Pakistan' s Future: Hope and Resilience

• Mohammad Ishaque
• Published: January 27, 2025

Pakistan, a country with a population of 230 million and ranked as the fifth largest by size, is faced with an uncertain future. Despite its vast resources and potential, the country remains in the grip of political instability, economic challenges, and social unrest. From soaring inflation and rising unemployment to crumbling infrastructure and unreliable internet services, many Pakistanis are wondering if the country's current trajectory can ever lead to sustained growth and prosperity. As businesses struggle to expand and the youth face fewer job opportunities than ever before, the question of whether Pakistan is truly heading in the right direction has never been more urgent.

Pakistan has been continuously grappling with political uncertainty. This instability results in a lack of policy continuity, discouraging long-term investment and economic growth. Hussain and Shear (2024) concluded that an uncertain environment dissuades investors, preventing them from engaging in high-risk ventures. Consequently, the limited availability of physical capital hinders business expansion, affecting trade, revenue, and fiscal balances.

Economic uncertainty leads to lower growth and higher inflation, interest rates, and debt. Due to these challenges, companies hesitate to invest or hire, and consumers are reluctant to spend. These factors cause rising unemployment, as economic growth slows. Another theoretical perspective suggests that high uncertainty increases financing costs for companies, exacerbating inflation, unemployment, and debt issues in both the short and long term.

From both economic and social perspectives, Karachi, Pakistan's largest metropolitan city, is facing significant challenges. Parents are working tirelessly to educate their children, yet the number of university graduates continues to rise year after year, see Figure 1. However, job opportunities to accommodate this growing number of graduates are shrinking.

Figure 1: Number of Graduates in Pakistan overtime

Source: Higher Education Commission's Annual Report 2022-2023

Figure 1 shows that the number of graduates in Pakistan is increasing annually. According to the Pakistan Economic Survey 2022-23, rapid population growth has become a global issue, with serious implications for developing countries, including Pakistan. The country is under immense pressure due to the depletion of natural resources and increasing demand for civic facilities.

Table 2: Labor Force and Employment Indicators

Notes: Table has been taken from Pakistan Economic Survey 2022-23, Chapter 12.

Evidence of the unfavorable economic environment is reflected in the closure of the Airlift startup in Pakistan. Airlift, which delivered groceries and goods, raised $85 million in its largest funding round in 2021, but faced difficulties as the global market downturn made further fundraising quite challenging. The only other sizable startup in Pakistan is Food Panda, a food delivery service. In response to the tough economic environment, many individuals, particularly youth, have turned to food delivery and ride-sharing services. Many use these services as part-time jobs to supplement their income to offset rising fuel costs. Food delivery riders, who work between 8 to 10 hours daily, typically earn between 50,000 to 60,000 Pakistani rupees per month. The increasing trend of ride sharing and food delivery highlights the deeper economic struggles faced by Pakistani citizens. However, in Pakistan, earning a livelihood for one's family is fraught with challenges. The food delivery and ride sharing services rely heavily on network connectivity through mobile apps. Despite the ongoing energy crisis, Pakistan is also facing internet disruptions. In a globally connected world, where internet disruptions are nearly inconceivable and the Internet of Things (IoT) is seamlessly integrated, Pakistan is lagging far behind. Even a single hour of internet downtime can result in billions of rupees in losses to the economy.

Food delivery riders across Pakistan are facing significant challenges due to slow internet speeds, which impact their ability to efficiently complete orders. The slowdown has caused delays in receiving orders, navigating routes, and communicating with customers, leading to frustration among both riders and consumers. According to riders, poor internet connection has resulted in longer delivery times, with some orders taking up to twice as long to complete. This not only affects customer satisfaction but also reduced the number of deliveries riders could complete, directly impacting their earnings. The issue is particularly severe during peak hours when internet traffic is at its highest. Riders have expressed concerns that unless internet infrastructure is improved, the food delivery sector, which has seen tremendous growth in recent years, could suffer. Food delivery companies are urging authorities and internet service providers to address these issues promptly to ensure the industry continues to thrive without jeopardizing the livelihoods of riders. Some companies are even exploring potential solutions, such as offline features for their apps, to mitigate the impact of internet disruptions. However, without significant improvements in internet speed and reliability, these measures may offer only temporary relief.

To ensure the financial and social stability of Pakistan's citizens, the government must act to address these pressing issues. People are quietly enduring rising inflation, which may not be increasing in the numbers presented by the Pakistan Bureau of Statistics but is high in the actual world. This has made them seek alternative ways to provide for their families. However, this should not be taken for granted. The people of Pakistan must not be punished for poor decisions made by the government.

Government Initiatives

The government has taken several steps to create employment opportunities, such as:

• Prime Minister Youth Business & Agriculture Loan Scheme: This scheme aims to promote entrepreneurship among youth by providing business loans on simple terms and low-interest rates through 15 commercial, Islamic, and SME banks. A special 25% quota is reserved for women. Micro-financing through small business loans will encourage job creation among Pakistan's youth.
• National Innovation Award: The National Innovation Award provides young entrepreneurs with an opportunity to present their innovative ideas in various sectors, particularly focusing on eco-innovation. Winning teams will engage with the private sector and startup industry, receiving scholarships and training to foster the startup culture and generate sustainable, green jobs.
• Skill Development: Under the "Skill for All" program, 128,866 youth have been trained and certified in high-tech/digital IT and conventional trades, with 71% of them finding employment. Additionally, nearly 13,000 trained youth have secured overseas employment. The program has also trained 141 transgender individuals.

Despite these initiatives, unemployment in Pakistan remains a significant issue. The number of visa applications for emigration has increased, as political instability continues to erode confidence among youth and investors. The Pakistani business community abroad lacks trust in the country's system, and as a result, they are reluctant to invest in Pakistan. Remittances have become the country's only lifeline.

Before the situation worsens, we must ask the critical question: "Are we heading in the right direction?"

References:

Hussain S, Shear F (2024) The Economic Costs of Political Instability: Evidence from Pakistan. Business Review 19, 1–23.

Higher Education Commission. (2023). Annual report 2022-2023. Retrieved from https://www.hec.gov.pk/english/services/universities/HEDP/PublishingImages/Pages/Component-4/Annex%203%20HEDR%20Annual%20Report%20(C4).pdf

Pakistan Economic Survey 2022-23. (2023). Government of Pakistan. Retrieved from https://www.finance.gov.pk/survey_22_23.html

Closure of Airlift startup and its impact. (2023). Bing. Retrieved from https://www.bing.com/search?q=Closure+of+Airlift+startup+and+its+impact

Food delivery riders facing challenges. (2023). The Financial Daily. Retrieved from https://thefinancialdaily.com/food-delivery-riders-facing-challenges/

Author Details:
Mohammad Ishaque
ACCA Finalist
mohammadishaque256@gmail.com