Unemployment and underemployment are confronting more than a-fifth of the workforce in the country. The economy, over the years, is showing increasingly its inability to generate additional employment. In fact, retaining the current level of employment has emerged as a serious challenge. No doubt, continued power outages, law and order situation and high cost of borrowed money have constrained all spheres of economic activities with an adverse impact on employment.

More than three million of the workforce being unemployed is a mere tip of the ice berg. About a-fifth of the employed find their employment incomes failing them to meet even two square meals. To them are added the workers retrenched and laid off by the industry and services in distress. The worst sufferers of the current malaise are the youth and fresh entrants into the labour market. No doubt, this situation demands well coordinated efforts to simultaneously address employment and economic growth. Of foremost interest is the need to identify sectors and economic activities that simultaneously carry employment and development potential. In this regard, greater focus nevertheless should be in developing policy interventions and support mechanisms that foster growth of labour intensive sectors.

This write up elaborates three important areas and economic activities that promise considerable employment and economic growth. It also suggests the introduction of a scheme.

The hitherto neglected sector already employing a large proportion of the non-agriculture workforce is the domestic commerce. Numerous self employment and other small activities that can be picked up rather easily for targeted programs are: (1) mobile phones, wireless loop, (2) Public call offices (PCOs), (3) internet and broad band service providers, (4) cable services, (5) private educational institutions, (6) private clinics and dispensaries, (7) medical laboratories, (8) agriculture farm machinery sales and workshops, (9) fruits and vegetables processing, preservation and storage, (10) fertilizer, pesticides, seeds and agro-chemical distribution, (11) milk collection, processing packaging and marketing, (12) advertising, marketing and creative services, (13) CNG filling stations, (14) small hotels and especially restaurants, (15) IT and internet related activities including call centers, (16) accountancy and management consultancy, (17) housing and construction related services, (18) tourism and traveling agencies, (19) repair and maintenance, (20) domestic appliances, (21) small departmental stores, (22) auto spare parts, (23) mobile utility stores, etc.

Many of these identified activities, however, would need synchronized measures with regard to tackling and removing constraining factors, as well as building and strengthening support mechanism. The constraining factors that need attention are prices of real estates, ownership titles, smuggling, taxation structure and access to finance. The supporting measures needed by this sector would include building, developing and strengthening or providing supply chains, warehouses, refrigeration, transportation including refrigerated transport and human resource development.

Out of the numerous handicrafts being produced across the country, there are over 100 that have been identified by districts. Carrying considerable employment, export and growth potential, the identified handicrafts, however, require product development, quality assurance, technology up gradation, access to credit and market linkages. Establishment of product-specific development and support centres in different cities and towns under the public-private partnership (PPP) would be an important element in harnessing employment. This step then could be strengthened by declaring some cities known for their handicrafts. Whereas, Hyderabad can be declared as ‘bangle city’, Chiniot and Multan ‘furniture city’ and ‘blue pottery and camel skin city’. Each of the product, as well as product-specific city, would also require dedicated skills development and quality assurance centres.

It is well known that rural areas and surrounding small towns are confronted with issues, such as, (a) low human and financial capital, (b) inadequate knowledge on market conditions and support institutions, (c) inadequate infrastructural facilities, (d) poor outreach of extension services, and (e) absence of backward and especially forward linkages. These issues no doubt demand a focused and integrated approach for adequate resolution. Establishment of the three-tier ‘Growth Triangles’ (GTs) in this regard is suggesteds. In short, it is the establishment of a village support centre (VSC). A VSC would be an ideal place to provide literacy/education for men and women, develop programs for the enhancement of the skills, provide vocational guidance and have a reporting system to register employers, employees and home based workers to get an understanding of the rural labour market for policy formulation and evaluation.

Establishment of a multipurpose industrial and rural development support center (MIRDSC) in a cluster of 10-15 VSCs can form the second tier. The MIRDSCs can be used for supporting local area and enterprise development including agriculture and commerce. In fact, the primary focus of a MIRDSC should be none else that removing development bottle-necks inherent in rural areas. Hence, it would need to focus on tackling lack of technical and entrepreneurial know-how. Such a centre, if established, can serve as, (1) a source of information, guidance and counseling, (2) centre for supply of inputs, (3) centre for skills development and up gradation, (4) marketing centre, (5) facilitator for the backward and forward linkages, especially with the manufacturers, small industrial estates (SIEs) and markets in urban areas, and (6) link with credit institutions.

The unskilled and semi-skilled are more vulnerable segments of the labour market. In the short-run, targeted programs are important for generating direct employment opportunities in different areas for them. Launch of an ‘employment guarantee scheme’ (EGS) that targets unskilled and semi-skilled is rather overdue. Under the current situation, cash injections through 100-120 days of guaranteed employment on minimum wage is suggested for those who enroll for employment in rural areas. Linked with the public sector funded small infrastructural projects and community services, the EGS can serve the goal of employment generation and local area infrastructural development. It is high time that the government considers replacing the Benazir Income Support Programme with the EGS, sooner the better.

Political leadership is urged to now divert their attention to the core issues that concern the country and general public alike. Unemployment, underemployment and poverty levels are on the rise and should not remain unattended. Let us make employment generation and poverty reduction outcomes central to our macro-economic management, in making plans, in setting sectoral priorities, in programme design and even in allocation of financial resources.