Pakistan's Demographic Dividend: Record Remittances From Overseas Workers

Pakistan has received nearly $30 billion in worker remittances in fiscal year 2020-21, according to the State Bank of Pakistan. This is a new record representing about 10% of the country's gross domestic product (GDP). This money helps the nation cope with its perennial current account deficits. It also provides a lifeline for millions of Pakistani families who use the money to pay for food, education, healthcare and housing. This results in an increase in stimulus spending that has a multiplier effect in terms of employment in service industries ranging from retail sales to restaurants and entertainment. 

Overseas Pakistani Workers' Remittances. Source: Arif Habib

Pakistan's share of working age population (15-64 years) is growing as the country's birth rate declines, a phenomenon called demographic dividend. This dividend is manifesting itself in high levels of worker exports and record remittances pouring into the country. Saudi Arabia and the United Arab Emirates(UAE) are the top two sources of remittances but the biggest increase (58%) in remittances is seen this year from Pakistanis in the next two sources: the United Kingdom and the United States. 

Pakistani Workers Going Overseas. Source: Bureau of Emigration

 
Over 10 million Pakistanis are currently working/living overseas, according to the Bureau of Emigration. Before the COVID19 pandemic hit in 2020,  more than 600,000 Pakistanis left the country to work overseas in 2019. The average yearly outflow of Pakistani workers to OECD countries (mainly UK and US) and the Middle East has been over half a million in the last decade. 
 
Pakistan ranks 6th among the top worker remittance recipient countries in the world.  India and China rank first and second, followed by Mexico 3rd, the Philippines 4th, Egypt 5th and Pakistan 6th.  
 
Pakistan Demographics
About two million Pakistanis are entering the workforce every year. The share of the working age population in Pakistan is increasing while the birth rate is declining. This phenomenon, known as demographic dividend, is coinciding with declines in working age populations in developed countries. It is creating an opportunity for over half a million Pakistani workers to migrate and work overseas, and send home record remittances. 
Projected Population Decline in Emerging Economies. Source: Nikkei ...

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Comment by Riaz Haq on July 13, 2021 at 1:08pm

Six reasons why remittances soared in South Asia during COVID-19

https://blogs.worldbank.org/endpovertyinsouthasia/six-reasons-why-r...

Tax incentives. Increasingly, policymakers want to encourage greater formal remittances. Pakistan and Bangladesh, which (along with Mexico) saw the highest surge in remittances in a sample of 45 developing countries, had recently introduced new remittance tax incentives. This one-off change may explain the high growth rate in 2020.

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Remittance flows are a major source of income for all countries in South Asia, larger than all other capital inflows combined. In 2019, India received more remittances than any other country in dollar terms, and Nepal ranked third in the world in terms of remittances to GDP at 27 percent. Remittances seem to have been even more essential during the COVID-19 pandemic, increasing by 5.2 percent in 2020 in South Asia. But this was somewhat surprising because household surveys globally showed remittances falling, especially in the second quarter of 2020.

So, what happened in South Asia? Many studies indicate that remittances tend to increase when receiving households experience disasters or recessions. However, since the COVID-19 shock was global in nature, both home (recipient) and foreign (sender) countries were impacted. Migrant workers, many of whom- in North America, the EU, and the Middle East- are employed mostly in contact-intensive services sectors were particularly hard hit by COVID-19.

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Our analysis in the World Bank’s latest South Asia Economic Focus shows that several factors help explain the large increase in remittances in 2020. Some also suggest there are great opportunities for policy interventions.

Savings repatriation. A portion of the recorded rise in remittances could represent repatriated savings of emigrants returning home after losing their jobs or not finding new opportunities. One example: Saudi Arabia granted less than 10,000 work visas per quarter in the first and third quarters of 2020, compared to an average approval rate of over 40,000.
Better capturing of remittance statistics. Remittances could have shifted from informal (unrecorded) to formal (recorded) channels. Part of the increase was just recording of flows unnoticed in the past in official statistics, not an actual increase . Before COVID-related travel restrictions, a significant share of remittances may have arrived through trips home by migrants or their trusted friends with cash in hand, gifts, etc. This was no longer an option during the pandemic.
Generosity. Dire economic conditions in South Asia could have encouraged greater giving by migrants’ close-knit family and community ties. South Asian countries rank high compared to other middle-income countries on a measure of altruism based on FINDEX . Current giving campaigns by diaspora amid the health crisis in India suggest this altruism is alive and well in 2021!
Financial innovation. The shift to more formal channels was facilitated by the accelerated development of Fintech and digital transfer apps such as G-pay and Alipay, which have made the digital transfer of funds more accessible and cheaper per transaction, leading to an overall increase in remittances.
Tax incentives. Increasingly, policymakers want to encourage greater formal remittances. Pakistan and Bangladesh, which (along with Mexico) saw the highest surge in remittances in a sample of 45 developing countries, had recently introduced new remittance tax incentives. This one-off change may explain the high growth rate in 2020.
Host country transfers. Some migrants were able to access cash transfers offered by host country governments, which would allow then to send home higher amounts than normal (e.g., stimulus payments in the United States).

Comment by Riaz Haq on July 13, 2021 at 1:20pm

India received over USD83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite a pandemic that devastated the world economy, according to a World Bank report.

https://indianexpress.com/article/business/economy/india-received-8...

China, which received USD 59.5 billion in remittances in 2020 against USD 68.3 billion the previous year, is a distant second in terms of global remittances for the year gone by, as per the latest World Bank data released on Wednesday.

In 2019, India had received USD83.3 billion in remittances.

The report said India’s remittances fell by just 0.2 per cent in 2020, with much of the decline due to a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.


In 2019, India had received USD83.3 billion in remittances.
India received over USD83 billion in remittances in 2020, a drop of just 0.2 per cent from the previous year, despite a pandemic that devastated the world economy, according to a World Bank report.

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China, which received USD 59.5 billion in remittances in 2020 against USD 68.3 billion the previous year, is a distant second in terms of global remittances for the year gone by, as per the latest World Bank data released on Wednesday.

In 2019, India had received USD83.3 billion in remittances.

The report said India’s remittances fell by just 0.2 per cent in 2020, with much of the decline due to a 17 per cent drop in remittances from the United Arab Emirates, which offset resilient flows from the United States and other host countries.


India and China are followed by Mexico (USD42.8 billion), the Philippines (USD34.9 billion), Egypt (USD29.6 billion), Pakistan (USD26 billion), France (USD24.4 billion) and Bangladesh (USD21 billion), it showed.

In neighbouring Pakistan, remittances rose by about 17 per cent, with the biggest growth coming from Saudi Arabia, followed by the European Union countries and the United Arab Emirates.

In Bangladesh, remittances also showed a brisk uptick in 2020 (18.4 per cent), and Sri Lanka witnessed remittance growth of 5.8 per cent.

In contrast, remittances to Nepal fell by about two per cent, reflecting a 17 per cent decline in the first quarter of 2020.

The World Bank, in its latest Migration and Development Brief, said despite COVID-19, remittance flows remained resilient in 2020, registering a smaller decline than previously projected.

Officially recorded remittance flows to low- and middle-income countries reached USD540 billion in 2020, just 1.6 per cent below the 2019 total of USD548 billion.

“As COVID-19 still devastates families around the world, remittances continue to provide a critical lifeline for the poor and vulnerable,” said Michal Rutkowski, Global Director of the Social Protection and Jobs Global Practice at the World Bank.

“Supportive policy responses, together with national social protection systems, should continue to be inclusive of all communities, including migrants,” Rutkowski added.

Comment by Riaz Haq on July 13, 2021 at 7:31pm

The annual trade deficit reached $30.796bn in July-June FY21 from $23.180bn over the corresponding period of last year. This may pose some challenges for the government in controlling external accounts.

https://www.dawn.com/news/1632649/trade-deficit-swells-to-308bn-in-...

In rupee terms, the trade deficit was posted at 33.8pc on a year-on-year basis.

The monthly deficit reached $3.333bn in June 2021 from $2.120bn a year ago, reflecting an increase of 57.2pc. In rupee terms, the trade deficit was posted at 50.5pc on a year-on-year basis. In FY20, the country’s trade deficit had narrowed to $23.099bn from $31.820bn in the previous year.


Trade gap has been widening since December 2020, mainly led by exponential growth in imports and comparatively slow growth in exports. The annual import bill went up by 25.8pc, or $11.517bn, to $56.091bn in FY21 from $44.574bn over the corresponding months of last year. In June 2021, the import bill reached an all-time high of $6.052bn against $3.719bn over the last year month, indicating growth of 62.7pc. On a month-on-month basis, the import bill increased by 14pc.

Adviser on Commerce Razak Dawood told a news conference on Thursday that the import bill increased mainly due to wheat and sugar imports. He said the import value of wheat and sugar stood at $1.2bn in outgoing fiscal year.

Commerce adviser says annual goods export of $25.3bn is highest in country’s history

Similarly, he said the import value for cotton stood at $1.2bn due to shortage in domestic production while machinery imports stood at over $8bn — an indication of expansion in industrial base.

The import bill is also rising mainly due to the increased imports of petroleum, soybean, machinery, raw material and chemicals, mobile phones, fertilisers, tyres and antibiotics and vaccines. The growth in remittances at the moment will be sufficient to finance the import bill.

Exports posted a growth year-on-year 18.2pc or $3.9bn to $25.294bn in FY21 from $21.394bn over the last year. In June, export proceeds reached $2.718bn from $1.599bn over the corresponding month of last year, indicating a growth of 70pc

On a month-on-month basis, exports surged by 62.65pc.

The commerce adviser said the value of annul export proceeds is the highest-ever in the history of Pakistan. The exports in June 2021 were also the highest for any month, he further claimed.

The export of services for FY21 is projected to be $5.9bn while the cumulative exports of goods and services during FY21 will cross $31bn.

“This is a remarkable achievement by our exporters considering the difficulties created by the Covid-19 pandemic at home and resultant contractions in our major markets,” Mr Dawood said.

“It was not an easy task as many countries went into lockdown which severely affected the business,” he said. “Not only did our exports survive the crisis but also we have enhanced it in many sectors. I salute our exporters on achieving the milestone,” the adviser added.

Talking about sectoral performance, he said textile exports increased 18.85pc, pharmaceutical 27pc and copper and copper derivatives 44pc, respectively. Meanwhile, he said, rice exports declined 8pc, cotton yarn 2pc, raw leather 16pc and plastic 6pc, respectively.

“With the current measures, exports are expected to grow by 5pc in next two years,” he added.

When asked about the stagnated exports at $25bn for last one decade, the adviser replied that it will take time to boost exports. He started giving reasons of decline in exports since 2013. “We have reversed the trend,” Mr Dawood claimed.

On the issue of non-implementation of The Strategic Trade Policy Framework and Textile Policy, Commerce Secretary Sualeh Faroqui said both policies were under the consultation process with the ECC.

Comment by Riaz Haq on July 14, 2021 at 10:07am

Highest Levels in Country's Economic History in FY21...

1) Goods Exports =$25.26 bln
2) IT Exports=$2 bln
3) Remittances = $29.37 bln
4) Forex Reserves = $25.41 bln
5)Wheat Production=28.75mln tons
6)C/A Surplus =$153mln (11M)

https://twitter.com/Aadil_Jillani/status/1415257701509120000?s=20

Comment by Riaz Haq on July 19, 2021 at 8:50pm

In #Asia, rising #demand for fuel #oil from #Pakistan in August and September has seen higher premiums for spot HSFO cargoes loading over late-July 2021, which are typically used for blending. #energy #economy https://www.spglobal.com/platts/en/market-insights/latest-news/ship...


ICE Brent futures September contract were trading at $72.55/b at 0145 GMT July 19, down from the $73.61/b level at 0830 GMT July 16, Intercontinental Exchange data showed.

In Asia, rising demand for fuel oil from Pakistan in August and September has seen higher premiums for spot HSFO cargoes loading over late-July, which are typically used for blending.

Singapore fuel oil traders estimate the August low sulfur fuel oil arbitrage flow of cargo from the West into the Straits at lower than July's levels of about 2.2 million mt.

** The premium for supply of Singapore ex-wharf marine fuel 0.5%S bunker on a term contract basis for August dates was heard offered at $3.50-$4.50/mt on the last trading day of the week ended July 16.

** Industry sources said that balance July dates are currently being inked at a premium of $3-$3.50/mt over Singapore Marine Fuel 0.5%S cargo assessments, compared with a premium of $1.50-$2.00/mt for offers made in June for July supply.

** In North Asia, suppliers in Zhoushan continue to compete with each other amid high inventories, market sources based there said. Low sulfur fuel oil production in China remains steady, contributing to ample supply, the sources added.

** China has eased the prevention measures for ships coming from India, but some regulations are still there in Zhoushan, capping bunker demand, industry sources said. Reflecting the weaker demand, the delivered Zhoushan 0.5%S marine fuel bunker price has fallen below the Singapore price since July 14.

** Meanwhile, Hong Kong has been seeing strong demand since the 14-day mandatory quarantine rule for crew members under COVID-19 restrictions was lifted a month ago, while supply for 0.5%S sulfur grade is likely to remain sufficient.

** The port is yet to see a full recovery in bunker demand after the 14-day mandatory quarantine was lifted, Hong Kong bunker industry sources said, attributing the slow recovery to lower bunker prices in mainland Chinese ports and shipowners' reluctance for bunker-only calls in Hong Kong amid high freight rates.

High Sulfur Fuel Oil
** According to ICE data, morning discussions for the August Singapore 380 CST/Rotterdam high sulfur fuel oil spread inched lower to $12/mt July 19, from the July 16 spread at $12.10/mt.

** After Pakistan LNG Ltd. cancelled procurement tenders for spot LNG, Pakistan State Oil has since issued seven new buy tenders for fuel oil to meet utilities demand, the first of which closes at the end of the week of July 26.

** The rise in demand for high sulfur fuel oil saw the cash differential to the FOB Singapore 180 CST HSFO assessment rise to a five-month high on July 15 at $3/mt, before falling to $1.44/mt July 16, S&P Global Platts data showed.

** Demand to meet the specifications of the cargoes sought by PSO has also seen higher prices paid for spot high sulfur fuel oil cargoes sold by India's BPCL and HPCL, market traders said.

** In North Asia, the 380 CST high sulfur bunker supply in Hong Kong is expected to remain tight for the rest of July when replacement cargo is scheduled to arrive, said a bunker supplier based there.

** Bunker suppliers hold 380 CST bunker grade only to meet demand and supply has been thin after the IMO 2020, market sources said.

** Hong Kong's 380 CST price was the highest in Asia over June 24-July 6, and has been the second highest since July 7 after Japan, reflecting the tightness, Platts data showed.

Comment by Riaz Haq on July 20, 2021 at 6:23pm

#Pakistan Commerce Chief says country aims to unlock #manufacturing & export potential. #Export-led growth & Make in Pakistan are our priorities. Exports reached a record $31.3b (goods $25.3b) & (services $6b) in fiscal 2020-21 despite #pandemic challenges https://gn24.ae/c047920aa036000

PAKISTAN EYES MASSIVE PARTICIPATION IN EXPO 2020 DUBAI
* The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery.
* To bolster exports, the government has removed three barriers: Shift from fixed parity that artificially overvalued rupee, giving refunds to exporters and industrialists on time and exemptions on customs duties mainly on raw materials.
* The Ministry of Commerce has set its eyes on the export target of $35 billion in the next fiscal year.
As the country plans to move beyond simple manufacturing, the five key areas of focus will be: pharmaceutical, engineering, food processing, fisheries, fruits and vegetables.
* To identify new markets and boost trade ties and investments, Pakistan is eyeing massive participation at Expo 2020 Dubai.
“Make in Pakistan is our top priority now” Dawood asserted. Pakistan’s policy in the past has been to support trading rather than manufacturing which is now changing under Khan’s administration. “Manufacturing is wealth creation. It helps build industries, create more jobs” which Pakistan, a country of 220 million people, desperately needs. The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery. Industrial support packages, incentives such as gas and electricity at regionally competitive rates for export-oriented businesses, tax exemptions for high-performing sector manufacturers helped achieve this growth.

Comment by Riaz Haq on July 29, 2021 at 9:20am

#Malala says girls' #education 'worth fighting for'. The #GlobalEducationSummit wants to raise $5bn (£3.6bn) to support education in some of the world's poorest countries. #UK is promising £430m, #EU £595m, #US £218m, #Norway £300m & #Canada £173m https://www.bbc.com/news/education-58006728


"The world is facing a girls' education crisis," with more than 130 million girls missing out on school around the world, Malala Yousafzai has warned.

"Their futures are worth fighting for," the education campaigner told a global education summit in London.

She said the recovery from the pandemic had to mean fair access to education.

The Global Partnership for Education summit wants to raise $5bn (£3.6bn) to support education in some of the world's poorest countries.

Hosted by the UK and Kenya, it will raise funds for the next five years, creating an extra 88 million school places and supporting the learning of 175 million children.

'Biggest game-changer'
The pandemic has exacerbated the problems already facing schools in poorer countries - with warnings that children who were forced out of school because of coronavirus might never return.

School aid for Syrian children who know warplanes and not shops
PM pledges £430m for girls' education at G7
Government wins vote to cut overseas aid
The UK has promised £430m and other donor countries will be making pledges - with about $4bn (£2.9bn) of the total expected to be promised by Thursday.

The European Union promised £595m, Norway £300m, Canada £173m and the United States £218m over three years.

Julia Gillard, former Australian prime minister and chair of the Global Partnership for Education, which distributes funding from donor countries, was confident that the full $5bn would be raised, but different national budget cycles would mean it would arrive in stages.

She said the pandemic had disrupted education in all countries - but the impact of closing schools had been much worse in poorer countries where many families lacked access at home to internet connections or electricity.

Malala, a Nobel prize winner from Pakistan who has campaigned for female education, told the summit of the importance of investing in education, particularly for girls who don't have opportunities "just because of their gender".

"Too many children around the world - girls in particular - were already out of school before the pandemic," said UK Prime Minister Boris Johnson.

"Enabling them to learn and reach their full potential is the single greatest thing we can do to recover from this crisis," he said, urging the international community to contribute funding.

However, Mr Johnson has faced criticism, including from some of his own MPs, for pushing ahead with a cut in the UK's overseas aid budget.

Gabriela Bucher, executive director of Oxfam, questioned the priorities of a world in which billionaires could compete in launching private space rockets while millions of children are unable to go to school.

She also warned of the negative impact from the UK "dramatically cutting aid".

"It will especially leave girls less healthy and less safe, before they even set foot in the classroom," said the aid charity head.

Opening the event, UK Foreign Secretary Dominic Raab emphasised the value of investing in girls' education as the "engine of progress" - with better-educated mothers improving the health and wellbeing of their families.

Education for girls is the "biggest game-changer", he told the summit.

Kenya's cabinet secretary for foreign affairs Raychel Omamo warned of the disruption caused by the pandemic - but said "education is the pathway, the way forward".

Comment by Riaz Haq on August 10, 2021 at 7:22am

Workers' #remittances from #Pakistani diaspora amount to $2.71 billion in July 2021, down 2.1% from July 2020. State Bank of #Pakistan points out that the figure has remained over $2 billion for the 14th straight month in a row. #economy https://www.brecorder.com/news/40112428

Overseas workers' remittances amounted to $2.71 billion in July 2021, a 2.1% fall year-on-year, with the country's central bank pointing out that the figure has remained over $2 billion for the 14th straight month.

Data released by the State Bank of Pakistan (SBP) on Tuesday said that inflows of $2.71 billion were recorded in July 2021. This is the second-highest ever level of remittances reported in the month of July, it added.

In terms of growth, remittances increased 0.7% over the previous month ($2.68 billion in June 2021), and showed a decline by 2.1% over the same month last year ($2.76 billion in July 2020). This marginal year on year decline was largely on account of Eid-ul-Azha, which resulted in fewer working days this July compared to last year, said the SBP.

Remittance inflows during July 2021 were mainly sourced from Saudi Arabia ($641 million), United Arab Emirates ($531 million), United Kingdom ($393 million) and the United States ($312 million).

The central bank was of the view that proactive policy measures by the government and SBP to incentivise the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions have positively contributed towards the sustained improvement in remittance inflows since last year.

Pakistan's remittances reach historic high of $29.4 billion in FY21

Remittances play an important part in Pakistan's economy that continues to battle widening trade and current account deficits. The country's trade deficit widened by 85.53% to $3.104 billion in July 2021 as compared to $1.673 billion in the corresponding month of 2020, said the Pakistan Bureau of Statistics (PBS).

According to trade data, the import bill in July this year went up 47.90% to $5.434 billion against $3.674 billion over the corresponding month last year. Meanwhile, the country’s exports witnessed an increase of 16.44% and remained $2.33 billion in July 2021 compared to $2.001 billion in July 2020.


The SBP's Third Quarterly Report on The State of Pakistan’s Economy for the fiscal year 2020-21, expected workers' remittances to remain buoyant, as the main factors (switch to formal channels, incentives for banks and MTOs, etc.) will still be in place.

Comment by Riaz Haq on September 25, 2021 at 11:47am

The New Population Bomb

https://asia.nikkei.com/Spotlight/The-Big-Story/The-new-population-...

"A few years ago, we would get three times more recruits than we could accept," observed an employee with a staffing company in Vietnam that recruits workers for Japan's Technical Intern Training Program. "These days, we can barely get twice as many. Within five years, the number of people working away from home may start to drop."

Many Asian economies have experienced this phenomenon already, known in economics as the Lewis turning point, after British economist W. Arthur Lewis. Workers migrate from rural areas to cities, supporting economic growth by working for low wages. Eventually, growth stops because of rising wages and a shrinking labor force.

The answer, in many cases has been immigrants, which have contributed to growth in developed countries after population growth slowed. According to the U.N., there were 281 million international migrants in 2020, 1.6 times more than roughly 20 years earlier.

Border restrictions imposed during the COVID-19 pandemic have highlighted how dependent some countries have become on foreign workers.



Without immigration, many advanced economies already cannot sustain their labor pool. In the U.K. after Brexit, the combination of immigration restrictions and the pandemic has led to a severe labor shortage. Before the pandemic, 12% of heavy truck drivers were from the European Union. However, drivers can no longer be hired from outside the country under the U.K.'s new standards. According to the British Road Haulage Association, the country faces a shortage of more than 100,000 commercial heavy truck drivers. Logistics companies are becoming desperate, raising hourly wages by 30%.

The lack of immigration may not be a temporary phenomenon. The countries with the most outbound immigrants are seeing their young populations decline. The number of Indians between the ages of 15 and 29 will peak in 2025. In China that cohort will drop by about 20% in the next 30 years.

The Philippines, one of the biggest labor-exporting countries in the world, where about 10% of the population is thought to work abroad, is also showing signs of reversing course to focus on domestic production. The country is increasing the amount of domestic contract work, such as call centers. The incoming amount of overseas remittances grew by over 7% year-on-year in the first half of the 2010s, but that slowed to 3% in 2018.

Some countries have already started trying to secure workers. Germany increased its acceptance of non-EU workers in 2020. In 2019, Australia increased the maximum length of working holidays from two years to three, on the condition that people work for a set period of time in sectors where there is a labor shortage, such as agriculture. Japan also is bringing in more foreign workers through the "specified skilled worker" system.

Economic forces may drive a new competition among nations for immigrants. One key is to become a "country of choice." "A policy of actively accepting immigrants means it is important to expand the options for foreign workers to settle and live in a country permanently," said Keizo Yamawaki, a professor at Meiji University in Tokyo who specializes in immigration policy.

Comment by Riaz Haq on October 20, 2021 at 11:23am

Javed Hassan
@javedhassan
“We design courses in collaboration with industry and play a very important role in terms of international linkages and accreditation in the skills area. Traditionally, these skills would include plumbing, electrical, welding, carpentry, etc; today they encompass high-tech areas”

“such as AI, coding and web design. To summarise, NAVTTC designs policy for the government, allocates resources and ensures that the standards meet the local market requirements and are internationally accepted as well.”

https://twitter.com/javedhassan/status/1450857983966130179?s=20

-------------------------------

https://aurora.dawn.com/news/1144225


MAB: How receptive is the industry to this idea?
SJH: People in the industry always maintain that training is the critical need of the country and we should be investing much more in that direction. The reality is that they look to the government to provide all the training and the facilities; they don’t want to invest time and energy in a more involved collaboration. We have tried to work with the Chambers of Commerce, but so far, we have not seen the kind of enthusiasm that is needed. However, things are changing. For example, we are working closely with the Hashoo Group to train young people in the hospitality sector. We are also working with a few manufacturing companies that are providing training on the factory floor. Pakistan’s main problem is productivity and productivity is dependent on the capability of the labour force; unless industry is prepared to invest in them, it will not have a capable labour force.

MAB: From which educational stream do most trainees come from?
SJH: When we were just offering traditional skills, we were attracting young people from the Matric or FSC level from government schools; young people who probably were unable to get into a university. As a result, there was a stigma attached to vocational training, an unfair one in my view – and people preferred not to opt for vocational training, even though there are good jobs out there and with good earning potential. Under Hunarmand Pakistan’s Kamyab Jawan Scheme, we have introduced high-end technical skills that offer entrepreneurial or digital facing opportunities, and since then we have seen a very different kind of student body coming in. Many are graduates who have not found jobs because they lack industry experience (it makes you wonder what kind of graduates we are producing that the industry is unwilling to hire them) and have taken advantage of the courses we offer and almost immediately found jobs. In the first phase, we trained about 40% of our intake in traditional skills, and according to an internal survey, almost 65% found a job. In terms of the high-end technical skills, about 80 to 85% have either started their own companies, are freelancing or are in jobs. We are now seeing young people from different social stratas taking up the trainings we offer. We cannot know everything about the market and one of the best proxies to understand the market requirements is to find out what the young themselves want to learn; they better than anyone else know what kind of jobs are out there and we have persuaded the institutes to talk to industry as well as to the young people and design the courses accordingly. As a result, applications have been much higher compared to the previous ones, when NAVTTC as well as the vocational institutes had to run after people to persuade them to enrol; in fact, this time, the courses have been oversubscribed. We should not underestimate the wisdom of young people. Most of them want to find jobs and stand on their own feet; do not force them on to a certain path; instead, ask them what path they want to follow and enable it.

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