Pakistan’s progress on the eighth Sustainable Development Goal is in trouble. SDG 8 is a multifarious goal consisting of indicators such as real GDP per capita, domestic material consumption, and unemployment, proportion of unemployed or uneducated youth, access to financial institutions, and aid for trade commitments.
In 2015, Sustainable Development Goals were adopted by the member states of the United Nations. These goals sought after the concept of ‘inclusive and sustainable development’ by simultaneously working on economic growth, poverty, structural inequalities, environmental protection, and the ideas of peace. The nightmarish pandemic of Covid-19 has the potential to undermine these goals into oblivion, when the UN had previously termed the decade of 2020-2030 as a ‘Decade for Action’. Plausibly, it will be a ‘Decade of Prevention’.
The IMF predicts the current global recession, termed the Great Lockdown, to be greater in magnitude than the Great Recession of 2007. It is still too early to gauge the depth of the current recession, but it will be a big threat and blow to Pakistan’s progress in terms of the SDG. This utter scale of the wave of poverty and unemployment that has followed Covid-19 can be termed as a covariate shock. Unless we change our inward looking approach and definition of fiscal stimulus this recession will make SDG 8 an obscure reality for the upcoming years.
Decent work helps in improving the standard of life. This goals stresses on eradication of child labor because a failure to attain education, coupled with hazardous low paying jobs not only leads to health issues but also wastes human potential and capabilities, and ultimately leads to poorer economic prospects. This explanation also applies to the proportion of youth not attaining education, training, or employment. Covid-19, in particular, affected small and medium scale enterprises and daily wagers. Migrant workers suffered a great deal too. The number of working poor might increase as well because of a straining effect on incomes. ILO estimates global unemployment, between 5.3 million and 24.7 million as the minimum and maximum damages caused.
Pakistan was the first country to adopt the SDG Agenda through a unanimous resolution of the parliament in February 2016. Pakistan, which is a labor abundant, and consumption led country has had a mixed performance in achieving this particular SDG. The data we obtained for this goal’s Tier 1 indicators is from the website, ‘SDG-Tracker,’ and is until the year 2017.
For women entrepreneurs, the government launched easy and soft-term financing scheme loans of up to 5 million, with the added benefit of no collateral, and a reasonably priced mark-up
Up until 2017, Pakistan’s annual economic growth rate had started to pick pace. However, like total unemployment, female unemployment, as a percentage of the female labor force saw a rise after 2015. It seems we experience jobless growth for some in Pakistan. Fast forward to today, and it is clear that the negative growth rate and rising unemployment have begun affecting Pakistan’s performance on this SDG. Total official flows (commitments) for aid in trade increased till 2014, but a contractionary effect was seen in the 2016 and 2017.
An IMF report published in 2020, on the topic of women in the labor force, stated that Pakistan has seen an average increase of 2 percent per annum from 1990-2018. Greater female labor force participation rate affects growth through contributing to output and productivity. Informal economy has an important share in the national economy but it is not protected by the state. Even though this sector employed 72 percent of the population in 2017-18, the jobs in this sector are mostly low paying and are subject to seasonal fluctuations. Child labor has been reduced through initiatives taken by different stakeholders. Nonetheless, despite having a surfeit of labor laws Pakistan has failed in their effective implementation.
The Covid-19 pandemic reached our shores at a time when the initiatives taken by the government could have led to a traction on SDG 8. The PTI-led government planned to create 10 million jobs in its five years tenure. Although no concrete plan to create said jobs has ever been furnished. For women entrepreneurs, the government launched easy and soft-term financing scheme loans of up to 5 million, with the added benefit of no collateral, and a reasonably priced mark-up. The SBP has also made efforts to increase women’s access to formal finance.
The IMF has predicted that in the case of Pakistan, the primary deficit would deteriorate to 2.9 percent of GDP in the current FY 2020, after Covid-19, due to a 1.8 percentage decline in tax revenue, while taking into account the increased spending on health and social safety nets for the poor and the unemployed by the state. In simple terms, this primary deficit can be explained as the amount by which government spending exceeds government revenues. This would have severe repercussions on livelihoods because the government may not be able to allocate the necessary fiscal space to its aims regarding job creation, and promoting entrepreneurship. Consequently, it becomes evident that SDG 8 would face a severe blow due to Covid-19.
After our domestic health infrastructure, some indicators such as 8.1.1, 8.5.2 and 8.6.1 from goal 8 can be coined as the need of the time as they deal with growth rate of real GDP per capita, unemployment rate and the proportion of youth not in education, employment or training. In this regard, it should be noted that digital skills is a proviso for surviving these times and the outlook of the future apparently calls for more remote work. Hence, efforts aimed at training people for digital literacy, online work and businesses should be prioritized. A clear nexus between SDG 1: No Poverty, SDG 3: Good Health and Well Being, SDG 4: Quality Education, and SDG 8: Decent Work and Economic Growth exists and it is recommended that the government should recognize this. This will help give direction to Pakistan’s fiscal policy. Maybe, just maybe, there might be coherence rather than incongruity between the recovery and restructuring process of the economy and the implementation of SDG.
Dr Izza Aftab is the chairperson of the Economics Department at IT University, Lahore / Noor Ul Islam is currently working as a Research Associate at the SDG Tech Lab established in collaboration with IT University, Lahore