Bad news and reviews are always raining on the wretched people of this country. But there must be something right somewhere that this country has moved on for the last 67 years. There is a slew of empirical evidence that negates the impression given by the Doom-Sayers that the collapse is around the corner.
Most economists and journalists are no pessimists, but the fact is their focus is on the official economy and statistics which often lack credibility. So they do tell us half truths, not because they are alarmists, but perhaps because they fail to look at other business and social indicators which are out of official data. Unfortunately, however, the urban-based and urban-based media is so consumed by the theatrical politics that it hardly pays any attention to rural areas and the social changes in society.
Economic journalism has come a long way since the country was established and Finance Minister Ghulam Muhammad was given to handle "an economy with a total central and provincial expenditure amounting to no more than 1500 million rupees." (Ibnul Hasan 1987). Today, we have a revenue budget 2013-14 of over Rs 3.5 trillion. But then Pakistan had to feed 70 million people, who included those living in the then East Pakistan; today with half the country gone it has to feed 186 million. The per capita income has also increased many times and the size of rich, lower and middle classes has grown to 60 percent of the population. But the bad news is that nearly 40 percent of our people live below the subsistence level that is almost every third person. This is one of the reasons that our social fabric is bursting at the seams.
So a quick review of the strengths and weaknesses of our demographic profile is important if the country has to grapple with its socio-economic issues. The good news is that the population profile has changed, promising a better economic future. For every one person who is in the age bracket of dependents (below 15 years and above 60 years of age) there are 1.33 persons to support them. There are 58.88 million Pakistanis who fall in dependents' age bracket as compared to 91.52 million people who are in the working age bracket (15 to 59 years).
According to Dr Zeba Sathar, Country Director Population Council, this shift in the population profile has happened mainly because the fertility rate in Pakistan declined from 6 to 4 children per woman.
Now the question is what benefit should this demographic dividend bring to the country if managed sensibly by our policymakers? Pakistan has entered the second phase of this transition. In this phase less young (under 15) and older (above 60) mouths have to be fed by the population which is in the working age bracket. It is this working age segment of population which is contributing to higher production and at the same time higher consumption thus fueling the economy. This shift in the population profile is offering dividend in the shape of increased young labour supply, savings, higher per capita income (which has doubled in the last 7 years), a growing middle class, rising remittances and exports. The East Asian model also shows that when this opportunity was offered to them by demographic transition, they invested heavily in their human resources. And the result is sustained fillip in the economic growth rate.
But as Andrew Mason says 'the change in age structure define possibilities, by themselves do not determine the outcomes." So the big challenge for the planners is to convert this pass given by demographic transition into a goal. This would mean providing employment to over 91 million working age population. It is one thing to have a huge human capital; it's another to employ them gainfully. And yet another bigger challenge is to improve the quality of this human resource pool to raise its productivity and absorption in the employment market.
One of the major problems in Pakistan is that the literacy rate is low; almost 50 per cent of the workforce is illiterate. The government claims that it has achieved to raise the enrolment rate to 86 percent, but only 53 percent of the enrolled students complete their primary education. Unfortunately the education planners are not paying much efforts to arrest the dropout slide.
Even those who cross and move over to do matriculation are by and large semi-literates. That is perhaps the reason for higher unemployment rate among matriculates. A workforce survey has shown that the rate of unemployment is higher among people who have higher educational qualification. The major factor for this skewed relation between higher education and unemployment is that our education system has no linkage with the job market.
According to an ILO Paper, the UHT processed milk sector is presently employing a total of nearly 1,550,000 workforce directly and indirectly. The planners hope if the amount of UHT processed and packaged milk is increased by 10%, the total number of additional jobs which will be created is expected to be around 4.6 to 5.0 million.
Another good development in the last few years has been a rapid increase in micro financing - the number of borrowers has risen from just 210,000 in 2002 to around three million.
But there is also the downside of having a large young workforce in the country. Demographers say that this transition generally lasts for about 50 years and then the ratio of old age dependents starts taking over the young workforce in the third phase. We have been living on the dividend now for almost 15 years. So the time to act and utilise this dividend is now. One dangerous outcome of this change in population profile is unemployment. At present unemployment and under-employment of our youth, particularly of women, is high. It is one big reason for the growing anger among youth, which is being fuelled by criminals and Jihadis equally.
Pakistan's another major strength is its sustainable agriculture which contributes around 25 percent of GDP directly. As most of the cash crops are processed by the industry its contribution to the economy is much higher. In the past few years because of better floor pricing of the agriculture produce there has been a substantial transfer of money to the rural areas which has visibly changed the consumption patterns in these areas.
Once one gets out of the depressing environment of the big cities, where people are being consumed by domestic and regional political questions, and visit some good factory or the rural areas of Pakistan one feels that the people are resilient and would do better than just muddling along. The numbers too aren't bad. Though there will always be a gap between the desired agriculture yields and what it is, for a change let's look at the positive side. Wheat production in Punjab has increased from 2.5 million tons in 1948 to 17.7 million tons in 2012; this shows an average annual growth of 9%; Cotton production annual average increase in the same period has been 22%; Rice 19% and Maize an amazing 27%. The latter has seen a phenomenal rise in per acre yield in the few years because of introduction of hybrid seeds.
Farmers admit that they are better off now as compared to what they were a few years ago, a random survey by this writer of shops in a small village Odero Lal, reflected the changing pattern of consumption and rising purchasing power in the agricultural society. One sizeable farmer said that out of 50 share-croppers employed by him 40 have bought new motorcycles in the last three years. The motorcycle manufacturers confirm that their growth is mainly coming from the rural areas of Pakistan.
Another quiet white-evolution that needs to be studied in greater depths is going through the villages. The livestock sector is now contributing almost 50% of the agriculture sector's growth. Higher milk and meat prices, which are resented by the urban populace, are a blessing for the rural poor. It seems to be just the beginning as only 4% of the total 4.2 billion litres of the milk produced in the country is procured by the eight pasteurized milk packaging companies. Livestock farming enthusiast Mumtaz Khan Manais says this is nothing. "In developed economies 70 to 90% milk is packed, in Pakistan it is just the beginning. Our livestock farmers are getting a good price now, but the issue is low productivity as at an average we get only 6 to 8 litres of milk a day from a cow, while if proper farming methods are adopted this production can go up to 50 litres a day," Manias maintains. He has the distinction of securing a national prize for having a cow which produced 52 litres in a day.
According to senior Punjab Government official, Dr Anjum, 69% of the agriculture workforce is of women; this claim has been fully endorsed by farmers. This is contrary to the official FBS data that shows that only 17.9% of the rural workforce is that of women. The FBS labour force survey perhaps needs to revisit the issue. It is evident at the time of cotton picking, rice sowing and harvesting of almost all the major crops in Punjab and Sindh in which participation of women workforce is greater than men's. The same is true with the livestock farming at smaller levels.
Though large parallel economy is bad news for any government, the fact remains that a very robust parallel economy almost as big as the GDP is flourishing in the country. It has not only kept the consumption of goods and services growing, but is also creating job opportunities and is pushing up the social mobility ratio. The tragedy is that the successive governments have failed to improve the quality of Pakistan's human resources, have been painfully slow in bringing new agricultural technologies and have shown no will to control the black economy.
One of the major problems in Pakistan is that the literacy rate is low.
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