbers are above the estimates. Experts attribute this increase to string of new models and facelift introduced recently propelling sales.

Sales of Honda (HCAR) have outperformed peers, posting 47 percent YoY growth. These are the highest monthly sales in history of the company at 4,666 units due to successful introduction of new Civic model and new SUV variant BR-V. Sales of Pak Suzuki Motor Company have increased by 32 percent YoY in August 2017 due to strong sales of Wagon-R, +75 percent YoY and new model of Cultus increased by 69 percent YoY. Mehran sales also rocketed +28 percent YoY supporting PSMC’s sales growth.

Indus Motors sold 5,541 units an uptick of 2 percent YoY. The company’s focus remained on production of higher margin Fortune whose sales have shown stellar growth of 284 percent YoY. Also, buyers have resumed purchase of corollas which have shown YoY growth of 5 percent post the recent model facelift. Tractor sales continue to exhibit upward trajectory with sales growing by 115 percent YoY in August 2017. AL Ghazi tractor (AGTL) has been the top performer in this segment with robust monthly sales growth of 26 percent.

Truck and bus sales of PAMA member companies in August 2017 remained strong, growing by 20 percent YoY.

“We foresee this trend to continue, fuelled by CPEC led growth, higher road connectivity, lower financing rate and change & enforcement of axle load limit per truck on highways by National Highway Authority (NHA).

Riaz Haq said...

#India’s #economy: Dark clouds with #GDP growth declining last 6 quarters in a row. #Modi #BJP

The recent headlines on the Indian economy have been stark. Economic growth has declined for six quarters in a row. Inflation has more than doubled in the three months since June. The current account deficit in the first quarter of the current fiscal year was at its highest level in four years as a proportion of gross domestic product (GDP). Is it time to hit the panic button?

Some of the worries are overdone. Inflation was expected to jump back from an absurdly low level in June. The current account deficit is still being comfortably financed by strong capital flows, though the dominance of debt investments as well as the spurt in electronics and gold imports deserve closer examination. And at least some of the sharp decline in economic growth in the three months to June can be explained by inventory destocking by companies ahead of the launch of the goods and services tax (GST), so a cyclical bounce back is quite likely over the next two quarters.

Yet, there is no doubt that the Narendra Modi government faces its biggest economic challenge as it enters the final stretch of its tenure. It got an unexpected bonanza early on thanks to the collapse of global crude oil prices. It was a positive in terms of trade shock that acted as a growth driver. The sharp decline in the current account deficit added at least an extra percentage point to economic growth.

The government prudently used the oil bonanza to strengthen its finances rather than immediately pass the benefits of lower global prices on to consumers. Monetary tightening by the Reserve Bank of India also helped secure macroeconomic stability after nearly five years.

Riaz Haq said...

#India's #Modi has a big problem in creating jobs. #Inequality is rising. #BJP #economy #unemployment

Prime Minister Narendra Modi has a jobs problem.

He swept to power three years ago promising India’s poor and middle classes he’d restore their "dignity" after years of swelling inequality, with job creation central to his pitch. But now, the jobs market has been slugged by last November’s shock cash ban and July’s imposition of a goods and services tax.

And things look like they’re about to get worse: India is set to see a further 30 percent-to-40 percent reduction of jobs in the manufacturing sector compared with last year, according to TeamLease Services Ltd., one of the country’s biggest recruitment firms. While other surveys aren’t quite so bleak, they also suggest Modi is a long way from creating the 10 million jobs a year needed to keep up with his young and rapidly expanding workforce.

The opposition -- in disarray since losing to Modi -- is dialing up its criticism as it eyes elections due in 2019.

"If India cannot give the millions of people entering the job market employment, anger will increase, and it has the potential to derail what has been built so far," Rahul Gandhi, heir-apparent to the main opposition Indian National Congress party, said in a speech at the University of California, Berkeley, on Sept. 11. "That will be catastrophic for India and the world beyond it."

Gandhi is the son and grandson of previous prime ministers, and could well be Modi’s direct opponent at the next vote.

Modi’s backers are alarmed too. A key ally and member of Modi’s party, Subramanian Swamy, told a TV channel over the weekend that he has conveyed concerns to Modi that the economy could be heading for a "major depression."

The Rashtriya Swayamsevak Sangh -- the ideological parent of Modi’s ruling Bharatiya Janata Party that works like a volunteer wing to ensure voter turnout during elections -- has alerted the BJP of signs of a shift in the public mood over the government’s performance, though Modi still remains personally popular, according to a report in the Telegraph newspaper last week that cited unnamed RSS sources.

Read: India’s Shock Therapy Has Some Serious Side Effects

Munira Loliwala, a general manager at TeamLease, said the slowdown accelerated sharply with demonetization. Indian manufacturers, who previously preferred to cut white-collar jobs rather than factory-floor workers, are now slashing all over, she said.

"We see no option, things are not looking to improve much," Loliwala said.

Loliwala was referring to Modi’s move in November to scrap 86 percent of currency in circulation, which contributed to growth in gross domestic product slumping to the lowest since 2014 last quarter. Modi then pushed through a nationwide goods and services tax on July 1, which is expected to benefit India in the long-run but for now is roiling supply chains.

Manufacturing accounts for some 18 percent of GDP and directly employs 12 percent of the population, government data show. Loliwala said that many of those who lose their jobs stay unemployed because they lack the communication skills required for the services sector, which accounts for 62 percent of GDP.

Riaz Haq said...

Value Added Sector Helps #Pakistan’s #Exports Upsurge. Textiles up 11.8%, non-textiles up 23.5% - … via @pakwired

According to a recent report by the Pakistan Bureau of Statistics (PBS), Pakistan’s exports have shown a positive trend backed by rising exports via the value added sector. The growth pattern has been observed during the first two months of the current fiscal year 2017-18. The upward trend in the value added sector has given a significant boost to cummulative export numbers as the New Year kicked off.

Total exports during the two month period, July-August, increased to $3.49 billion as compared to $3.12 billion showing a growth of 11.8%. While the increase in non-textile goods has been registered at 23.5% reaching $1.31 billion during July-August 2017-18 versus $1.06 billion during the same period last year.


Readymade garments have given a major upward push to the overall exports pie increasing by 15.65% on a yearly basis reaching $418.63 million during July-August period. Garments in general have also surged by 16.4% showing volume based growth.

Another integral value-added product, knitwear managed to go up by 7.53% to reach $439 million during July-August. The volume based increase of knitwear exports was 8.23%. Additionally, bed wear exports grew by 8% amounting to $384.32 million while its quantity wise growth stood at 8.79%. Furthermore, the value based growth of towel exports showed 0.67% rise while its volume based growth was registered at 0.03%.

Conversely, the picture has not been equally nice for the intermediate goods like cotton yarn, as their exports slumped by 4% (value) and by 3.3% (volume). Deteriorating demand of cotton yarn and fabric from China is considered a crucial reason for their low sales. Another slump has been seen in the exports of cotton cloth, down by 7.8% in terms of value and quantity. Exports of raw cotton have also seen a downward trend with 14.7% in value and 14.15% in volume during July-August 2017-18.

A major blow has emanated from exports of non-value added products such as cotton carded, which dropped by a whopping 100% in value and volume. In addition, exports of tents and canvas declined by 22% in terms of value. On the other hand, exports of yarn slumped by 0.2% in value but increased in terms of volume.

Quick Read: When will Pakistani companies really value their human resource?


From the non-textile related goods, rice exports grew by a significant 40% during the two months. Basmati and other types of rice exports took a major leap.

From the food category, a major jump was seen in exports of wheat, sugar, fruits during the given period. Crude petroleum and petroleum naphtha registered a growth of 100% and 404% accordingly. Nonetheless, exports of sports goods and carpets saw a downward trend.

Value added leather products increased by 5.8% which was witnessing continuous slump during the last two years. Footwear showed a feeble growth of 0.1% during July-August 2017-18. Furthermore, surgical and engineering goods managed to rise by 26% and 23% respectively.

Riaz Haq said...

#Pakistan large scale manufacturing posts 4 year high growth of 12.98% in July 2017 |

Karachi: Large scale manufacturing sector posted a four-year high growth of 12.98 percent year-on-year in the first month of the current fiscal year on infrastructure-driven boom and growing auto demand.

Pakistan Bureau of Statistics (PBS) data on Thursday showed that iron and steel production climbed 46.36 percent in July over the same month a year ago, followed by automobiles (42.56pc) and non-metallic mineral products (37.95pc).

LSM output increased 12.78 percent in September 2017 over the same month of 2016. PBS statistics revealed that production of billets soared more than 74 percent YoY to 476,000 tonnes in July.

Production of tractors more than doubled to 5,087 units in July 2017 from 2,067 units in July 2016, while output of trucks, jeeps and cars, light commercial vehicles and motorcycles increased 24.4 percent, 55.75 percent, 16.03 percent and 26.46 percent, respectively.

Other sectors that recorded growth in July included engineering products (21.95pc), food, beverages and tobacco (19.02pc), pharmaceuticals (11.14pc), paper and board (11.23pc), wood products (10.95pc), chemicals (5.13pc), coke and petroleum products (4.87pc), rubber products (4.51pc), leather products (2.52pc) and textile (0.43pc).

Fertiliser and electronics sectors, however, recorded a flat production in July over the corresponding month a year ago. Large scale manufacturing grew 4.36 percent in July over June, according to PBS.

Industrial production grew 5.02 percent in the last fiscal year of 2016/17. LSM, accounting for 80 percent of the industrial sector’s 10 percent share in GDP, posted a four-year high growth of 5.6 percent in the fiscal 2016/17. Government set LSM sector’s target at 5.7 percent for FY2018.

Infrastructure development boosted demand of iron and steel products as well as cement, which are the key industries in the country. Auto sales have also been growing in the recent past as demand of heavy vehicles in China-funded development projects, uptake of passenger vehicles and rising sales of tractors for recovering agriculture sector speeded up production in the industry.

The bureau logs trend of industrial sector on the basis of statistics from Oil Companies Advisory Committee (OCAC), ministry of industries and provincial bureaus of statistics. Ministry of industries track production trend of 36 products, Oil Companies Advisory Committee monitors 11 oil, lubricant and petroleum products and provincial authorities measure output of 65 items nationwide.

OCAC registered a 4.87 percent YoY growth in July and edged up 2.51 percent month-on-month. Production of liquefied petroleum gas surged 75.5 percent YoY to 56.29 million litres. Kerosene oil output soared 66.5 percent to 14.78 million litres in July.

Diesel production soared 41.33 percent to 2.15 million litres, while motor spirits output increased 14.6 percent to 237 million litres in July. Ministry of industries recorded a growth of 16.66 percent YoY and 8.09 percent month-on-month, said Pakistan Bureau of Statistics.

Riaz Haq said...

#Pakistan boasts the world's fastest growing retail market. Growing middle class & youth bulge are big reasons why.

Middle class expected to surpass U.K., Italy over 2016-21
By Faseeh Mangi
September 28, 2017, 1:00 PM PDT
Nearly two-thirds of Pakistan population under 30 years old
Pakistan’s retail stores forecast to grow by 50% in 5 years
Pakistan’s burgeoning youth and their freewheeling attitude toward rising incomes have turned the nation into the world's fastest growing retail market.

The market is predicted to expand 8.2 percent per annum through 2016-2021 as disposable income has doubled since 2010, according to research group Euromonitor International. The size of the middle class is estimated to surpass that of the U.K. and Italy in the forecast period, it said.

Pakistan's improving security environment, economic expansion at near 5 percent and cheap consumer prices are driving shoppers to spend up big. Almost two-thirds of the nation's 207.8 million people are aged under 30, according to the Jinnah Institute, an Islamabad-based think tank.

“We have a new millennial shopper at hand. They don’t mind spending to have the kind of lifestyle they would like,” said Shabori Das, senior research analyst at Euromonitor. “It’s not like the Baby Boomer generation where savings for the future generation was important.”

Pakistan is bucking the trend in the U.S. -- where stores are closing at a record pace as e-commerce undermines bricks-and-mortar. It's also attracting foreign operators: Turkish home appliance maker Arcelik AS and Dutch dairy giant Royal FrieslandCampina NV entered the market last year via acquisitions. Meanwhile, Hyundai Motor Co., Kia Motors Corp. and Renault SA are all building plants in the South Asian nation.

Pakistan’s retail stores are expected to increase by 50 percent to 1 million outlets in the five years through 2021, Euromonitor said. Its three biggest malls, Lucky One in Karachi and Packages Mall and Emporium Mall in Lahore, opened in the past two years.

Pakistan is mirroring what India went through about four years ago. Both countries have young populations with more income and less inclination toward saving which is a distinct difference to what retailers elsewhere are dealing with, said Das.

Riaz Haq said...

Japan to provide $4 million to help generate employment in Pakistan

Japan signed a commitment Monday to provide $3.9 million to the United Nations Development Program in Pakistan for an initiative aimed at generating nearly 20,000 jobs for youth in the provinces of Sindh and Khyber Pakhtunkhwa.

The agreement, signed by Japanese Ambassador Takashi Kurai and UNDP Country Director Ignacio Artaza at a ceremony in Islamabad, covers funding to help set up 50 community centers in the two provinces.

The centers will provide vocational training, particularly in information technology, to young people to prepare them for self-employment or employment in different vocations.

"Japan will continue to support youth and young women so that they can take the lead in development of the country, which has bright future with young population," Kurai said in his speech.

Pakistan has a population of 207 million, with 31 percent between 15 and 29 years, and a youth unemployment rate of over 10 percent.

"It is crucial to invest in this 'youth bulge' and provide young people with the skills and knowledge they need to operate in an increasingly competitive employment market, and to help Pakistan's youthful population to contribute in its sustainable development," the Japanese Embassy said in a statement.

Khyber Pakhtunkhwa and adjacent tribal areas bordering Afghanistan have been dubbed as nursing grounds for terrorism, with officials and studies often attributed this to lack of employment opportunities and poverty.

Riaz Haq said...

The Inter­na­tional Labour Organisa­tion (ILO) has warned that Asia-Pacific still faces structural weaknesses in its labour markets despite two decades of economic growth.

In its ‘Asia-Pacific Employ­ment’ and ‘Social Outlook 2018’, released on Friday, ILO pointed out that although the regional unemployment rate is projected to remain 4.1 per cent through 2020, the vulnerable employment rate is expect to creep up towards 49pc, reversing a downward trend of at least two decades.

The region’s future prospects will require that economic growth go hand in hand with a further expansion of decent work, it says.

While real wage growth surpassed labour productivity growth between 2010 and 2016 in almost all countries, the increase in wages of employees looked especially strong in China, Thailand and Vietnam. However, negative wage growth was witnessed in Pakis­tan in 2015-16 at minus 4.7pc.

In Pakistan’s education sector, 6.6pc of the total female employment in 2016 was well behind the 72.9pc share in agriculture and 12.7pc in manufacturing.

Pakistan stands out with 15.3pc of women working from their homes, and 37pc working on the land (in agriculture) in 2017.

Structural transformation has been strongly felt in the region, with employment moving from agriculture mainly into services and only to some extent into industry. Most of the loss in agriculture was taken up by the increase in employment in the services sector, where 740 million jobs have been gained since 2000.

Manufacturing jobs dec­rea­sed slightly from the peak in the mid-2000s, with more job losses accruing to women than men.

The report says while the Asia-Pacific region has made rapid progress to substantially reduce extreme poverty, one fourth of all workers in the region — 446m workers — still lived in moderate or extreme poverty in 2017 and nearly half of the workforce — 930m people — were still making a living in vulnerable employment as own-account or unpaid contributing family workers.

With 1.9bn workers — 1.2bn men and 700m women, the Asia-Pacific region represented 60pc of the global workforce in 2017.

Asia and the Pacific has the most people working, relative to the working-age population. Employment-to-population ratio stands at 59.7pc, compared with 58.6pc at the global level.

Large numbers of workers in the region, especially those in low-paid jobs, work more than 48 hours per week.

The average hours worked in Southern Asia and Eastern Asia in 2017 were the world’s highest, at 46.4 and 46.3 hours per week, respectively.

In Eastern Asia, almost one in five workers worked in excess of 60 hours per week. The regional unemployment rate at 4.1pc is the world’s lowest and well below the global rate of 5.5pc in 2017. But while the global unemployment rate has held steady since 2015, the rate in the Asia-Pacific region has increased slightly by 0.1 percentage point.

In total there were 80.9m unemployed persons in Asia and the Pacific in 2018.

At 10.4pc, unemployment rate among youth remained unchanged from 2015, while the global rate increased to 12.6pc. Thirty five per cent of the region’s unemployed were youth (aged 15—24), although youth made up only 20pc of the working-age population.

In general terms, the labour market gains evident in the Asia-Pacific region in the past few years remain present but fragile.

Decent work deficits persist in all countries in the region and continue to weigh heavily on development trajectories.

Over the coming years, economic growth is expected to remain strong in the region, with growth rates of 5.6pc expected for 2018 and 2019, compared with 3.9pc at the global level.

Riaz Haq said...

The country’s unemployment ratio stood around 5.8 percent in the country, according to a survey of Pakistan Bureau of Statistics (PBS) on labor force 2017-18.

While the ratio of male unemployment stood at 5.1 percent, unemployment ratio in female stood at 8.3 percent.

As per the data released by PBS, agriculture sector provided 38 percent of employment in FY17-18, less than the 42 percent it was providing five years ago.

Industrial sector provided 23.7 percent of jobs in the said period, whereas the ratio was 22.6 percent five years back.

Service sector provided jobs to 37.8 percent, a slight jump from 35.1 percent five years back

Furthermore, literacy rate in country stood around 62.2 percent, with literacy rate for male at 71.6 percent and female at 51.8 percent.

Riaz Haq said...

The Future
of Jobs

Pakistan Working Age Population 82,345,263

Digital skills among active population* WEIGHTED AVERAGE 2019-2020 50.7%

Attainment of basic education 2017 36.4%

Business relevance of basic education* WEIGHTED AVERAGE 2019-2020 45.6%

Attainment of advanced education 2017 8.7%

Business relevance of tertiary education* WEIGHTED AVERAGE 2019-2020 54.9%

Supply of business-relevant skills* WEIGHTED AVERAGE 2019-2020 51.1%

Unempl. rate among workers with adv. educ. 2018 4.5%

Unempl. rate among workers with basic educ. 2018 2.3%

Share of youth not in empl., educ. or training 31.1%

The survey was distributed via an online platform
through three dissemination networks. The primary
distribution route was to the World Economic Forum
partners and constituents in collaboration with
the World Economic Forum Regional and Industry
teams. The survey was further disseminated through
a network of Partner Institutes—local partner
organizations that administered the survey in their
respective economies. Further dissemination through
partner organizations enabled the strengthening of
regional representation by extending the sample to
local companies. As a third dissemination channel,
the New Economy and Society team shared the
survey with the collaborators from the countries in
which the Closing the Skills and Innovation Gap
Accelerators are present (South Africa, UAE, Bahrain,
India, Pakistan). The Accelerator project brings about
tangible change by building a national public-private
collaboration platform to increase employability of
the current workforce and increase work-readiness
and critical skills among the future workforce.