Unemployment: A menace to the local economy

Unemployment is a critical is­sue in Pakistan, with significant consequences for the local economy. According to the Pakistan Bureau of Statistics, the unemployment rate in the country was 6.8% in 2020, with an estimated 6.5 million people un­employed. This problem is particu­larly acute in rural areas and among the youth, where unemployment rates are even higher.

The impact of unemployment on the local economy is far-reaching and can be seen in various sectors. One of the most significant im­pacts is on household incomes, as unemployed individuals and their families may struggle to make ends meet. This can lead to pover­ty, food insecurity, and an inabili­ty to access basic services such as healthcare and education.

The local economy also suffers from a lack of productivity and in­novation when there is high unem­ployment. With a large portion of the population not participating in the labor force, the economy is un­able to fully utilize its potential for growth and development. This can lead to a lack of economic diver­sification, a lack of investment in new technologies and infrastruc­ture, and a lack of opportunities for businesses to expand.

Furthermore, unemployment also has a direct impact on the gov­ernment’s budget as it leads to an increase in social welfare spend­ing and a decrease in tax revenue. The government must spend more money on providing assistance to the unemployed and their fami­lies, while at the same time, it re­ceives less revenue from taxes as the unemployed are less likely to be paying taxes.

The government has implement­ed various policies and programs to address unemployment in Pak­istan. These include job creation schemes, such as the Prime Minis­ter’s Youth Training Program, and the establishment of special eco­nomic zones to attract foreign in­vestment. Additionally, the govern­ment has also introduced policies to support small and medium-sized enterprises, such as microfi­nance schemes and tax incentives.

However, these policies have had limited success in reducing unem­ployment. The main reason behind this is the lack of implementation and monitoring of these policies, as well as the lack of coordination among different government de­partments and agencies. In conclu­sion, unemployment is a critical is­sue in Pakistan, with significant consequences for the local econ­omy. It has a negative impact on household incomes, the business sector, and the government’s bud­get. The government has imple­mented various policies and pro­grams to address unemployment, but these have had limited success due to a lack of implementation and coordination. To effectively address unemployment, the government needs to take a comprehensive ap­proach that includes improving the education system, increasing in­vestment in infrastructure, and cre­ating an enabling environment for businesses to grow and create jobs.

RAYAAN MIRZA,

Lahore.