Cut in output cost vital to compete globally: Employment policy
ISLAMABAD, July 24: Pakistan will have to reduce the cost of production and make it comparable with the competitors in order to penetrate and raise its share in the global export market, says the draft of the National Employment policy.
Lowering of tariffs would bring a change in relative price of products across the chain and there is a need to reallocate resources to greater production, technological innovation and new production structures, the draft obtained by Dawn said.
The new policy seeks to enhance the existing low employment rate by bringing efficiency in the public and private sector organisations. The policy planning cell (PPC) of the Labour and Manpower division has prepared the draft of the national employment policy to be shortly discussed with the stakeholders in all the four provinces after which it will be placed before the government for final approval.
It said that duties imposed on raw materials, considered high, are acting as major constraint for exporting leather shoes and meeting increasing global demand. Duties on tannery machines, spare parts and raw materials needed to be reduced or even made duty free for enabling greater Pakistani exports.
Special incentives, the policy urged, required to be offered for setting up of industries for the manufacturing of international quality trimming, accessories, competent and the inputs required by the leather industry and declaring Kasur and Sialkot as leather cities to promote leather industry.
Pakistan's export of leather goods to European countries is declining due to shifting of tanning industries to China, Korea and other Asian states.
Currently, dominated by the traditional food and textile products, the industrial sector demonstrates significant potential for growth, modernisation and employment expansion. It has to diversify and introduce modern technological processes.
Increasing integration with global market is must and critically linked with higher factor productivity and gradual shift to higher end- products.
The apparel industry needs to improve product quality, move up to value chain, lay technological foundations and strengthen global business operation to generate more employment opportunities as well as becoming global player.
Emphasis should be placed on the promotion of vale-added products, especially in new designs and products. To facilitate transformation of textile sectors into a strong, dynamic and internationally competitive industry, the government should help the industry to attain a dominant position in the made-up garments.
Similarly, the government needs to revitalise the institutional structure to strengthen skills and capabilities of human resources and enable the industry to move into a higher technological orbit, and encourage the active public-private partnership.
The agricultural economy still needs to play an important role in increasing productivity and incomes while maintaining its labour absorptive capacity and these needs to be adequately tapped.
This is indeed contingent upon developing greater and effective linkages between setting targets with regard to GDP growth rates, investment and saving levels, fiscal prudence, taxation and monetary policy as well as inflation with considerations on effectively harnessing development and employment potential, the policy said. Moreover, it also demands an institutional mechanism capable to respond effectively to the challenges, goals and targets.
Currently, dominated by the traditional food and textile products, the industrial sector demonstrates significant potential for growth, modernisation and employment expansion. It has to diversify and introduce modern technological processes.
Increasing integration with global market, a must, is critically linked with higher factor productivity and gradual shift to higher end- products. In the world trade, out of 66 categories of products, 22 have increased their shares and the winning products relate to: i) electric appliances, ii) telecom and recording devices, iii) medicines and medical devices, iv) business and data processing devices, and v) land transportation devices.
Many primary and low value-added products experienced a decline in their share. Among these losing industries, yarn and textile and apparel accounting for 71 per cent of Pakistani exports, recorded the largest decline in their shares.
The way forward for us is to align our industry with the emerging trends and investing in the winning industries with greater participation of multinational corporations. Such an emphasis notwithstanding, we would need to simultaneously focus on the promotion of labour intensive industries, especially the traditional export oriented and those having backward and forward linkages by enhancing productivity and competitiveness.
A clear and convincing roadmap of the policies together with commitment of their continuity is a pre-requisite for the growth of industrial sector, the draft of the policy said.
The most important fundamental right is none else than the availability of a productive work opportunity to the able and willing to work citizen of a country. The policy focus of the government of Pakistan is creating conditions conducive for decent employment generation, poverty reduction and human resource development. Hence, focus is on employment and poverty reduction outcomes of macro and sectoral policies. The centrality of employment in economic and social policy making has also led to a greater focus on raising productivity as well as technical and vocational competence of the workforce. The policies are also matched with budgetary allocations.
However, unemployment and under-employment is quite pervasive; the underutilised labour accounts for a fifth of the workforce. Lesser remunerative and low productive work currently affects a significant proportion of the employed. Poor working conditions in significant workplaces are also not uncommon.
Of the estimated over three million unemployed, a significant proportion is found to be: i) educated having matriculation and higher level of education - a scarce commodity in Pakistan, and youth, ii) chronically unemployed (39.5 per cent) i.e. unemployed for more than a year, and iii) active in the job/work search for over a year (21.3 per cent).
In the absence of any formal social security system, this places enormous pressure on the concerned households and individuals. It is also a drain on the already meagre resources of the country.
Still agricultural sector absorbs largest proportion, while manufacturing sector accounting for 13-14 per cent falls even behind, slightly though; social and personal services and wholesale and retail trade.
Illiteracy, low level of education and poor level as well as poor vocational, technical, and professional competence are currently important facets of the labour market participants.
The problem is compounded further by inadequacy of detailed, reliable and disaggregated information on different labour market indicators. Even disaggregated basic information on labour market changes, education and skill requirements, and nature and extent of unemployment by education, gender, areas and length of unemployment is not available.
Consequently, employment counselling, vocational guidance and employment placement are ineffective and even non-existent.
While, the changes occurring in different labour markets and the consequent demand for educated and skilled is not properly monitored, education and training institutions continue planning and executing their programmes. Mismatch of educated and trained is then the natural outcome. The education and training system also continues with qualitative and quantitative bottlenecks.
The current policy focus on employment, HRD and raising vocational and technical competence is the only way of ensuring a fairly dispersed, beneficial and sustainable development.
The rural areas and surrounding towns indeed demonstrate vast employment and development potential; largely remaining untapped. Main hindrances are none else than those related to marketing, and human and physical infrastructure bottlenecks.
Numerous efforts have been directed but largely un-coordinated.
Handicrafts and rural artesian also suffer through these bottlenecks. The main thrust of this policy naturally aims to removing these lacunas thereby greater synergies are built.
The agricultural sector and allied industry (livestock, poultry and dairy) accounting for the bulk of the employed would continue to keep its importance in determining employment and poverty levels.
A thriving agriculture and allied industry would also be able to reduce pressure on rural to urban migration and corresponding increases in low productivity informal sector employment in urban areas.
The agricultural economy still needs to play an important part in increasing productivity and incomes while maintaining its labour absorptive capacity; this need to be adequately tapped.
The set of policy areas identified and recommended in fact, are a pointer to the potential that can be effectively realised.
http://www.dawn.com/2007/07/25/ebr1.htm
