According to the estimates of the ILO the unemployment rate increased from 5.9 percent in 1999 to 7.8 percent in 2001 with an indication suggesting its rise in 2002. The unemployment problems have been compounded by slow growth, large budget deficits and low level of investment - mainly due to security concerns. Though efforts were made to control fiscal deficits by applying drastic cuts in the development spending but the result as expected was increase in poverty and unemployment. The development spending (as percentage of GDP) has fallen from 7% to about 3% since 1990. As a result the deficit has narrowed down but not without increasing poverty and unemployment which can be judged from the fact that there was a significant and historical reversal of the changing structure of employment in Pakistan. The public sector which was the major employer over a number of years has not been maintaining that level in the face of economic crises. Currently there are not many opportunities in other sectors of the economy in the face of drought and water shortages. The GDP growth for the year 2002-03 is expected around 4.5% with the possibility of increase of 1% in the following year.

According to ILO the average annual labour force growth in Pakistan is expected to remain at 3.3% between 2000-2010 adding 2.3 million workers to the labour force every year. Their employment seems to be an uphill task and various ways and means have to be found to tackle this nightmarish scenario particularly in view of the global economy, which is in doldrums at present. From America to Australia and Iceland to Ivory Coast all the countries of the world are passing through a very crucial phase. All are facing a major slow down in their economy associated with rising poverty and increasing unemployment. A new ILO study suggests that number of unemployed worldwide grew by 20 million since the year 2000 to reach a total of 180 million at the end of last year. To absorb new entrants into the labour market and reduce poverty and unemployment at the global level, atleast one billion new jobs are needed during the coming decade to get on track for achieving the UN goal of halving extreme poverty by the year 2015.

Surprisingly when all the countries of the world are facing economic crunch the only exception to this worrying scenario is the Chinese economy. According to Yao Jingyuan, Chief Economist of the National Bureau of Statistics, the Chinese economy has entered into a new round of development. According to him, every economic indicator has shown rapid growth and the quality of growth and efficiency for improvement has increased markedly. The growth rate in China for the last year stood at around 9.9% and this performance in the context of global economic slow down was both astonishing and remarkable. The growth was mainly due to stable and continued macro-economic policies, continued strengthening of micro economy and a positive effect of the continued role of the World Trade Organization. No doubt the Chinese has been the fastest growing major economy during the past several years and is likely to remain so in the year 2003 and thereafter.

The economists, planners and thinkers throughout the world agree that South East Asia is the region which will witness the economic boom during the current and next decade and when one talks of South East Asia, China surely is the country where major economic developments will take place and will in fact be the driving engine of the neighbouring country like Korea, Malaysia and India. Because of economic boom not only will they be able to reduce unemployment and poverty - the two major social evils - but in the process increase the per capita income of their people thereby providing more health & education facilities and better quality of life to their citizens, which is the goal of every welfare state and dream of every family.

Coming back to the unemployment problem in the context of Pakistan, there is an urgent need to draw up a National Employment Agenda which would show how highest priority can be given to "employment generation" in policy making both at the Federal and Provincial levels. With new employment opportunities hard to find, frustration, despondency, social evils, rising crime rate are natural consequences. The poverty ratio, due to rising unemployment rate over a number of years, has resulted in sharp up-surge in the poverty rate which has increased from 32% to 43% from the year 1999 to 2003 according to an Asian Development Bank report. This is a forbidable challenge and the war on unemployment has to be fought on many fronts, foremost amongst them being increased public sector allocations, creating congenial atmosphere for investment, addressing law and order issues and encouraging private sector coupled with opportunities of availability of credit at reasonable rate for opening of new businesses. As almost 50% of the labour force in Pakistan is engaged in agriculture, measures to reduce under employment need to be taken through channeling increased expenditure on fiscal and social infrastructure in agriculture sector. Training and skill development is another area where there is an urgent need to strengthen and reform the existing system in keeping with the changing trends and new fields worldwide. An educated and skilled workforce is a pre-requisite for providing the best workers in an increasing competitive global economy.

Another area, which needs urgent Government attention, is the gender discrimination in the labour market. According to an ILO report, the unemployment rate amongst the female workforce is about 31%. There is a very high level of supply of female work force in the Urban & Rural areas showing the differences in the ratio of female workers in the labour market., As such lack of gender participation and discrimination not only hinder the growth potential of the economy but also arrests the social and legal frame work of distributive justice. Need of the hour is to encourage women participation in employment work force stream by creating conditions conducive for them. One of the reasons why in developed countries of the world one sees affluence is because both men and women work hard in glore thereby contributing to increased GDP & improving their standard of living in the process.

It is, therefore, imperative, that conditions for increasing growth rate and creation of jobs, both in private and public sectors receive top priority by the policy planners, as it is an urgent need of the hour. No doubt this is a major task particularly because of the global economic slow down but this is a challenge that has to be taken to bring the country back on the track which leads to success. There is no way out.