Employment dilemma

LAHORE: Pakistan’s employment crisis, marked by rising unemployment due to ever-decreasing job opportunities, demands targeted policy interventions. The government’s lack of action on this issue leads to frustration among job seekers.

The persistent economic downturn in the country stems largely from flawed policies. With the right strategies, economic activity could be revitalized. Policies should focus on phasing out inefficient companies across sectors, with job losses being offset by new investments in existing industries. Effective measures against smuggling and under-invoicing could facilitate this process.

Currently, many companies are implementing hiring freezes due to economic uncertainty, which limits new job opportunities. While layoffs attract attention, these hiring freezes contribute quietly but significantly to rising unemployment by constricting job availability.

Investor hesitation to engage in new ventures or expansions, driven by uncertain future prospects, negatively impacts job creation. This cautious approach slows overall economic momentum, creating a cycle that exacerbates unemployment.

In thriving economies, companies adapt continuously -- efficient firms expand while inefficient ones either improve or exit the market. In Pakistan, cartelization and other inefficiencies allow even less competitive firms to persist, reducing the pressure to innovate and generate new jobs.

Unemployment rises not only from job losses but also from a sharp decline in job creation. The current economic environment here is not conducive to entrepreneurial activity, which is important for generating new employment opportunities.

To address these challenges, the government could introduce policies to boost investor confidence. Tax incentives, improved regulatory frameworks and political stability could boost investor confidence and stimulate job creation.

Support for small and medium enterprises (SMEs), which are typically major employers, is crucial. Policies that facilitate easier access to credit, reduce bureaucratic barriers and encourage innovation could enable these businesses to thrive and create additional jobs.

Government-sponsored employment programmes, such as public works projects, vocational training and skill development initiatives, can help absorb some of the unemployed workforce while enhancing their employability.

Stronger regulatory frameworks are needed to combat cartelization, ensuring that only efficient companies succeed. This would foster a competitive business environment, leading to greater productivity and job creation.

Diversifying the economy beyond traditional sectors like agriculture and textiles is equally important. Investing in technology, renewable energy and other emerging industries could create new job opportunities and reduce dependency on a few sectors, potentially boosting productivity and exports.

A complete overhaul of the educational system is now a necessity. Besides focusing on increasing the number of college graduates who often remain unemployed, improving education quality and aligning it with market needs is also important to prepare the workforce for future jobs, thereby reducing structural unemployment. Addressing these issues will require coordinated efforts from the government and the private sector, focusing on building a more dynamic, innovative and resilient economy.