Unemployment is a global problem, but in Pakistan it is reaching critical levels with deep-rooted economic and social impacts. Solving this problem is crucial for the stability and growth of the nation.
Pakistan’s unemployment crisis is worsening. The International Labor Organization (ILO) predicts that the unemployment rate will reach 9.5% in 2024, up from 6.2% in 2021. Female unemployment, often significantly higher than the male rate, could rise to 11.1%. This increase reflects the ongoing impacts of the COVID-19 pandemic, the devastating floods of 2022, and ongoing economic instability.
The latest ILO report shows an alarming decline in the employment-to-population ratio, falling to 47.6% in 2023. With around 5.6 million people out of work – an increase of 1.5 million from 2021 – Pakistan faces a serious setback in its quest for decent work. Looking ahead to 2024, the unemployment forecast paints a grim picture. Estimates vary widely, with some predicting a staggering rate of 52.25%, while others, such as the UN, project 87.8 million unemployed individuals, a rate of 4.2%. The World Bank and the ILO offer different numbers, but the consensus is clear: the labor market is in dire straits.
Pakistan’s recent $3 billion stand-by agreement with the IMF to avert a debt crisis offers some relief. However, the short-term impact may be a tightening of public finances and further tension on the labor market.
High youth unemployment fuels a range of social problems, from increased crime to insecure and poorly paid jobs. Lack of opportunity combined with inflation exacerbates these problems. The ILO emphasizes the need for strong social dialogue and targeted recovery strategies to create decent jobs, especially for women and young people.
Addressing youth unemployment requires new, innovative approaches. It is important to support startups, invest in the gig economy and align education with the needs of the labor market. In addition, managing population growth, increasing women’s labor force participation and attracting international investors are vital to Pakistan’s economic prospects.
Pakistan’s unemployment crisis is a multifaceted problem with economic, educational and political dimensions. Overcoming these challenges requires a comprehensive and sustained effort by the government and all stakeholders. Prioritizing education, creating job opportunities and fostering a business-friendly environment are key steps towards a better economic future for Pakistan.
