Unemployment Crisis Set to Worsen in Pakistan

The global economic slowdown due to bottlenecks in overall growth is expected to increase unemployment in the Asia-Pacific region, with millions in countries like Pakistan opting for informal income streams to earn a living.

The International Labour Organisation (ILO) in its report “Asia-Pacific Employment and Social Outlook 2022: Rethinking sectoral strategies for a human-centered future of work” observed that the number of persons employed in 2021 was 35 million below where it might have been if the slowdown never happened.

This gap narrowed further to 22 million in 2022 but is projected to increase again to 26 million in 2023.

The report notes that three years after the beginning of the COVID-19 pandemic, the global economy has continued in crisis mode, facing a volatile and highly uncertain environment mixed with geopolitical challenges and climate-related events. Recent examples are the flooding in Pakistan and the heat wave that struck several provinces in China.

The region is also not spared by economic, political, or humanitarian crises, as Afghanistan, Myanmar, and Sri Lanka demonstrate.

Country-level data on informal employment is sparse. Where it exists with a recent time series, the data indicate spikes in the informal employment rate between 2019 and 2021 for some countries. For instance in Pakistan (Q2 2019–21), informal employment added 3.5 million persons and the informal employment rate increased from 81.9 percent to 83.5 percent.

In broader terms, issues such as climate change and environmental fragilities are taking a heavy toll on the Asia–Pacific region. In 2021, the region accounted for 190 natural disasters, which was more than half of all disasters worldwide that occurred in that year. Countries in the region continue to suffer from major natural disasters, including the devastating floods in Pakistan and the record-breaking heat wave affecting some provinces of China.

Employment shrank between 2019 and 2021 in 11 of the 21 sectors examined. The loss of jobs in the accommodation and food service activities links to the severe drop in tourism in many countries in the region. The sector’s steady expansion in contribution to total employment in the Asia Pacific region was halted by the COVID-19 shock.

In 2021, employment in the sector remained at least 5 percent below pre-crisis figures in three-fifths of the Asian–Pacific countries. Employment losses remained at least 10 percent below the 2019 level in ten countries.

Manufacturing employment experienced sizable increases in certain South East Asian countries (Cambodia, Malaysia, Timor-Leste, and Vietnam), in the Pacific (Australia, Papua New Guinea, Samoa), and in Bangladesh, Nepal, and Pakistan in South Asia.

Further breakdown of the historical data shows that five of the ten sectors that experienced the sharpest job loss in the region were those with large concentrations of women workers. Women were also well represented in six of the sectors that showed job growth during the period, although not in the four sectors of strongest growth (construction, warehousing, utilities and IT, and other information services).

The report remarks that new technologies and their expected impact on jobs and earnings are widely viewed as positive across the region. Governments are increasingly applying technology in ways that can bring positive results to formalization, expand the provision of social services, and better monitor and enforce labor laws.

New technology and the potential associated with digitalization are also lauded as the means to improve opportunities and conditions of work across a wide spread of sectors, it added.

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