When people don’t have jobs, they feel frustrated. And if they see no light at the end of the tunnel, their frustration morphs into deep despair, leading them to engage in a range of undesirable behaviours, including begging, theft, forming gangs, or becoming an instrument of anti-state elements.
That said, let’s look at the findings of the Labour Force Survey 2024-25: 1.4 million more people became jobless in the last four years, and the unemployment rate hit a 21-year high of 7.1 per cent. This means 5.9m men and women remain unemployed in our country, whose 250m population continues to grow at more than 2pc per year.
What is alarming is that the unemployment rate is higher among the 15–24 age group — 12.8pc in 2024–25, up from 11.1pc in 2020–21. Little wonder then, we see hordes of frustrated, despairing, disillusioned, and even violent youth roaming around the streets aimlessly — some resorting to petty crimes, and some being discreetly recruited by anti-state networks. This is not to suggest that all young men and women without a job fall under this category; not at all.
The majority of them work in the informal sector on half the national minimum wage to make both ends meet. This is a dangerous situation and needs to be handled carefully. While continuing the ongoing drive against foreign-sponsored and local militants and terrorists, the hybrid regime must also focus on the socio-economic caveats of this problem. These require economic wisdom and political will to free the economy from elite capture and redistribute resources justly and fairly; easier said than done.
If domestic and foreign investment doesn’t flow into agriculture and manufacturing in a big way, how on earth will new jobs be created?
During the first quarter of this century, Pakistanis have endured a lot — under military rule, under weak and dysfunctional democracies, and under hybrid regimes. It is time for serious soul-searching. This country cannot prosper unless the state delivers for the people and makes them feel respected, enjoying their basic rights as enshrined in the original 1973 Constitution.
Planning Minister Ahsan Iqbal has attributed the rise in unemployment to the International Monetary Fund (IMF) programmes (due to their stabilising nature) and climate disasters. He is partly right. Each government blames the previous one for fiscal and governance issues that produce large deficits. But each, in turn, fails to address these issues sustainably during its tenure.
As a result, foreign and domestic debt stocks keep piling up, requiring ever-increasing allocations from fiscal resources for debt servicing, leaving little for development expenditure after defence expenses. Lower-than-required development spending keeps Pakistan’s economy in survival mode instead of providing the impetus needed for sustained high growth.
The absence of sustained high growth gives birth to stubborn unemployment, worsened by widespread and deep-rooted corruption, which further reduces actual net spending on health, education, skill-building, provision of affordable utilities, roads and transport infrastructure, and innovation.
Moreover, the high population growth rate — above 2pc — makes the task of creating enough jobs even more difficult, as millions of youngsters become employable every year.
Massive job creation is not possible without unleashing the power of the private sector. But due to structural politico-economic issues, such as blurred lines between the private sector and commercial enterprises run by army-backed institutions, state-owned enterprises being in the red for decades, and political and financial over-pampering of some sub-sectors, this is too difficult.
Jobs will keep coming up if the private sector invests more and foreign direct investment flows freely into job-intensive industries. Can the domestic private sector come forward and invest at a time when the political system is fractured? Can foreign direct investment flow freely into Pakistan without eradicating unrest in Balochistan and Khyber Pakhtunkhwa, and without making Karachi — the industrial and commercial hub of the country — a more liveable city?
And if domestic and foreign investment doesn’t flow into agriculture and goods manufacturing in a big way, how on earth will new jobs be created? In the services sector? Can one even think of a thriving services sector without agriculture and industry providing a solid base? These are serious points to ponder. Policymakers cannot wish them away with slogans and fancy presentations.
The speed with which automation, machine learning and generative and agentic artificial intelligence (AI) are spreading in the developed world and devouring human jobs offers new lessons in distributional economics. Policymakers will have to take this into account as well. In the future, creating jobs for humans would be even more challenging due to automation and AI, particularly if top-tier domestic investors go for them at an accelerated pace.
Published in Dawn, The Business and Finance Weekly, December 1st, 2025
