The Economics of Unemployment: A Comparative Analysis

ACKNOWLEDGEMENT We are grateful to Ms. Asma Hyder who was a great help in the project. She was always available to help us with the problem areas. She took out time for us at all times, putting her work aside therefore we thank her for the effort she has put into our project. Her encouragement has always inspired us as she helped us whenever we needed her help. She helped us in our problem areas all the time. It would have been a difficult task having to do our project without her help. Executive Summary: This report starts with the introduction of unemployment followed by the explanations of various types of unemployment. The report also contains the objective for doing the project and motivation behind doing research on this particular topic. The major portion of the report contains the data and its analysis which is done with the help of bar graphs . It also contains the reasons for increased unemployment and the consequences that Pakistan is facing due to increased unemployment. Some of the major governmental policies have also been discussed in this report and the effect of those policies. In the end a brief conclusion of the research work has also been given. The tables giving comparison of unemployment with age, sex and provinces are provided in the annexure. Table of Contents INTRODUCTION:4 PRESENT SITUATION6 OBJECTIVE:8 MOTIVATION BEHIND THE TOPIC:8 ORGANIZATION OF THE STUDY:9 LITERATURE REVIEW10 DATA12 Unemployment Rates: Sex and Age13 Required data:17 ANALYSIS19 ANALYSIS OF UNEMPLOYMENT RATE VERSUS GDP GROWTH RATE20 Comparison of GDP with unemployment using bar chart21 ANALYSIS OF UNEMPLOYMENT RATE VERSUS INVESTMENT GROWTH RATE22 Comparison of investment with unemployment using bar chart22 ANALYSIS OF UNEMPLOYMENT RATE VERSUS EXPORT GROWTH RATE23 ANALYSIS OF UNEMPLOYMENT RATE PROVINCE WISE25 ANALYSIS OF UNEMPLOYMENT RATE RURAL/URBAN WISE26 ANALYSIS OF UNEMPLOYMENT RATE AGE AND GENDER WISE27 CONCLUSION:30 GOVERNMENT POLICIES:32 PROGRAMS INITIATED BY GOVERNMENT:33 REFERENCES:37 ANNEXURE39 INTRODUCTION: Unemployment refers to the inability for willing workers to find gainful employment. The degree of unemployment in a nation is one indicator of the economic health of the country. Many factors can negatively affect the unemployment rate including corporate downsizing, mergers, implementation of automation technologies, and job outsourcing to other nations. TYPES OF UNEMPLOYMENT: Structural Unemployment Structural unemployment is caused by a mismatch between jobs offered by employers and potential workers. This may pertain to geographical location, skills, and many other factors. Cyclical Unemployment Cyclical unemployment also known as demand deficient unemployment occurs when there is not enough aggregate demand in the economy. This is caused by a business cycle recession and wages not falling to meet the equilibrium rate. Frictional Unemployment It represents people who are temporarily unemployed because they are in between jobs. Seasonal Unemployment Seasonal unemployment occurs because of the seasonal nature of some jobs (fruit pickers) Underemployed It refers to people who are working less than full-time hours but would like to work longer Long-term Unemployed These are people who have been unemployed for longer than 12 months. Hard core Unemployment: These are people who are unemployed due to their personal, mental or physical characteristics. Major Causes of Unemployment in PAKISTAN from Past to Present: 1. Employment in the private sector absolutely stopped because they shifted their capital to other countries because of nationalization of industrial units which badly affected the investment industrial sector. 2. The higher growth rate of population is the major cause of unemployment in Pakistan. The resources of the country are limited because population has exceeded the optimum level. . Karachi is the biggest industrial base of Pakistan, but investors are reluctant to invest there because of unrest and violence. 4. Our educational system is also responsible for increasing unemployment rate among the educated youth. The attitude of our youth towards the choice of a career is unrealistic and unproductive. Rapid mechanization and computer technology also causing unemployment. 5. Lack of infrastructure and facilities in the field of energy, telecommunication and transportation also prevent the industrialist from setting up new industries. . Lack of enough industries to employ ever increasing number of graduate in Pakistan 7. The government is not involving in capital expenditures which create more jobs. 8. Main issue of unemployment in our country is that when ever a new technology comes as software or hardware then all the people start to learn that. Then at the end, you will see tens of thousands of students of a particular field against about 5 to 10 job vacancies. 9. Things are not handled in appropriate manner, as the vacancies are less but job seekers are more than that. 10. Opportunities are not enough and system of reference is so much indulged in our society that if a company needs employees then workers of that company will provide resume of their relatives and friends thereby influencing employment decisions, so in this way many people don’t get the opportunity to apply for those jobs. 11. Lastly, our country’s present law and order situation is proving very detrimental to the investment climate and is one of the main hindrances for achieving employment goals which need immediate remedy PRESENT SITUATION: Unemployment is a growing problem of every nation. Pakistan has reached a critical stage and joblessness is increasing daily. Moreover, downsizing in many government offices and within the private sector have exacerbated the problem Economists caution that unemployment is likely to grow at a more rapid pace in the years ahead. â€Å"Half the population is below 18 years of age,† â€Å"So entry into the labour force is fairly high and therefore the labour force growth numbers and the unemployment growth numbers will be very high. † Also the female participation in the labour force is amongst the lowest in Asia and comparable only to Sub-Saharan Africa. According to the labour force survey, the crude activity rate (which measures the percentage of labour force in the total population) stands at 9. 3 percent for women compared to 47. 6 percent for men. ?Latest Unemployment Rates in Pakistan: Unemployment Rates? Using Bar Chart: Unemployment Rates? Using Line Chart: OBJECTIVE: This topic has been selected with the objective of finding out what are the reasons that are behind increased unemployment in Pakistan. This objective led us towards the start of our project because unemployment is not a single dilemma of our country it has deep influence on other economic factors. Unemployment has a relation with inflation, GDP, country’s export which we are aim to find how this impact is going to effect and had affected our economy from past. Moreover our objective is to look at how we can improve the situation and how can we create unemployment in our country which will not be beneficial at macro but also effect at the micro level of our country. MOTIVATION BEHIND THE TOPIC: Unemployment is not a single problem it is related to many other problems that poorly impact the economic growth. Unemployment affects the social cost which includes increasing poverty, personal hardships, depression, decay of unused skills, and increase in crime as well as family disputes. In a nutshell, level of dissatisfaction rises higher and higher among unemployed people. In order to reduce the percentage of unemployment from our society we have planned to work on this issue as we have observed that the percentage of unemployment is increasing remarkably in our rural as well as urban areas. Secondly we are motivated that may be we provide our government and employers with some helpful suggestions that will increase the employment ratio. Keeping in view the present economic conditions prevalent in Pakistan in which country faces high inflation due to gap between revenues and expenses. It is suggested that Pakistan should pursue generating enough revenues, so as to meet its local and international commitments, needs to use its human resource or reduce unemployment by setting up new projects which can generate economic stimulus and thereby reduce gap between revenues and expenses which will impact other economic fundamentals. ORGANIZATION OF THE STUDY: Total duration: 12-weeks First Phase (3-weeks): Research from the Secondary data sources such as research journals HEC’s Digital Library Online Directories Economic Survey of Pakistan National Bureau of Statistics etc. Second Phase (5-weeks): Analysis of the collected data which will include Causes of Unemployment Effects of Unemployment on Economy Past trends how unemployment percentage increases and what are the factors behind them Representation of the trends through charts. Organization of the researched material Application of Statistical tools on the collected secondary data Third Phase (3-weeks): Interpretation based on the Statistical Analysis Conclusion LITERATURE REVIEW Kakwani, N. , and H. Son. Hyun (2006). This paper deal with the method of unemployment. The author say we should also take those people in account who are earning below substances level of income in the labour market. The proposed methodology was applied to Brazil’s unit record household survey for the period starting from 1995 to 2004. According to author those people who r underpaid also consider themselves unemployed, because they are working only to survive. Unemployment is generally defined as not working or working few hours but if a person works voluntarily but earns a lot of money then he/she should not be considered as unemployed. In this article a new method is introduced that combines two aspects of labour market (unemployment and under employment) and arrives at a new index of unemployment that satisfy certain desirable properties. Marvin, D. Krohn (1999). This article is based on the correlation analyses of two variable namely unequal distribution of income and the unemployment which are becoming the major causes of crime. The result when further tested indicated that there exists a moderate positive relationship between unemployment and homicide rates, however a small negative relationship is observed between unemployment rates and total crime rates. When these results were investigated further to see if some relationship were due to the effects of industrialization or because of some other factors it was observed that the zero order correlation among the total crime rates are not changed. The details of these results are also discussed in the reference of the article. K. Rukhsana (2003). In this paper explores the factors responsible for unemployment in Pakistan. It is hypothesized that population and GDP exerts strong impact on Pakistan’s economy. Direct relationship is assumed to hold between unemployment and population. In this article 13 year data is taken for analysis on which regression is run to obtain the required results. According to the results that were obtained it could be concluded that radical increase in population will remove the employment opportunity and in order to reduce unemployment rate high growth in GDP is suggested. Therefore In order to bring employment opportunities in the country government should look on to the two areas i. e. control population and work in direction that would result in GDP. Hyder , A. (2007) This article is based on the unemployment is rising with striking proportion majorly because of the appeal of the public sector jobs , not in terms of wages , but surprisingly in terms of fringe benefits. People avoid the private sector despite lucrative packages being offered and tend to form long queues in wait for the public sector jobs. The basic elements supporting such impractical decisions are the cultural trends, financial dependency on parents even at later ages, and low movement of individuals from one place to another also makes them feel well-settled and satisfied, saving them from acute unemployment stress. These factors effectively support an individual’s unemployment status for the longer time duration. Regarding to the greater availability of public sector jobs in the urban areas these issues are definitely more significant there. Ghayur, S (1996) says 5% is the unemployment percentage and absorption capacity is 3%. Those employed, quarter of them find work to meet half their subsistence requirements. A tenth find their work cannot keep them busy more than 35 hours a week. There are long working hours , working conditions are poor and hazardous to health. Free trade regime is direct threat to employment safety. Labour laws are fragmented and child labour is widespread. Labour force is estimated at 34. 74 million (1993-94). Males account for 94% of labour force between the ages of 24-54 years. About 16. 8% boys and 6. 9% girls of the age group 10-14 comprise labour force. There is widespread unemployment and those that employed are under paid, working in poor conditions and have labour laws that can’t protect them. There is great potential for employment sectors such as agriculture to further increase their employment percentages as they are under employing labour force as discussed in the preceding paragraphs. DATA Unemployment Rates: Sex and Age Table I Table II Table III Table IV Graph of the Unemployment Rates: Sex and Age Graph I Graph II Graph III The above three graphs represent relation of unemployment with age and sex. From the above graph we have concluded that the percentage of unemployment is minimum for men between age 35-39 from year 1999-2007. Whereas the age group representing lowest percentage of unemployment among females is 45-49 from 1999-2004. However then unemployment in the women between age group of 35-39 showed lowest percentage from 2004-07. Required data: From the above tables and graphs we seperated the figures that meet our needs and transformed them into separate tables which are given below( The graphical analysis of this data is in the analysis Part). Table-I UNEMPLOYMENT AND GDP Table-II UNEMPLOYMENT AND INVESTMENT Table-III UNEMPLOYMENT AND EXPORTS Table-IV UNEMPLOYMENT,INFLATION,EXPORTS AND INVESTMENT ANALYSIS BACKGROUND: We have selected three basic variables for analysis of unemployment rate over last 9 years. These include GDP growth, Investment and Exports. There are line and bar chart analysis of unemployment rate with all these three variables as well. In the end we have also conducted analysis of unemployment rate with respect to province, rural/urban and age wise. ANALYSIS OF UNEMPLOYMENT RATE VERSUS GDP GROWTH RATE Comparison of GDP with unemployment using frequency curve Comparison of GDP with unemployment using bar chart Analysis of GDP Growth Rate: Increase in GDP growth rate shall cause overall decrease in unemployment rate. It can be seen from above graphical analysis on the collected data that from year 1999 to 2001 there was a decrease in GDP resulting in an increase in unemployment. i. e. lesser the growth of economy means lesser number of jobs thus increased unemployment. But as during the period of 2001-2002 Musharraf government took some drastic steps like creating jobs in IT sector thus there was a decrease in unemployment despite decrease in GDP and investment. On the other hand there was a steady growth in GDP from year 2002 onwards especially growth of services sector which included telecom, transport etc. , resulting in decreased unemployment. When Musharraf’s regime had established itself as stable government to the rest of the world especially after the first elections the economy of the Pakistan was at its peak. GDP growth, spurred by gains in the industrial and service sectors, remained in the 6-8% range in 2004-06. In 2005, the World Bank named Pakistan the top reformer in its region and in the top 10 reformers globally. ANALYSIS OF UNEMPLOYMENT RATE VERSUS INVESTMENT GROWTH RATE Comparison of investment with unemployment using bar chart Analysis of Investment Growth Rate: Increase in investment will cause a decrease in unemployment. It can be seen that there was an increase in investment for years 1999-2001 but even then unemployment increased due to the fact that as the investment is always committed first and jobs are created later. But increase in investment had started to impact decrease in unemployment after year 2001 onwards. Overall there was a increase in investment thereby decreasing unemployment as it is clearly evident from the line and bar charts. ANALYSIS OF UNEMPLOYMENT RATE VERSUS EXPORT GROWTH RATE Comparison of export growth rate with unemployment using bar chart Analysis of Export Growth Rate: Increase in exports will cause a decrease in unemployment as more jobs are created for export related activities. It is observed from the collected data’s graphical analysis that exports for the year 1999-2000 registered a negative growth of -9. 8% thus there was a resultant increase in unemployment for the same period. But for the year 2000-2001 there was a high growth of 10. % in exports met by decrease in unemployment in later years. Exports continued to keep a same level of growth from 2001 to 2003 with almost 0 % growth for year 2002-2003 as compared to previous year. Thus there was an overall decrease in unemployment. But for the year 2003 when exports registered -0. 7 % growth there was a simultaneous increase in unemployment. For the rest of the years Pakistan did not register any negative export growth thus unemploy ment as a whole also decreased. ANALYSIS OF UNEMPLOYMENT RATE PROVINCE WISE Bar chart of unemployment rates in provinces Analysis of Unemployment Rate Province Wise: From the above graphical analysis we can see that in 1999 the unemployment was very high as compared to 2007. The reduction in the province wise unemployment is the result of overall reduction in unemployment all around the Pakistan. As Pakistan was recording high GDP growth rates from 2003-04 to 2006-07, overall the economy of the Pakistan was on the rise. The political and law and order enforcement situation was very stable, the Telecom sector was expanding a great deal in all the provinces which was creating a lot of jobs. During this period there were many public sector development programs in progress especially in underdeveloped areas which were offering jobs. ANALYSIS OF UNEMPLOYMENT RATE RURAL/URBAN WISE Bar chart of unemployment rates rural and urban areas Analysis of Unemployment Rate Rural/Urban Wise: From the above bar diagram we can see that unemployment from 1999-00 to 2006-07 in both rural and urban areas decreased from 8. 1 to 4. 75% and from 10. 2 to 6. 7% respectively. In 1999 Pervez Musharraf took over the Government, because of which most of the countries in the world stopped supporting Pakistan and Pakistan had to suffer a lot of crises. When this govt. got stable and the countries of the world started to open up their relations with Pakistan then there was a lot of aid coming from all the developed countries which stabilized Pakistan’s financial condition. After 9/11 Afghan war also started and Pakistan got a lot of financial support from USA and many other countries of the world which acted as a cushion to Pakistan’s external and internal account deficit conditions thereby allowing spending to other developmental projects in rural and urban areas so as to reduce overall unemployment. From 2003 onwards there was a Telecom and IT boom in Pakistan. Musharraf Govt had steadily risen developmental spending from 2003 onwards, including a 52% real increase in the budget allocation for developmental projects in FY07, a necessary step toward reversing the broad underdevelopment of its social structure. Even the reconstruction of the devastating Kashmir earthquake in 2005 created a lot of jobs for the people of Pakistan who contributed in different ways. During this period govt. was stable and there was peace all over the country, so there was a lot of investment committed to Telecom sector which created many jobs for the urban population. Also govt. ook many projects on its own to computerize almost all the ministries and associated departments like NADRA which also increased opportunities for computer literate persons. Many people started their own businesses in big cities which resulted in creating job opportunities for many people. Because of these reasons there was noticeable decrease in unemployment all around the Pakistan. ANAL YSIS OF UNEMPLOYMENT RATE AGE AND GENDER WISE 3-D bar chart showing unemployment with respect to age and gender in different years Where: F= Cumulative Frequency. Where: F= Cumulative Frequency. Analysis of Unemployment Rate Age Wise: It can be seen that overall unemployment rates are highest for 60 years and above age group as it is retirement age and very few jobs exist if any for such a age group in the country. Followed by this group, the high unemployment rate is in the age group of 10 to 19 years of age. Also such people are either employed in such sectors which fall in child abuse or not employed at all. Unemployment rate is lowest for 30 to 49 years of age group people. As such a age group has gone through enough of hard time and gained enough experience so as to ultimately find some good stable job and settle. On the other hand age group people of 20 to 29 years of age have high unemployment rate due to the above mentioned settling process that they are in. But still there are more job opportunities for 20 to 29 years of age group age group than 10-19 years of age group thus overall lower unemployment rate. CONCLUSION: Since unemployment is one of the major problems of Pakistan and the level of unemployment is moving up. The socio economic system of the country and institutions has failed to provide employment to the increasing labor force. The rate of expansion in industrial sector is very slow. The increasing labor force has not been absorbed. Increasing output of general education institutions is the major cause of educated young men’s unemployment. Technical, professional and vocational institutions are limited in number. We have also concluded that the high share of highly educated unemployed person indicate a lack of sufficient professional and high level technical jobs. Another variable that could be impacting this ratio in a positive way is that many qualified jobseekers might be accepting employment below their skill level, or underemployment. It is interesting to note that the levels of education of unemployed females are relatively high. When looking at the unemployment rates by education level, women have seen a significant decline in levels below intermediate, but only a minor drop in the rate at degree level since 1999. There are several possible explanations for this. One explanation, as reflected in employment by status and employment by sector indicators, points at labour market segregation along gender lines, which is confirmed by research on the occupational distribution of the employed disaggregated by sex ( Nasir, 2005). Therefore, barriers may prevent women from obtaining employment in high skilled jobs for which they are qualified at (PET, 2007). Another explanation for the relatively high educational attainment levels of female unemployed is a mismatch between the skills required and those supplied. Indicators regarding the (pre employment) educational attainment of the labour force are not sufficient to assess the extent to which the education and training system provides the skills that are required by the economy. Moreover no career guidance, lack of awareness regarding available jobs, high expectations without commensurate experience, little understanding of work ethics and the weak economy. This situation can be improved by small enterprise development (SED) activities, entrepreneurial and technical skills, increased financial resources and management skills, and increased participation of women in economic activities providing more income for the family as compared to a single breadwinner. Government has initiated many unemployment reduction programs some of them worked but not to large extent ,if these programs had worked there will be not only increased unemployment but also decrease in poverty will be observed as people get more jobs poverty will be eliminated from the society. Due to increased terrorist attacks uncertainty has also increased and many multinational and foreign companies are not willing to set up their business in Pakistan this had also hindered the opportunities of unemployment. GOVERNMENT POLICIES: 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. Recognition of this right is duly acknowledged in the Constitution of Pakistan. The article 38 of the Constitution states that â€Å"the State shall provide for all citizens †¦. facilities for work and adequate livelihood with reasonable rest and leisure†. In fact, the state is also required to provide social security by compulsory social insurance as well as basic necessities of life to those permanently or temporarily unable to earn livelihood. The Government is pursuing policies that motivate and promote the private sector, whereby its role is expanded in employment augmenti ng activities. Though the private sector is responding, the growth is largely concentrated in the informal sector. The informal sector is not preferred as it has low wages and largely poor working conditions. In rural areas, agriculture is the mainstay but the average land holdings are small and corporate farming as yet to take grounds. †¢Making employment central in economic and social policy making, †¢ †¢Emphasis on both the quantity and quality of jobs generated in the economy. †¢Increasing employment intensity of growth and creation of decent employment through appropriate macro, trade, labor market and sectoral policies. †¢Strengthen institutions to create an efficient and equitable labor market. Active involvement of employers’ and workers’ organizations and civil society in formulation of employment policy. †¢Create favorable conditions for growth of the private sector especially SMEs and other labor absorbing sectors. †¢Create a competitive and productive world class labor force, and Strengthen institutional machinery for employment policy making, HRD and monitoring labor market development PROGRAMS INITIATED BY GOVERNMENT: The Public Sector Development Program (PSDP) for the fiscal year 2004-05 has been increased to Rs. 202 billion, a 26 percent increase over 2003-04 PSDP of Rs 160 billion. Since the focus of PSDP for 2004-05 has been on accelerating growth, increased funds for PSDP would mean enhancing public sector investment to generate employment thus raising overall growth. Employer-led Skill Development Councils developed by Ministry of Labor Manpower and Overseas Pakistanis, has been established in all provinces to identify needs of geographical area, prioritize them on market demand and to facilitate the training of workers through training providers in public and private sectors. These councils have met the diversified training needs of the industrial and commercial sectors and have trained 46, 674 persons so far. Technical and vocational training enhances the employability of the work force. There are 315 training institutes under NTB across Pakistan, which also includes all TEVTA institutions in Punjab. They offer vocational courses in 80 trades and the net output capacity of these institutions is 150,000 per year. At present the training capacity of 28,050 trainees is available under the Technical Education and Vocational Training Authority (TEVTA) Punjab and the other Provincial Directorates of Manpower and Training. Besides 8807 apprentices are being trained under the Apprenticeship Training Program in the country. A Ten Year Perceptive Development Plan for the period 2001-11 is under implementation and accelerating GDP growth and reducing unemployment are among its major goals. This plan envisages creating 11. 3 million new job opportunities through investment of Rs. 11287 billion during the Plan period. As a result of developmental efforts of the government, GDP growth rate has started picking up. It was 5. 1 percent in 2002-03, increased to 604 percent in 2003-04 and is around 7 percent in 2004-05. On the other hand, the population growth rate, which was 1. 99 percent in 2003-04, has declined to 1. 9 percent in 2004-05. Both the parameters have helped to make dent in the unemployment situation as result of which the unemployment rate has declined from 8. 3 percent in 2001-02 to 7. 7 percent in 2003-04. Small and Medium Enterprises (SME) represents a signifying component of Pakistan’s economy in terms of value. They are highly labor intensive and provide employment to the bulk of the non-agricultural labor force. The growth of SMEs has mainly been hampered by the non-availability of credit in the past. Realizing this constraint the government has opened two specialized non-credit banks namely, the SME Bank and Khushali Bank. The Small and Medium Enterprises Development Authority (SMEDA) is also actively developing program for managerial skill development and technical and informative support to the SMEs. The SME Bank was established on January, 1, 2002 with the primary objective of providing financial assistance and business support to small and medium enterprises. A large number of SMEs are being financed under its program lending scheme namely â€Å"Hunarmand Pakistan Scheme† in such businesses as fan manufacturing, cutlery, manufacturing, surgical instruments, doctors and dentists clinic, women entrepreneurs, CNG stations, auto looms, auto parts manufacturing, furniture manufacturing, motorcycle rickshaws etc. Up to 31st January 2005 the SME Bank financed 4522 SMEs and disbursed loans amounting to Rs. 3031. 57 million and has been successful in creating 9044 employment opportunities in the country. Realizing the importance of microfinance in improving the lives of the poor people, the government has established Khushhali Bank in 2000 – a microfinance institution – under a public-private partnership program. It has also encouraged private sector to setup microfinance banks in Pakistan. So far three microfinance banks have become operational during 2001-04. Two applications for setting up microfinance banks in private sector are under process for licensing. The outreach of these four institutions has increased to half a million households in just 4-5 years. In the next five years the outreach will increase to three million households. The Khushhali Bank alone has so far disbursed Rs. 4. 5 billion and nearly 33 percent of its clients are women. The services of these institutions will be the most effective instruments in improving the lives of the poor people in both urban and rural areas. The housing and construction sector provide substantial additional employment opportunities as it contributes through a higher multiplier effect with a host of beneficial forward and backward linkages in the economy. The sector, through linkages effect with about 40 building material industries, supports investment and growth climate and help reduce poverty by generating income opportunities for poor households. During the last two years, the government has taken various budgetary and non-budgetary measures, which are now yielding positive results. Construction activity in Pakistan is booming; demand for construction-related materials has surged. Many national and international real estate developers have launched or launching large construction projects in Pakistan, which has further accelerated construction activity in the country. Pakistan Poverty Alleviating Fund (PPAF) was set up in April 2000 with an endowment of $ 100 million, as a wholesale lender to NGOs engaged in providing micro financing. PPAF, as of 31st Dec 2004, is present in 94 districts across Pakistan, it has 52 partner organizations. So far it has made disbursements of Rs. 8. 2 billion and it has around 7 million beneficiaries. The government has so far spent one thousand billion rupees on pro-poor sectors in the last five years. Economic growth is the engine of employment generation and poverty alleviation. In order to sustain this spectacular pace of growth and maintain healthy and vigorous macroeconomic indicators would require a prolonged period of macroeconomic stability, financial discipline, and consistent and transparent policies. These, along with improved governance and better quality infrastructure would encourage private sector to play a leading role in promoting investment and growth. The government on its part must identify and promote sectors, which are considered not only to be the major drivers of growth but also have the greatest potential of creating more employment opportunities. Since it took almost a decade for unemployment and poverty to reach at this level, it would be unreasonable to expect that both unemployment and poverty will decline in the short-run. But this does not mean that it is an unattainable objective. REFERENCES: Ghayur,S (1996) Labour Market Issues in Pakistan: Unemployment, working Condition, and Child Labour, the Pakistan Development Review, Pakistan Institute of Development Economics, Vol. 35 (4), pages 789-803. Hyder, A (2007) â€Å"Preference for Public Sector –Jobs and Wait Unemployment†, Pakistan Institute of Development Economics, (Working Paper No20). K. Rukhsana (2003), Population and Unemployment: A Dilemma to Resolve,† The Icfai University Journal of Applied Economics â€Å"Vol: 3 August, pp. 7-15. Kakawani, N. , and H. Son. Hyun (2006), A Note on Measuring Unemploymentâ€Å"International Poverty center, United Nation Develop Program†. September2006 (Working Paper No 28). Marvin D. Krohn (1999), Inequality, Unemployment and Crime: A Cross-National Analysis, The Sociological Quarterly, Vol. 17, No. 3, pp. 303-313. Federal Bureau of Statistics (2001-02), Labour Force Survey 2001-02, Government of Pakistan, Statistics Division. Federal Bureau of Statistics (2003-04), Labour Force Survey 2003-04, Government of Pakistan, Statistics Division. Federal Bureau of Statistics (2005-06), Labour Force Survey 2005-06, Government of Pakistan, Statistics Division. Federal Bureau of Statistics (2006-07), Labour Force Survey 2006-07, Government of Pakistan, Statistics Division. Papua†What is unemployment†. Online posting 18 November 2007. Reader Responses, Wise Geek Journal http://www. wisegeek. com/what-is-unemployment. htm 2. Jobs in Pakistan, Jobs in Middle East† Berozgar job article section Friday, June 13th, 2008 at 11:44 am, December 22, 2008 http://bayrozgar. com/blog/2008/06/13/pakistan-unemployment-causes-and-solutions/ 3. †Pakistan unemployment rate†CIA world factbook 16 May 2008, December 22,2008 http://indexmundi. com/pakistan/unemployment_rate. html ANNEXURE Table-1 Table-2 Table-3 Table-4 Civilian Labour Force Employed and Unemployed: Pakistan and Provinces Table-1 Table-2 Table -3 Table-4 Distribution of Population: Education and Sex Table-1 Table-2 Table-3 Table-4 Unemployment Rates by Area and Sex Table-1 Table-2 Table-3