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ANALYSIS ON CAAUSES OF

UNEMPLOYMENT IN PAKISTANAnalysis on Causes of Unemployment in Pakistan

7/26/2011

IQRA UNIVERSITY (GULSHAN)

DEFENDERS

Muhammad Nabeel Shahzad Siddiqui (3851)

Haseeb Ali Khan (3847)

Nida Iqbal (3782)


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ANALYSIS ON CAUSES OF UNEMPLOYMENT IN PAKISTAN

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IQRA University

Masters in Business Administration

Certificate

This is to certify that Muhammad Nabeel Shahzad Siddiqui, Haseeb Ali Khan and

Nida Iqbal, have submitted their analysis report on the Analysis on Causes of

Unemployment in Pakistan to the Department of Business Administration.

__________________________________________

Dr. Abdul Waheed

Faculty of Business Administration


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ACKNOWLEDGMENT

Firstly, we would like to thank the AL- MIGHTY ALLAH, who gave us the strength and ability

to complete this term report. We would also like to express our gratitude to all those who gave us

the possibility to complete this analysis report by providing us the information about the

policies, strategies, product, pricing, distribution, promotion & packaging etc which helped us in

formulating this report and guided us through out. We want to thank our teacher which gave us

the opportunity to commence this analysis report in the first instance, to do the necessary

research work and to use locals data. We are bound to thank the honorable Dr. Abdul Waheed

whose guidance were always with us whenever we need it. We are deeply indebted to companys

employees and our former colleagues of MBA for their stimulating suggestions and

encouragement helped us in all the time of research and for writing of this analysis report. We

want to thank all of them for all their help, support, interest and valuable hint. However, we

accept full responsibility for any deficiencies in the report.


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INDEX

TOPICS PAGE #

INTRODUCTION-----------------------------------------------------------------------------------8

ANALYSIS-------------------------------------------------------------------------------------------8

STATISTICAL OVERVIEW----------------------------------------------------------------------8

GRAPHS OF UNEMPLOYMENT---------------------------------------------------------------11

REASONS FOR UNEMPLOYMENT-----------------------------------------------------------13

CONSEQUENCES OF UNEMPLOYMENT---------------------------------------------------16

EFFECT OF CORRUPTION (DIAGRAM) -----------------------------------------------------17

RECOMMENDATION---------------------------------------------------------------------------18

CONCLUSION-------------------------------------------------------------------------------------20

REFRENCES----------------------------------------------------------------------------------------21


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By Table Interpretation:

Year Total labor

force

Unemployed

labor force

Unemploym

ent rate

Rank %

Change

Date of

informatio

2003 40,400,000 3,151,200 7.80 % 119 2002

2004 43,980,000 3,386,460 7.70 122 -1.28 2003

2005 45,430,000 3,770,690 8.30 75 7.79 2004

2006 46,840,000 3,091,440 6.60 65 -20.48 2005

2007 48,290,000 3,138,850 6.50 72 -1.52 2006

2008 48,230,000 2,700,880 5.60 71 -13.85 2007

2009 50,580,000 3,742,920 7.40 92 32.14 2008

2010 53,780,000 7,529,200 14 143 89.19 2009

2011 55,770,000 83,655,00 15 149 7.14 2010


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By Graphical Interpretation:

From above chart we may conclude that unemployment was controlled to some extend from

2003 to 2009.There after, unemployment has doubled and reached at around 15% in 2011.This

means that total labor force is 55,770,000 and out of which 83, 655, 00 are unemployed in 2011.

Almost 15% of the labor force has lost their jobs and are seriously depressed and this may

increase in coming years if economic policies are not changed. We will discuss some of the

reasons of high unemployment in Pakistan there will be high depression among the youth and

suicide rate may also increase because they have had spent a lot on their education.

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

2003 2004 2005 2006 2007 2008 2009 2010 2011

Year

Rate Of Unemployment


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Unadjusted unemployment rate by month:

Unadjusted Unemployment Rate By Month:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

1980 6.9 6.8 6.6 6.7 7.1 7.8 7.9 7.6 7.2 7.1 7.1 6.9 7.1

1981 8.2 8.0 7.7 7.0 7.1 7.7 7.3 7.2 7.3 7.5 7.9 8.3 7.6

1982 9.4 9.6 9.5 9.2 9.1 9.8 9.8 9.6 9.7 9.9 10.4 10.5 9.7

1983 11.4 11.3 10.8 10.0 9.8 10.2 9.4 9.2 8.8 8.4 8.1 8.0 9.6

1984 8.8 8.4 8.1 7.6 7.2 7.4 7.5 7.3 7.1 7.0 6.9 7.0 7.5

1985 8.0 7.8 7.5 7.1 7.0 7.5 7.4 6.9 6.9 6.8 6.7 6.7 7.2

1986 7.3 7.8 7.5 7.0 7.0 7.3 7.0 6.7 6.8 6.6 6.6 6.3 7.0

1987 7.3 7.2 6.9 6.2 6.1 6.3 6.1 5.8 5.7 5.7 5.6 5.4 6.2

1988 6.3 6.2 5.9 5.3 5.4 5.5 5.5 5.4 5.2 5.0 5.2 5.0 5.5

1989 6.0 5.6 5.2 5.1 5.0 5.5 5.3 5.1 5.1 5.0 5.2 5.1 5.3

1990 6.0 5.9 5.5 5.3 5.2 5.4 5.6 5.5 5.6 5.5 5.9 6.0 5.6


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Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Annual

1991 7.1 7.3 7.2 6.5 6.7 7.0 6.8 6.6 6.5 6.5 6.7 6.9 6.8

1992 8.1 8.2 7.8 7.2 7.3 8.0 7.7 7.4 7.3 6.9 7.1 7.1 7.5

1993 8.0 7.8 7.4 6.9 6.8 7.2 7.0 6.6 6.4 6.4 6.2 6.1 6.9

1994 7.3 7.1 6.8 6.2 5.9 6.2 6.2 5.9 5.6 5.4 5.3 5.1 6.1

1995 6.2 5.9 5.7 5.6 5.5 5.8 5.9 5.6 5.4 5.2 5.3 5.2 5.6

1996 6.3 6.0 5.8 5.4 5.4 5.5 5.6 5.1 5.0 4.9 5.0 5.0 5.4

1997 5.9 5.7 5.5 4.8 4.7 5.2 5.0 4.8 4.7 4.4 4.3 4.4 4.9

1998 5.2 5.0 5.0 4.1 4.2 4.7 4.7 4.5 4.4 4.2 4.1 4.0 4.5

1999 4.8 4.7 4.4 4.1 4.0 4.5 4.5 4.2 4.1 3.8 3.8 3.7 4.2

2000 4.5 4.4 4.3 3.7 3.8 4.1 4.2 4.1 3.8 3.6 3.7 3.7 4.0

2001 4.7 4.6 4.5 4.2 4.1 4.7 4.7 4.9 4.7 5.0 5.3 5.4 4.7

2002 6.3 6.1 6.1 5.7 5.5 6.0 5.9 5.7 5.4 5.3 5.6 5.7 5.8

2003 6.5 6.4 6.2 5.8 5.8 6.5 6.3 6.0 5.8 5.6 5.6 5.4 6.0

2004 6.3 6.0 6.0 5.4 5.3 5.8 5.7 5.4 5.1 5.1 5.2 5.1 5.5

2005 5.7 5.8 5.4 4.9 4.9 5.2 5.2 4.9 4.8 4.6 4.8 4.6 5.1

2006 5.1 5.1 4.8 4.5 4.4 4.8 5.0 4.6 4.4 4.1 4.3 4.3 4.6

2007 5.0 4.9 4.5 4.3 4.3 4.7 4.9 4.6 4.5 4.4 4.5 4.8 4.6

2008 5.4 5.2 5.2 4.8 5.2 5.7 6.0 6.1 6.0 6.1 6.5 7.1 5.8

2009 8.5 8.9 9.0 8.6 9.1 9.7 9.7 9.6 9.5 9.5 9.4 9.7 9.3

2010 10.6 10.4 10.2 9.5 9.3 9.6 9.7 9.5 9.2 9.0 9.3 9.1 9.6

2011 9.8


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REASONS FOR UNEMPLOYMENT:

Economy of an individual is at the utmost priority of every democratic as well as welfare state. Since the

dawn of human history, individual needs have been prioritized by every human being. These individual

needs can be met by proper sources of employment. After the transformation of the world from a feudal

to an industrial society, the needs of an individual have risen sharply, giving due importance to finance. In

Pakistan, due to gigantic rise in population, individual finances have been disturbed a lot. This is because

of rising unemployment. The major causes of unemployment in Pakistan are following.

BACKWARDNESS IN AGRICULTURE SECTOR:

The biggest reason of unemployment in Pakistan is concerned with the backwardness of agriculture

sector. Agriculture is the biggest sector of our economy that contributes 20.9% to GDP and 44% people

get jobs from this sector directly or indirectly. Unemployment in this sector is from two sides.

Firstly it is due to not adopting latest technology and capital intensive technology. Due to this demand for

labor has been decreased. Second is the backwardness of this sector. There is less availability of

fertilizers, pesticides, quality of seeds, absence of land reforms and lack of agriculture education.

BACKWARDNESS IN INDUSTRIAL SECTOR:

The Industrial sector is the second largest sector of our economy and contributes 195 to National Income.

This sector should employ a large number of labors. But due to backwardness it is employing a small

number of people. Due to electricity breakdown already established industry is deteriorating in theprevailing unemployment ratio.

HIGH COST AND LOW QUALITY:

High cost and low quality are responsible for less demand for our agricultural and industrial items.

Because of less demand of such kinds of goods both to domestic and international procedures are losing

their interest in production. Thats why people are becoming unemployed.

MAJORITY OF PEOPLE ARE POOR:

Millions of people in Pakistan are poor. Due to poverty people are overburdened with expenditures and

their saving are very low. It is said that for the reasonable growth of economy saving rate be at least 25%

in any country, but in Pakistan it is only 13 to 14% which is very low. Low investment level is due to less

saving, ultimately there is unemployment.


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MAJORITY OF BUSINESSMAN ARE LESS EDUCATED:

In Pakistan majority of the businessmen are less educated. They do not know how to run their businesseffectively and efficiently. So they become bankrupt. This factor generates unemployment on a massive

level.

LOADSHEDDING OF ELECTRICITY:

Load shedding of electricity is the disturbing economy, especially the industrial sector. Due to less

availability and high rates of basic inputs like electricity, gas and oil etc, many industries have been

closed.

TAX SYSTEM IS NOT SATISFACTORY:

In Pakistan, tax system is not satisfactory. Ratio than indirect taxes. Tax evasion is common. Due to less

income from the taxes, government cannot start developmental projects. If there is no investment, then

from where public would find jobs. On the other side if government takes step to increase indirect taxes, it

would also affect investment and ultimately employment level.

CURRENT INTERNATIONAL FINANCIAL CRISIS:

Current international financial crisis is one of the biggest reasons of unemployment in Pakistan and in the

whole world. This crisis originated from the banking sector of USA, UK and some European countries

and in now global phenomena.

INCREASE IN POPULATION GROWTH :

Pakistans population growth rate is 1.8% which is the highest in the region. Our resources are limited.

Different sectors of economy are unable to provide jobs to the growing population. So there is

unemployment.


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EFFECT OF FISCAL & MONETORY POLICY:

Fiscal and monetary policies are also responsible for unemployment. In views of fiscal policy, Pakistan

has fewer funds to invest in job providing projects. Every annual budget shows deficit. Through the

monetary policy if the government increases the rate of interest, it discourages the investors from getting

loans.

POLITICAL INSTABILITY AND BAD LAW & ORDER SITUATION:

Political instability, bad law and order situation, target killings, bomb blasts, terrorism, inconsistent

economic policies etc are the factors which are disturbing domestic and foreign investment. Pakistan

investors are taking away their money to Dubai and other countries of the world.

NOT UTILIZING LOAN EFFECTIVELY & EFFICIENTLY:

Since 1947, Pakistani rulers got loans from IMF, World Bank and many other sources. Such loans were

not utilized honestly. Current external debt of Pakistan is more than 50 billion dollar. Government has to

allocate a big amount for the repayment of loans with interest. So due to fewer resources for development

projects there is unemployment.


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CONSEQUENCES OF UNEMPLOYMENT:

NEGATIVE ASPECTS:

INDIVIDUAL EFFECTS

The individual cost for the unemployed

Loss of income

Fall in real living standard

Loss of self esteem

Increase health risk

Stress:

a) Reduction of quality of diet.

b) Social exclusion because of loss of work and income.

De motivation

SOCIAL EFFECTS

Low moral values

Security threat

Increase crimes Vandalism (looting)

Increase involvement of foreign elements (MOSAD, CIA, RAW etc)

ECONOMICAL EFFECTS

Fall in sales

Fall in profit

Fall in revenue

Decrease economic growth

POSITIVE ASPECTS

Bulk of employees always available

Fewer turnovers


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EFFECTS OF CORRUPTIONS IF GOES DOWN BY PROPER POLICIES

CORRUPTIONGOVT,REVENUE GOVT.EXPENDITURE

EMBOLISH TAXLOW TARRIFSSUBSIDIES

WELFARE OF NATION

PUBLIC/PRIVTE PARTNESHIP

GOVT.INSTITUTIONS

SELF EMPLOYMENT SCHEM

INFLATIONSKILLED LABOUR

LITERACY RATE

DUE TOLOW COST

PRODUCTS

EXPORT TECHNOLOGY USEAGE

G.R G.E PRODUCTIVITY


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RECOMMENDATIONS:

Government should need to appoint good, honest and fair ombudsman an on every organizationto control the corruption.

Every organization must have accountability office which contains good, honest people toprevent and find the corruption of their organization.

Law and order situation also main reason in investment because of bad law & order bhatta mafia,land mafia etc demoralized to the investor not foreign investor but also local investor areunsecure for further investment in our country.

Government should need to developed amalgamation like public/private partnership in agriculture

sector & industrial sector as well.

Government identifies that sector which needs support. Because there is lot of sector which needlittle bit of support to become industry

Government should take measure to attract industrialist and decidedly adopt investment throughideal tax rate

Government advertises various bails for development of agronomic sector.

The most important of these causes is a nonstop increasing population (the higher growth rate ofpopulation) is the major cause of unemployment in Pakistan. The resources of the country are

limited because population has exceeded the optimum level.

To improve our educational system because our educational system is pathetic.

Technical training facilities should be provided. In this way unemployed people will get a chanceto enhance their skills and become able to earn more reason able income in more productive way.

More technical and technical training accessories should be provided. In this way unemployed

humans will get the advantage to enhance their abilities and become able to acquire reasonable

income.

Government should try to boost exports through embellish tax base and lowering tariffs There is no career counseling that why we are not utilizing our young fresh graduates also

government is not keen to provide jobs to young graduates.

Also the government should provide loans on low interests or interest free loan to theunemployed people so that they can start their business


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CONCLUSION:

After analyzing the above date we come to on our conclusion that if we proper utilize our revenue and

make proper economic planning, consistent policies of government, better law and order situation,

abolishing energy crisis, improving literacy & investing in skill development, long term economic

growth, so we can easily tackle all the problems and issues that we are facing today. The whole nation of

the country is in trouble and everybody is in scarcity that what we will do in future. Especially if we talk

about the new comers graduate so they are very anxious about their life that what will be the future. These

all types of situation lead to level of the unsatisfactory in the human life.

Yes this is very challenging situation for us to tackle all the above issues but we have to take some

corrective action otherwise it will lead to a very worst situation and may be by the problem of

unemployment our young generation specially students will turn their life into crimininal activities andthe ratio of crime rate will become high. If this situation will happen so it will be very difficult for us totake out our young generation from the criminal activities.


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REFRENCES:

http://www.theodora.com/wfbcurrent/pakistan/pakistan_economy.html http://jobs.aol.com/articles/2011/03/02/are-unemployment-rates-really-going-down/

www.google.com.pk

www.wikipedia.com

http://www.hamariweb.com/articles/article.aspx?id=4817

Pakistan Economic Survey

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