EDITORIAL: Pakistan’s latest employment statistics ought to give policymakers a little to think about. With the jobless rate rising to 7.8 percent, the economy is failing to provide work for a growing and overwhelmingly young population.
In a country where two-thirds of the people are under 30, this is more than just a statistic — it is a warning. Without meaningful job creation, Pakistan risks squandering its demographic dividend, turning a potential economic advantage into a social and economic disaster.
The 7.8 percent unemployment rate does not even tell the full story. Underemployment is rampant, with many young graduates unable to find jobs that match their skills, and countless others forced into informal, low-wage work. Meanwhile, labour force participation remains low, particularly for women, making the real employment crisis far worse than headline numbers suggest.
The root of the problem lies in economic stagnation. The economy is still on life support, kept afloat only by the International Monetary Fund (IMF) bailout programme. Growth is sluggish, foreign investment is weak, and industrial expansion remains stifled by chronic structural inefficiencies and interest rates that are still considered too high.
The government has touted reforms, but these have yet to translate into an environment that fosters job creation. Instead, tight fiscal policies, while necessary for stabilising the macro-economy, have squeezed growth to a point where businesses are reluctant to expand and hire.
Pakistan’s youth bulge should be its greatest asset, yet policymakers have failed to leverage it. A productive young workforce can drive economic growth, but only if given the right opportunities. Other developing nations have successfully harnessed their demographic dividends by investing in education, technology, and industrial development.
Pakistan, however, lags in all these areas. The education system is producing graduates in fields that do not match the job market’s demands, and the lack of vocational training leaves many young people ill-prepared for available opportunities.
Moreover, without a strong industrial and manufacturing base, there are simply not enough jobs to absorb new entrants into the workforce.
The services sector, particularly the gig economy, is expanding, but it cannot be a substitute for broad-based industrial employment. Pakistan must revive its manufacturing sector, attract investment in value-added industries, and create an environment conducive to entrepreneurship and small business growth.
The country also faces an alarming brain drain. Frustrated by the lack of opportunities at home, skilled professionals are leaving in droves, seeking better prospects abroad. This exodus further weakens an already fragile economy, depriving it of the human capital needed for long-term growth.
Pakistan’s economic managers must recognise that addressing unemployment is not just about providing jobs — it is about ensuring social stability. A generation without prospects will not sit idle forever. If young people feel shut out of the economy, the consequences could be dire, ranging from increased crime and social unrest to a surge in extremism.
The solution requires a shift in economic priorities. Instead of merely balancing books to satisfy the IMF, the government must adopt a growth-oriented strategy that encourages private sector investment, fosters entrepreneurship, and modernises education and vocational training. Structural reforms are necessary, but they must be complemented by policies that stimulate growth and job creation.
Pakistan stands at a crossroads. Either it finds a way to integrate its young population into a growing, dynamic economy, or it faces the risk of a demographic disaster. The choice could not be clearer.
Copyright Business Recorder, 2025