Total employment in South Asia (excluding Afghanistan and Bhutan) rose from 473 million in 2000 to 568 million in 2010, creating an average of just under 800,000 new jobs a month. In all countries except Maldives and Sri Lanka, the largest share of the employed are the low‐end self-employed.
The report says that nearly a third of workers in India and a fifth of workers in Bangladesh and Pakistan are casual laborers. Regular wage and salaried workers represent a fifth or less of total employment.
Analysis of the labor productivity data indicates that growth in TFP (total factor productivity) made a larger relative contribution to the growth of aggregate labor productivity in South Asia during 1980–2008 than did physical and human capital accumulation. In fact, the contribution of TFP growth was higher than in the high‐performing East Asian economies excluding China.
India's labor productivity growth since 1980 has been the highest in South Asia, followed by Sri Lanka and Pakistan. This was particularly the case in India where TFP rose by 2.6% versus 1.4% in Pakistan during this period.
The report argues that South Asia region needs to create a million jobs a month just to keep up with the growth of the workforce. In addition to corruption, conflicts and political instability, the report specifically mentions electricity shortage as a key factor inhibiting job growth in the region. Power sector financial losses across the region are large, resulting from the misalignment of tariffs, the high cost of power procurement, and high transmission and distribution losses. In India the combined cash loss of state-owned distribution companies is more than $20 billion a year, compared with $300 billion of investment needs in 2010–15. The sector deficit in Pakistan is estimated at about $2 billion a year, compared with $32 billion of investment needs in 2010–20.
Increased load shedding in Pakistan alone has cost 400,000 jobs in recent years, according to the World Bank. Although the World Bank report does not address it directly, the anecdotal evidence suggests that almost all of Pakistan's job growth for the decade occurred from 2000-2007 when the economy showed robust gdp growth. During 2000-2007, Pakistan's economy became one of the four fastest growing economies in Asia with its growth rate averaging 7.0 per cent per year for most of this period. As a result of strong economic growth, Pakistan succeeded in reducing poverty by one-half, creating almost 13 million jobs, halving the country's debt burden, raising foreign exchange reserves to a comfortable position and propping the country's exchange rate, restoring investors' confidence and most importantly, taking Pakistan out of the IMF Program. Contrary to its public criticism of the Musharraf-era economy, the preceding facts were acknowledged by the current government in a Memorandum of Economic and Financial Policies (MEFP) for 2008/09-2009/10, while signing agreement with the IMF on November 20, 2008.
It's important for Pakistani government to seriously address the energy and security crises to restore investor confidence and bring back the strong economic growth necessary for creating millions of jobs for its growing youth population entering the workforce. The consequences of inaction on this front would be far more disastrous than the negative effects of the current Taliban insurgency.
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