Ayesha Saba

Pakistan’s population is expected to reach 403 million by 2050, presenting both opportunities and challenges. Experts warn that without strategic labor market integration, unemployment and economic stagnation could rise. However, effective policies can transform this growth into a driver of sustainable development.

Talking with WealthPK, Dr. Nadeemul Haque, a leading economist and former deputy chairman Planning Commission of Pakistan, says Pakistan stands at a critical juncture where its growing labor force can either drive economic growth or become a liability. “Pakistan has one of the youngest populations in the world, with nearly 64% under the age of 30.

If this youth bulge is not equipped with employable skills, the economy may face a crisis of mounting unemployment. Countries like China and South Korea utilized their demographic dividend effectively by investing in human capital. Pakistan needs a similar approach,” he says. Pakistan’s current unemployment rate hovers around 8%, with the youth unemployment even higher.

A fundamental issue is the skills mismatch. He emphasizes that expanding the technical and vocational education and training (TVET) sector is essential to bridging this gap by aligning the vocational programs with the industry’s needs. He also underscores the need for an industrial policy that fosters labor-intensive sectors. He points out that the manufacturing sector has been stagnant due to the inconsistent policies.

“We need incentives for labor-intensive industries like textiles, agriculture processing, and construction. If the industrial growth is supported, employment opportunities will expand.” Dr. Ahmed Faraz, a research economist at the Pakistan Institute of Development Economics, (PIDE), says Pakistan’s demographic dividend can only be realized if the young population is equipped with relevant skills and employment opportunities.

He underscores the critical need for substantial investment in education and vocational training to align the workforce competencies with the evolving market demands. “A comprehensive overhaul of our education system, with a strong emphasis on skill development, is imperative,” he says. Dr. Faraz further emphasizes the IT sector as a key driver of employment and economic growth.

He highlights that with the rising global demand for IT services, Pakistan has a unique opportunity to position its young workforce as a competitive player in the international market. “If provided with the right training and resources, Pakistan’s youth can significantly contribute to the country’s GDP by tapping into the expanding global IT industry,” he notes.

Drawing a comparison with India’s IT sector, which has become a cornerstone of its economy, Dr. Faraz suggests that Pakistan should adopt similar strategic policies to foster a thriving digital economy. “By investing in IT education, enhancing digital infrastructure, and supporting tech startups, Pakistan can unlock the full potential of its young talent and drive sustainable economic growth,” he concludes.

Credit: INP-WealthPk