The China Pakistan Economic Corridor (CPEC) has provided ample opportunities to take benefit of economic activities which are taking place across Pakistan. Apart from many avenues and opportunities, Pakistan can benefit from its abundant supply of cheap labour, which is a competitive advantage of the country. This can help Pakistan to reduce its current unemployment rate (which is officially at 5.9 percent). Thirty three (33) out of forty eight (48) Asian countries are performing well based on employment indicators. If we consider forecasted the values of the unemployment rate for the upcoming quarters, as well as the next few quarters of 2018, a rise is forecasted of 0.20 percentage points. Thus, the expected forecasted unemployment rate will increase from 5.9 percent to 6.1 percent. It will further deteriorate the employment ranking of Pakistan from the 33rd to the 43rd position in Asia (with calculations based on existing unemployment rates in Asia). This scenario shows that unemployment in Pakistan is becoming more severe. Each year a large number of students are graduating from higher education institutions: resulting in extensive competition for a limited number of jobs, thereafter leading to high unemployment.
There is a dearth of scientific studies that statistically show how CPEC can contribute towards reducing unemployment and boosting job growth via different channels. However; there is consensus among the researchers and government officials that CPEC can increase employment opportunities and give a boost to the overall economic growth rate of the country. Individual researchers have estimated that potential job creation under different CPEC projects varies from 2,000,000 jobs under special economic zones (SEZs) to 7,000,000 direct jobs under all projects CPEC (CPEC-CoE).
In spite of challenges and lack of preparedness, the Corridor still has a lot of untapped potential, and can contribute to the economy of Pakistan, including job opportunities. However; how do we extract the benefits of CPEC in order to boost employment opportunities and accelerate economic growth in the country? This is a question of central importance. If this question is properly investigated and answered in feasible policy framework, it can help reducing unemployment significantly.
Unfortunately, there is no public or private organization in Pakistan that can create an ideal equilibrium between industry – where jobs are created – and universities – which majorly provide supply of (at times, skilled) labour to the industry. This deficiency causes a specific form of unemployment where graduates do not find jobs because their skills and competence do not matched with the industry requirements. In order to overcome the problem of unemployment and to maximize benefits from CPEC in terms of jobs creation, initially an in-depth discussion (in different rounds) with panel experts such as government representatives of CPEC cell, official representative of economic zones, industry experts (who are involved under various CPEC projects), economists having good knowledge of CPEC and local business community members (representative of chamber of commerce) and vice chancellors of general, engineering and medical universities is of the utmost importance. This discussion can be helpful to identify what kind of labour supply is required to get optimize all possible employment opportunities under all the CPEC projects. Their opinions can also be helpful for the VCs to mould existing academic programs or introduce new programs – or short, specialized diplomas – and courses to fill the industry-academia knowledge gap.
Unfortunately, there is no public or private organisation in Pakistan that can create an ideal equilibrium between industry — where jobs are created — and universities — which majorly provide supply of (at times, skilled) labour to the industry
This is the easiest and shortest route to obtain the expert opinion of the panel members to set directions and to train and educate our graduates according to demands of the market and of the employee’s functional environment; otherwise we may lose a big opportunity. In long run, the government can (and should) establish an institution to effectively communicate market demand for graduates with specialized technical skills to educational institutes, including technical colleges and vocational institutes. This exercise may be beneficial to increase employability of Pakistani graduates in various projects taking place under the auspices of CPEC.
The writer is serving Institute of Management Sciences, Peshawar as Assistant Professor in Economics. He can be contacted on his official email: [email protected]
Published in Daily Times, August 28th 2017.