economic final assignment

8/12/2019 economic final assignment

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MACROECONOMICS Page 1

Assignment of Economics

Topic: Unemployment of Pakistan


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Table of Content:

Acknowledgement ..

Executive summary . 03

Definition . 04

Explanation .. 04

Unemployment rate . .04

Pakistan unemployment rate . 05

Canada unemployment rate . .06 Survey 2011 . 07

Cases of unemployment in Pakistan .08

Effect of unemployment ...10

Pakistan inflation rate ...10

Pakistan GDP rate .11 Conclusion


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Definition of 'Unemployment'

Unemployment occurs when a person who is activelysearching for employment is unable to find work. Unemployment is often used as a measure ofthe health of the economy. The most frequently cited measure of unemployment is the

unemployment rate. This is the number of unemployed persons divided by the number of peoplein the labor force.

Explain of Unemployment

Unemployment describes the state of a worker who is ableand willing to take work but cannot find it. A high unemployment rate generallyindicates recession in economy with few job opportunities.

Our country is facing the problem of unemployment. It has wasted our resources andpeoples incomes are depressed. The socio economics system of Pakistan has failed toprovide employment to the increasing labour force. Rate of unemployment is greater inrural areas as compared to urban areas.

There are many reasons for unemployment. Voluntary unemployment arises wheneducated people choose not to work on the going wage rate. Involuntary unemploymentarises due to inflexibility of wages in the face of economic shocks. Wrong governmentpolicies also cause the unemployment. The increase in population is another cause ofunemployment. The resources of the country are limited but demand is higher thansupply. Karachi is the biggest industrial base of Pakistan, but investors are hesitant toinvest there due to no rule of law. Our educational system is also responsible forincreasing unemployment rate among the educated youth.

There are some solutions available though. The liberal economic and fiscal policies ofthe government can reduce unemployment rate. Government should seriously announcean economic recovery package to change industrial production and boost exports. Newindustrial zones throughout the country would also generate new opportunities foremployment. Government should announce new packages for agriculture sector.

Unemployment rate

The unemployment rate represents the number unemployed as a percentof the labor force.


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Pakistan Unemployment Rate

The unemployment rate (10 years an d over) in Pakistanwas last reported at 5.95 percent in the 2010/11 fiscal year. From 1990 until 2009, Pakistan'sUnemployment Rate averaged 5.88 percent reaching an historical high of 8.27 percent inDecember of 2002 and a record low of 3.13 percent in December of 1990. The labour force isdefined as the number of people employed plus the number unemployed but seeking work. Thenonlabour force includes those who are not looking for work, those who are institutionalized andthose serving in the military. This page includes: Pakistan Unemployment Rate chart, historicaldata and news.


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Canada Unemployment Rate

The unemployment rate in Canada was last reported at 7.6 percent in January of 2012. From 1976 until 2010, Canada's Unemployment Rate averaged 8.53 percent reaching an historical high of 13.10 percent in December of 1982 and a record low of5.90 percent in September of 2007. The labour force is defined as the numbe r of peopleemployed plus the number unemployed but seeking work. The nonlabour force includes thosewho are not looking for work, those who are institutionalised and those serving in the military.This page includes: Canada Unemployment Rate chart, historical data and news.


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Urban areas, meanwhile, saw unemployment rise to 8.8%, from 7.2% last year, as the energycrisis continues to cripple most businesses in cities and towns with rising costs, forcing them tolay off people or slow their hiring plans.

Yet surprisingly, the share of the labour force employed by the manufacturing sector rose to

13.7% of the workforce, up from 13.2% last year, suggesting that Pakistani industries have foundways to mitigate the effects of the power shortage and have started hiring again.

Even more surprising is the fact that the only province that saw a fall in unemployment isKhyber-Pakhtunkhwa, which has been badly affected by violence and terrorism.

The agriculture sector continues to be the largest employer, with 45.1% of the workforceworking on farms and with livestock, three-quarters of whom are women.

About 34% of the labour force is described as people who either own their own business or workas independent contractors or day labourers with no fixed employer. Another 36% of workers

have a permanent employer.

Approximately 27.7% of people are described as aligned with family businesses , a figure thatmany labour economists suspect is where the government hides the true number of peopleunemployed, since it includes people who are not actively working and not receiving anycompensation.

Causes of unemployment in Paki stan: -Unemployment has become a global issue because of the economic recession that has hit almostevery country of world at the present time. However, in Pakistan, this problem has reached to themaximum level and with every passing day, it is even growing bigger.

There are some issues which cannot be denied and which are out of control as the globalrecession that also causes unemployment. But, in Pakistan, the major reason of this problem islack of proper system which is required to run a country in an appropriate way.In Pakistan, thousands graduates complete their education every year and start searching jobs.But, instead of generating more job opportunities, the government has put the country in criticalsituation.The shortage of electricity and gas has harmed the industry in Pakistan and countless peoplehave lost their jobs because their companies could not survive. Instead of increasing theopportunities, the bad policies of government are causing people to lose their jobs.Another important factor which adds fuel to the fire is that there is no merit at all. The vacancies

are announced but are filled with those who are highly incompetent. Corruption is touching thesky as people bribe the officials in order to get jobs and when they get, they also start doingcorruption.Those who are really capable of the jobs always wander here and there to find a good job butthey fail to get it because they do not have much money or contacts to bribe the officials.Unemployment in Pakistan haunts the bulk of general masses because they do not findopportunities and when they do, they fail to get consideration.


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Corruption is one of the major reasons of unemployment in Pakistan as only those people getdecent jobs in public sector departments who have a strong family background or have enoughmoney in their pocket to bribe the relevant officials.The government of Pakistan should work for the development of the country and should leavetheir personal benefits behind. They should take rapid steps to create more and more jobopportunities by facilitating the industry and all other sectors in the country.Government should also ensure the selection of people on merit when it comes to get a job in a

public sector department. Pakistan will make rapid progress when people will have jobs and willfeel that their future is secure.

M ajor Causes of U nemployment: -

1. Employment in the private sector absolutely stopped because they shifted their capital toother countries because of nationalization of industrial units badly affected theinvestment industrial sector.

2. The higher growth rate of population is the major cause of unemployment in Pakistan.The resources of the country are limited because population has exceeded the optimumlevel.

3. Karachi is the biggest industrial base of Pakistan, but investors are reluctant to investthere because of unrest and violence.

4. Our educational system is also responsible for increasing unemployment rate among theeducated youth. The attitude of our youth towards the choice of a career is unrealistic andunproductive. Rapid mechanization and computer technology also causing

unemployment.

5. Lack of infrastructure and facilities in the field of energy, telecommunication andtransportation also prevent the industrialist from setting up new industries.

6. Lack of enough industries to employ ever increasing number of graduate in Pakistan

7. The government is not involving in capital expenditures which create more jobs.

8. Main issue of unemployment in our country is that whenever a new technology comes assoftware or hardware then all the people starts studying about that. Then at the end, you

will see ten thousand students of a particular field about 5 to 10 job vacancies.

9. Things are not handled in appropriate manner, as the vacancies are less but jobseekers are more than that.

10. Opportunities are not enough and system of reference is so much indulged in our societythat if a company needs employees then workers of that company will provide some
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resume to them of their relatives and friends so in this way many people don t get theopportunity to apply for those jobs.

Ef fect of unemployment i n Pakistan: -

Defi nition I nfl ation Rate:-

True inflation begins when the elasticity of supply of output in response to increase in moneysupply has fallen to zero or when output is unresponsive to changes in money supply. Whenthere exists a state of full employment, the conditions will be clearly inflationary, if there isincrease in supply of money. But we don t subscribe to the classical view that when there is fullemployment we can say that when money supply increases it results partly in the increase ofoutput (GNP) and it partly feeds the rise in prices and when the supply of output lags far behind,the rise in prices is described as inflationary.

The following definitions are taken from the web to simplify the meaning andconcept of inflation .1 An increase in the general price level of goods and services; alternatively, a decrease in

purchasing power of the dollar.2 The number of dollars in circulation exceeds the amount of goods and services available for

purchase; inflation results in a decrease in the dollar's value.

3 The average rate of increase in prices. When economists speak of inflation as an economic problem, they generally mean a persistent increase in the general price level over a period oftime, resulting in a decline in a currency's purchasing power. Inflation is usually measured as a

percentage increase in the consumer price index.

4 The increase in the cost of living (prices for goods and services). Inflation is measured as anannual average by the CPI (Consumer Price Index.)

P AKISTAN I NFLATION R AT E : -

The inflation rate in Pakistan was last reported at 10.1 percent in January of 2012. From 2003

until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation raterefers to a general rise in prices measured against a standard level of purchasing power. The mostwell known measures of Inflation are the CPI which measures consumer prices, and the GDP


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deflator, which measures inflation in the whole of the domestic economy.

P AKISTAN GDP G ROWTH RATE The Gross Domestic Product (GDP) in Pakistan expanded 2.39 percent in the second quarter of2011 over the previous quarter. Historically, from 1952 until 2011, Pakistan's average quarterlyGDP Growth was 5.00 percent reaching an historical high of 10.22 percent in June of 1954 and arecord low of -1.80 percent in June of 1952. Pakistan's economy has suffered in the past fromdecades of internal political disputes, a fast growing population, mixed levels of foreigninvestment, and a costly, ongoing confrontation with neighboring India. However, IMF-approvedgovernment policies, bolstered by foreign investment and renewed access to global markets,have generated solid macroeconomic recovery during the last decade.


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Ef fect of unemployment i n Paki stan on i ts r eal estate sector: - Among many factors that are complicating the estate market , unemployment is one of them.Unemployment means people have no income, and no income means zero purchasing power. So, inunemployment individuals simply cannot afford to buy properties or pay their home mortgage ontime. Just imagine! Would you be able to pay your mortgage payments if you are jobless for morethan six months? Probably not!

Many home owners, due to unemployment, cant make timely payments and this puts many emp tyhomes in the market. So when unemployment increases, demand of properties declines whichleaves a lot of empty spaces across the country. This puts the entire real estate sector in distressedcondition due to decrease in housing prices.

Though unemployment can be seen in Pakistan yet the prices of the Pakistan properties are notlow. The reason behind is the increased inflation and the rate of unemployment which varies acrossvarious cities. Though unemployment is the major problem of Pakistan but the fact is thatunemployment is only high in certain cities where some cities offer more employment opportunitiesthan the others.For instance, if you look at the major cities of Pakistan like Lahore, Islamabad and Karachi, you willcome to know that employment opportunities are more as compared to the less developed cities likeChakwal, Rahim Yar Khan, Sargodha, Sialkot and many others. That is why; people from the ruraland less developed areas are relocating to the cities to make a better livelihood.

The influx of the people towards these major cities is one of the reasons for the increased demand ofproperties situated in these areas and as a result the prices of Lahore real estate , Pakistan realestate and Islamabad real estate are sky-rocketing, whereas, the prices of the properties in lessdeveloped cities are low due to their low demand.Moreover, experts believe that an area, where unemployment rate is high, crime rate is also high.The deprived sectors of the society resort to ill means in order to make their ends meet. It is anatural thing that the area with a high crime rate does not appeal to the real estate buyers. Thatbrings the phenomenon of Karachi is question where despite the high crime rate, the real estatevalue is also souring.

The reason behind that is the fact that it is the biggest city of Pakistan with important ports and it cannever lag behind with respect to business and employment opportunities. But still if we compare thedemand of Karachi real estate property with Lahore and Islamabad, we will come to know thedifference in prices. Properties in Lahore and Islamabad are higher as compared to the properties ofKarachi and one of the reasons of that is the high crime rate in Karachi.

Government of Pakistan is taking effective steps to wipe unemployment from the country. In thisregard, many new business projects are initiated in less developed cities from time to time togenerate employment opportunities. Also, the sincere efforts of SBP cannot be denied as manyscheduled banks are now opening new branches throughout Pakistan to generate employmentopportunities equally in all the cities of Pakistan. Not only the employment generated in this way willboost real estate sector but all the sectors of economy will also get a much needed boost.
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Acknowledgement :First of all I am very thankful to ALLAH Almighty who gave us plenty of

strength to complete our project.

After that we are very thankful to our respected teacher Madam Zarha who guides us sowell to perform our task well.

I also special thanks and regards to my family for their continuous support and Prayers for meduring the course of study.


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EXEXTIVE SUMMRY

In this assingment we discus about the big problem in all over the world of unemployment in

which we show the unemployment rate of pakistan and canda and we survy the GDP rate of2011 and define the unemployment .*. Causes of unemployment in Pakistan.

Unemployment has become a global issue because of the economic recession that has hitalmost every country of world at the present time. However, in Pakistan, this problem hasreached to the maximum level and with every passing day, it is even growing bigger.

1. Employment in the private sector absolutely stopped because they shifted their capital toother countries because of nationalization of industrial units badly affected theinvestment industrial sector.

2. The higher growth rate of population is the major cause of unemployment in Pakistan.The resources of the country are limited because population has exceeded the optimumlevel.

Karachi is the biggest industrial base of Pakistan, but investors are reluctant to investthere because of unrest and violence.and we discuse about the inflation

The inflation rate in Pakistan was last reported at 10.1 percent in January of 2012. From 2003until 2010, the average inflation rate in Pakistan was 10.15 percent reaching an historical high of25.33 percent in August of 2008 and a record low of 1.41 percent in July of 2003. Inflation rate

refers to a general rise in prices measured against a standard level of purchasing power.


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Conclusion

Our country is facing the problem of unemployment. It has wasted our resources and peoplesincomes are depressed. The sociol economics system of Pakistan has failed to provideemployment to the increasing labour force. Rate of unemployment is greater in rural areas ascompared to urban areas.

The shortage of electricity and gas has harmed the industry in Pakistan and countless peoplehave lost their jobs because their companies could not survive. Instead of increasing theopportunities, the bad policies of government are causing people to lose their jobs.

Government of Pakistan is taking effective steps to wipe unemployment from the country. In thisregard, many new business projects are initiated in less developed cities from time to time togenerate employment opportunities.

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