“It is easy to ignore the poor if they are statistically invisible”. This excerpt from the World Bank’s Handbook on Poverty and Inequality bespeaks the indispensability of numerical data in foreseeing socioeconomic challenges and navigating those to the national policy compass for devising requisite interventions. Policy making, particularly in developing countries, is often constrained by the unavailability of reliable statistics. In addition to gauging the existing scenario, statistics aid governments in economic planning which is vital for embarking upon the path to development.
The existing stock of statistical information about Pakistan’s economy has recently been enriched by numerous data sets and reports published by local and international agencies. Among these, one pertinent data set comprises the enumeration of the country’s population, completed and published by the Pakistan Bureau of Statistics. The population census that was deferred for about 19 years, stashed crucial information regarding the spatial and temporal changes in demographics over time. The census is complemented by the UNDP’s Pakistan National Human Development Report (NHDR), which divulged the country’s volant demographic transition. Adding to these, UNICEF also released large data sets, concerning the quality of human life, generated through the various rounds of the Multiple Indicator Cluster Survey (MICS). By filling the information gaps, these data sets offer the chance to taper the constraints in framing research-backed policies. Besides, these statistics also unfold the country’s key strengths and formidable challenges emanating from its demographic transition, which were otherwise eclipsed.
India has reaped the demographic dividend of its youthful population mainly through freelancing. By 2015, India had 15 million freelancers working in the areas of web designing, app development, data entry, internet research and content writing. This makes India the second largest freelancing economy after the US
Demographic transition refers to the decline in mortality as well as fertility rates in response to changes in the economy over time. The data extracted from the World Bank reveals that Pakistan entered the demographic transition during 1980s, much later than the rest of South Asian countries. However, the fertility rate in Pakistan is still high in comparison with the regional counter parts. With the current fertility rate of 3.414, Pakistan stands second in the region, surpassed only by Afghanistan with a rate of 4.477. While the crude birth rate stands at 27.7, that too, is second only to Afghanistan. Consequently, Pakistan houses a population of 207.774 million individuals, with an average growth rate of 2.4% annually. Yet this growth encompasses changes in age structure coupled with variations in working and dependent age populations. The relatively high fertility rate, complemented by declining mortality, resulted in the accumulation of younger individuals at this time in Pakistan’s history. This youth bulge has been quantified by the NHDR which stated that 64% of Pakistan’s population is below the age of 29 while another 30% was within 15 and 29 years. By correlating these figures with the provincial population growth rates, a myriad of unforeseen hot spots and vulnerabilities suddenly glare. Baluchistan, with a rate of 3.37%, exhibits the highest population growth, followed by Khyber Pakhtunkhwa (KP) that grew at 2.89% since 1998.Punjab and Sindh experienced a decline in their population growth rates. One leading explanation for depopulation is the ‘sub-replacement fertility’, which is the fertility rate below 2.1 that results in the new generation being less populous than their predecessors. While this holds for many European countries, it fails to explain the case of Pakistan where the fertility rate largely exceeds the aforementioned benchmark. Perhaps a more realistic explanation is the ‘rural exodus’ that entails rural to urban migration catalyzed when fewer people are needed for rural agriculture. Sindh and Punjab have the highest shares of urban populations, i.e. 52.02% and 36.71% respectively, thus furnishing ample evidence for the rural exodus (or rural flight) argument. The remaining provinces are predominantly rural which, in turn, exhibit the lack of industrial base as well as an overall conducive environment for economic activities. These differences influence the living conditions and opportunities available to people in different regions, which can adequately be gauged through the Multidimensional Poverty Index (MPI). This enhanced poverty measure, developed by Oxford Human Development Initiative (OPHI) and UNDP, reveals the deprivation of individuals in terms of health, education and living standard.
As per the latest MPI data, Baluchistan is the poorest province with an incidence of 65.3%, followed by KPwhich is 50.7% multidimensionally poor. Sindh ranks third with an MPI of 50.5% while Punjab has the lowest incidence of multidimensional poverty (25.2%). These rankings remain unchanged even when the provinces are seen through the lens of human development index (HDI). Baluchistan has the lowest human development, which is evident from its HDI value of 0.421. Sindh and KP have medium levels of human development as demonstrated by their HDI scores of 0.640 and 0.628 respectively. Punjab has the highest HDI of 0.732, thus placed in the high medium category. Since Punjab and Sindh saw a decline in their population growth, a significant share of the youth bulge is most likely concentrated in KP, Baluchistan and erstwhile FATA. These are the regions that miss out on socioeconomic and human development. Relative deprivation, that arises the feelings of discontentment and alienation, is one of the established causes behind youth radicalization and political violence. To prevent the youth bulge from walking the continuum towards violence, there is a dire need to revamp the existing approaches towards the labor market, human capital formation and economic management. Of all, the most pressing challenge is to provide employment to the working age population that has bulged in recently. While most people aspire to secure employment in the public sector, it’s relatively meager size remains incapacitated to accommodate the youth bulge. This calls for state led initiatives for boosting entrepreneurship and innovation programs across the country. Entrepreneurship and startups have the potential to turn employment seekers into engines of employment creation. The recently started ‘E-Rozgar Program’ by Punjab government, that aims to train graduates in freelancing, is the first step in this direction. To ensure equity, such programs should have a nationwide coverage with broader inclusion criteria. Apart from employment generation, freelancing through online platforms can bring foreign exchange earnings, which is currently the country’s most pressing concern.
Following its independence, Pakistan inherited an agrarian economy where agriculture made the major contribution to GDP, employed most of the labor force and earned foreign exchange via exports. Since Pakistan is no more an agricultural economy, the exports of primary goods and consequently foreign exchange earnings declined sharply. Being a net importer, the country relies on borrowings from the international lending agencies for sustaining domestic consumption and economic growth. Freelancing, entrepreneurship and startups can adequately fill the vacuum left by the agriculture in numerous sectors of the economy. India has reaped the demographic dividend of its youthful population mainly through freelancing. By 2015, India had 15 million freelancers working in the areas of web designing, app development, data entry, internet research and content writing. This makes India the second largest freelancing economy after the U.S. Pakistan also needs to grasp the moment and tap the potential offered by its youth bulge. Pakistan currently has 161 million cellular subscribers among whom 68 million have access to 3G/4G internet services. In addition, there exists 70 million broadband subscribers as well. Given the larger telecom and IT infrastructure, Pakistan is fully capable of becoming a freelancing driven ‘gig economy’. Apart from employment, GDP and foreign exchange earnings, a large pool of online freelancers can also project a soft image of the country across the globe. However, to establish the footprint of freelancing, certain permissive conditions need to be ensured. First, it requires a large-scale digitalization of the economy, business friendliness and availability of online payment systems like PayPal. Second, significant investments should be made in human capital formation for harnessing the full potential of the demographic dividend. While ensuring these require prioritization on a national level, yet a more effective approach would be shifting the tilt of spending from ‘guns’ towards ‘butter’.
The author is a doctoral fellow at the Leibniz Institute and Technische University Dresden (TUD), Germany