Education, govt and a fractured job market

Education Emergency Pakistan, a report published by the Pakistan Education Task Force (ETF) highlights the plight of education in Pakistan, labelling it an education emergency that threatens tens of millions of children. According to the report, roughly one in ten of the world’s primary-age children who are not in school live in Pakistan, placing Pakistan second in the global ranking of out-of-school children.
With approximately 40 per cent of the population under the age of 15, Pakistan faces an education crisis which threatens to have profound human, social and economic consequences. The Pakistan Education Statistics handbook, most recently available for 2007-2008, notes that only 29 million of Pakistan’s 70 million children under the age of 15 are enrolled in school. This means that nearly 41 million kids are out of school, representing 60 per cent of the youth.
These statistics do not mean that those with access to education are any better at securing employment. Ever since the fateful events of September 11, 2001, transpired, the world as we know it, took a turn for the worse, especially in our part of the world. The collapse of the twin-towers led to a 10 year phase of war in Iraq and Afghanistan. The latter being our neighbour meant that Pakistan could not expect to go through this 10 year phase ‘untouched’. The consequences of the “war on terror” have been felt throughout the world but more so in a third world country like Pakistan where economic inactivity, years of governmental mismanagement and a depletion of resources have contributed towards presenting a bleak picture. The 90’s were a time when emerging economies started to show signs of rapid growth with the result that India and China find themselves being labelled as one of the fastest growing economies of the world now. Pakistan, slowly but steadily was also on a path of reasonable if comparatively slower economic growth. But since the events that unfolded during the last 10 years we find ourselves in a constant spiral of downward progression.
Foreign Direct Investment or FDI refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments. It usually involves participation in management, joint-venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative) and “stock of foreign direct investment”, which is the cumulative number for a given period. Direct investment excludes investment through purchase of shares. There have been a number of studies that have shown that FDI leads to job creation, growth and poverty reduction in host countries in four ways. Firstly, FDI often generates new employment (direct employment is higher in green filed investments) and creates jobs (indirectly) through forward and backward linkages with domestic firms. Estimates for a number of developing countries indicate that FDI has a multiplier effect on domestic employment. Secondly, a number of studies have shown that MNEs(Multi-national enterprise) pay higher wages than domestic firms even after controlling for firm and worker characteristics. Furthermore, the presence of multinationals sometimes generates wage spillovers: wages tended to be higher in industries and in provinces that have a higher foreign presence. Thus FDI eventually boosts wages in host countries. Thirdly, one of the most common and least expensive ways by which foreign technology gets diffused in host countries’ is through labour turnover, as domestic employees (especially employees in higher level positions) move from foreign firms to domestic firms. Indeed, foreign firms sometimes pay higher wages in order to retain their workers, and thereby prevent domestic firms from appropriating their superior technology. But overall, FDI leads to technological transfers. Lastly, FDI enhances the productivity of the labour force in the host country. Several studies have shown that workers in foreign owned enterprises (FOEs) are more productive than workers in domestic owned enterprises (DOEs).
The current law and order situation in the country in the aftermath of 9/11, coupled with governmental inefficiency and bureaucratic mismanagement have meant that FDI inflows have declined significantly. The result is that even though the number of educated/qualified people is on the rise in the country there aren’t enough jobs to accommodate them. Majority of the current Pakistani workforce is either underemployed or underutilized. This has led to a chronic state of hopelessness and frustration amongst our educated youth.
The energy crisis that Pakistan is currently facing is another factor that has led to a decrease in production and economic activity, which in turn has had a huge impact on job creation and employment. The high costs of energy produced by the use of fossil fuels leads in turn to a high per unit cost of production. A high per unit cost of production, in turn leads to higher prices of finished goods and since the world has shrunk due to globalization, a higher cost of production means that somewhere in the world, where energy and per unit costs are significantly lower, a competitor producing the same product but at a much lower cost, will outsell your product and thus render your business obsolete and not financially viable. Pakistani businessmen are therefore moving their production units to countries where the per-unit costs will be lower so that they could gain a price advantage in the international market. China and Bangladesh feature highly in this regard.
The number of educated and unemployed Pakistanis is on the rise. They have university degrees but lack employment opportunities. This is a dangerous scenario. In a country where happiness generally is on the decline whereas the only thing that is going up on a daily basis is inflation, unemployed youth have no output for their energies. This has lead to an overall feeling of despair and hopelessness. Amjad is a 24 year old Pakistani male. He has a Bachelor’s degree in Sociology and Journalism and an MBA in Marketing. “My father retired last year. I am the eldest of my siblings. I have three younger sisters. I had been unemployed for the past 7 months. Out of my MBA class of 40 students only 4 have been able to find jobs so far. Due to financial difficulties and not being able to find a suitable job I was forced to start teaching at a local school to FSc students. I am being paid rupees 12 thousand per month. At times I wonder if I did the right thing in pursuing my Master’s degree. My family could have saved up on the money that they spent on my education which could have been used towards getting my sister married. Am I satisfied with my job you ask? It depends on how you define satisfaction. If satisfaction means being able to afford two meals a day for my family of 6 then I’d say that yes, I am satisfied. Provided that I use my pay for buying wheat and grains only. Saving up would have been an option if the money lasted. All I really wanted was for me to provide a better life to my family.” Smiling, and with a hint of irony he adds “Guess I’ll have to tone down my ‘high’ aspirations.” Amjad’s case highlights the hopelessness that currently prevails amongst the youth of Pakistan. In most countries of the world, completing your Master’s and being awarded a degree is a time of hope and happiness. Looking forward to a bright future ahead. Eyes burning with a glitter of positivity that “yes, I have managed to accomplish atleast the bare minimum with which to proceed towards the next step in life.” But in Amjad’s case and thousands of other similar cases, there seems to be no hope of ever breaking the barriers from one social class to another. With inflation as it stands, millions of educated Pakistanis who are barely able to make ends meet are further pushed down the ladder. Soaring prices of food items, ever increasing electricity costs, lack of proper public transport facilities and a host of other issues keep pushing ordinary Pakistani’s like Amjad to the brink of annihilation.
Pakistan is a country blessed with resources. Be they natural or human. This is a country that has the second largest coal deposits on the planet yet still produces energy through fossil fuels with the “help” of rental power projects. Hydro energy is a lot cheaper yet the Masters of our destinies fail to recognize this obvious fact. Day in, day out we speak of a lack of education in this country but if we look at the opportunities that lie ahead for our educated youth can we really blame them for not pursuing further academic excellence when they are not even able to feed their families? The state that we currently find ourselves in is a mixture of our own failings and lack of planning for the future. All we need to do is to start planning for the next 50 or so years. Nations that keep dwelling on their past cannot accomplish anything in the future. The hopelessness and despair that currently prevails amongst our youth is a dangerous virus that is consuming us and is a major impediment towards prosperity and growth. Chronic mismanagement and lack of proper planning are bringing a nation that has the potential to reach insurmountable heights, to its knees. Our youth does not need democracy. Neither do we need dictatorship. What we need is governance that is in the best interests of this nation as a whole. We have sufficient resources to be able to help ourselves. The lack of self belief amongst us will start vanishing once the right set of conditions are set in place to take us into the next 50 years or so. What we need to start doing for now though, is setting up a blueprint for our success and that of our future generations. We need to start thinking of ourselves as Pakistanis first and as residents of our respective provinces later. As Martin Luther King. Jr. said “The question is not whether we will be extremists, but what kind of extremists we will be. The nation and the world are in dire need of creative extremists.” Let the world label us as extremists. What we need to show them is that we used our creativity to overcome all odds and thus prospered.

The writer has a postgraduate degree in Business Administration and is a freelance journalist. He can be contacted at [email protected] Pakistan is a country blessed with resources. Be they natural or human. This is a country that has the second largest coal deposits on the planet yet still produces energy through fossil fuels with the “help” of rental power projects. Hydro energy is a lot cheaper yet the Masters of our destinies fail to recognize this obvious fact. Day in, day out we speak of a lack of education in this country but if we look at the opportunities that lie ahead for our educated youth can we really blame them for not pursuing further academic excellence when they are not even able to feed their families? The state that we currently find ourselves in is a mixture of our own failings and lack of planning for the future. All we need to do is to start planning for the next 50 or so years. Nations that keep dwelling on their past cannot accomplish anything in the future. The hopelessness and despair that currently prevails amongst our youth is a dangerous virus that is consuming us and is a major impediment towards prosperity and growth. Chronic mismanagement and lack of proper planning are bringing a nation that has the potential to reach insurmountable heights, to its knees. Our youth does not need democracy. Neither do we need dictatorship. What we need is governance that is in the best interests of this nation as a whole. We have sufficient resources to be able to help ourselves. The lack of self belief amongst us will start vanishing once the right set of conditions are set in place to take us into the next 50 years or so. What we need to start doing for now though, is setting up a blueprint for our success and that of our future generations. We need to start thinking of ourselves as Pakistanis first and as residents of our respective provinces later. As Martin Luther King. Jr. said “The question is not whether we will be extremists, but what kind of extremists we will be. The nation and the world are in dire need of creative extremists.” Let the world label us as extremists. What we need to show them is that we used our creativity to overcome all odds and thus prospered.

The writer has a postgraduate degree in Business Administration and is a freelance journalist. He can be contacted at [email protected]