There are three factors driving this urbanization: Urban areas’ natural increase in population, the movement of people from rural to urban areas, and the reclassification of previously rural communities as urban. Over the longer term, perhaps the faster pace of development in urban areas, bringing with it greater job opportunities, is another key factor attracting people, particularly youth.
According to the Economic Survey of Pakistan, the total number of youths registered as university students in 2017 is estimated at 1.33 million, of which 0.6 million are female. There are 3,905 technical and vocational institutes in the country, of which 1,514 are for women. There are 0.32 million people enrolled in these technical institutes, 0.11 million of them women.
The Labor Force Survey of Pakistan 2014-15 indicates that labor-force participation among 15-19-year-olds is 47.55 percent for men and 18.01 percent for women. For 19-24-year-olds, the participation rate increases to 82.32 and 25.74 percent, respectively. Despite a low participation rate among women in formal markets, these numbers still represent large human resource potential.
There has been lower demand for Pakistani workers abroad, with many returning from the Gulf. Accommodating these workers at home requires reforms to create more private sector jobs and open urban spaces to startups. This will only happen if pro-business zoning and building regulations are introduced, rental laws are strengthened, and commercialization of idle spaces is allowed.
This will also better serve Pakistan’s increased number of university graduates, many of whom end up in the services sector. But despite this sector being the largest component in Pakistan’s national income, it still has a low share of exports. Only recently has the federal government committed to put in place a strategy to boost services exports by promoting information, communication technologies and e-commerce.
Domestic markets continue to suffer from distortions due to a high degree of government participation, excessive and cumbersome regulation, regressive taxation and lack of competition. But e-commerce may provide a way to bypass some of these problems.
There has been lower demand for Pakistani workers abroad, with many returning from the Gulf. Accommodating these workers at home requires reforms to create more private sector jobs.
Dr. Vaqar Ahmed
First, the social enterprise revolution in Pakistan, which has given rise to many successful startups in urban areas, may not have been possible without the availability of an increasing number of smartphones in the hands of educated low- and middle-income Pakistanis, and some basic e-commerce platforms in the country. People worldwide are now able to procure products made by these social enterprises in Pakistan.
Second, e-commerce, as experienced by local purchasers, is relatively more consumer-friendly, at least in transactional terms.
Third, e-commerce has made product and market diversification easier for suppliers.
Fourth, past beneficiaries of social safety nets are now able to seek help from dedicated e-commerce portals to display their output and see their incomes increase over time.
Finally, young entrepreneurs are now indulging in online freelancing from home, without the need to incur the costs of entering the distorted rental market for offices in urban centers.
These are encouraging prospects for the urban youth, and can be supported via appropriate, inclusive policies that bring down the cost of doing business in Pakistan. Perhaps having a large number of youths online is a great opportunity for the country that should not be missed.
• Dr. Vaqar Ahmed is deputy executive director at the Sustainable Development Policy Institute (SDPI). He has served as an adviser
to the UN Development Programme (UNDP), and has undertaken assignments with the Asian Development Bank, the World Bank, and the Finance,Planning and Commerce Ministries in Pakistan.