Investment towards the development of youth skills is inextricably linked to Pakistan’s economic aspirations. The case is unambiguously clear, and the political leadership cannot afford any ambivalence about it. Here are a few facts that will help grapple with the enormity of this issue and dangers of inaction.
About 60 per cent of our population is below the age of 30, which makes for about 65 million young adults. Now let’s take a quick look at their ability to contribute to the workforce. Only 35 per cent of the children that finish primary school are getting enrolled in middle school. This means that about 42 million young men and women will have either primary education or below when they turn 16 and reach the minimum working age in Pakistan. Similarly, 23 per cent of these will most likely drop out before matric. That’s another 15 million youth. In total, 57 million of our working class youth is matric and below. A large proportion of them are from public schools. Given the sub-standard learning outcomes of public schools, 45 million of the young men and women that are currently working, have very poor literacy and numeracy skills. The problem is compounding the ever increasing youth population with the same credentials, reaching the working age.
The problem doesn’t end here the 12 per cent of youth entering the tertiary and education sector is creating another set of problems. With poor learning outcomes in secondary education, these young men and women are getting low-quality graduate and post graduate degrees from questionable public and private colleges; now ubiquitous in large and small cities alike. Ideally, these were candidates for technical and vocational institutes and could have become great technicians and employed across industries. Now they may carry bachelors and masters degrees, but are unemployed or chasing menial government jobs. They fall into the category of the unemployables: with no skills to contribute to the private companies and too ‘cool’ to be trained in technical and vocational trades. A major factor contributing to the high numbers of unskilled workers is the existing public-sector which runs woefully inadequate and antiquated technical and vocational centres.
Let’s turn to our current economic aspirations: a thriving knowledge based economy that creates high-value jobs; booming exports of superior quality products and services. Alongside high levels of growth in power, manufacturing, transportation and logistics sectors from the dividends of CPEC. Take the export sector as an example. Businesses have started to automate their manufacturing to stay globally competitive, whether it is value added textiles, sporting gear, or surgical and healthcare products. While hundreds of thousands of unskilled workers are losing jobs as unskilled tasks are wiped out by automation: exporters will need trained skilled workers to run machines. The CPEC related investments will primarily flow in two areas: infrastructure including power generation and distribution, and manufacturing across industrial zones in Pakistan. These ventures will either be with the Chinese as joint venture partners or Pakistani businesses competing with their Chinese counterparts. Either way, they will have to be highly efficient operations to make economic sense. Again, hundreds of thousands of skilled Pakistani workers will be needed to run these operations
While these ambitious economic goals will spur an era of prosperity, it is imperative to pay attention to the on ground reality: our supply side consists of millions of under-educated, unskilled youth. The demand side requires millions of skilled workers that Pakistan needs as fuel to fire its economic aspirations, and unfortunately we are not ready. The emerging scenario will most likely consist of: a) businesses who will be looking for skilled staff but will not find them; b) these hundreds of thousands of unskilled youth will remain unemployed despite visible economic growth; c) it will be uneconomical for the industry to train millions of unskilled youth at its expense; and the fate of these youg people will remain unchanged.
Our supply side consists of millions of under-educated, unskilled youth. The demand side requires millions of skilled workers that Pakistan needs as fuel to fire its economic aspirations, and unfortunately we are not ready
Urgent and radical reforms are needed to fix our technical and vocational education and training (TVET) system. It isn’t rocket science. We have plenty of case studies to learn from, starting with the gold standard systems of Germany, Australia, China, India and many others. Firstly, the private sector must be incentivised to enter the TVET sector and invest in opening skills training institutes across Pakistan. The federal and provincial governments will never have the resources to make the capital investments needed to make efficient TVET institutes functional across the country. Secondly, industries should receive fiscal concessions for investing in skills development. These investments can come in the form of establishing industry-specific institutes or fund the training of youth through TVET initiatives. Either way industry engagement is vital because it is the industries that employs these youths.
This participation of private and public economic parties will ensure that trainings are offered for jobs in the market,and the content of the training is in line with industrial needs. More than 60 countries impose a payroll tax on companies ranging from 0.5-3 per cent. Others make training investments by companies’ tax deductible. Thirdly, the government funding of skills development must be linked to outputs rather than inputs. The current funding model invests in buildings and other fixed costs regardless of the relevance, efficiency and utilisation levels of operations. Governments should only pay for key results, including the capacity-to-enrolment ratio, enrolment-to-completion ratio and completion-to-income generation ratio.
Fourthly, the structure of the TVET sector needs major overhauling and remodelling. Most federal and provincial government agencies overlap and duplicate functions of standards-setting, certification, testing and registration. Their governance, structures, systems and resource capacities are out-dated and cannot guide us on our journey to monumental economic development. Lastly, the higher education system needs to be more selective in terms of its standards and criteria. Most of the youth needs to be guided into the TVET system so Pakistan can produce more technicians to keep our economic machine running. We must declare a national emergency on skills development, before our economic dreams are extinguished by inefficiency and incompetence.
The writer is the Chief Executive Officer of Punjab Skills Development Fund
Published in Daily Times, July 28th 2018.