1. International Islamic University
Islamabad.
Assignment: # 01.
Submitted To: Mr. Hazir Ullah.
Submitted By: Group “J”.
Members of group.
Syed Furqan Haider. (3045)
Ali Hammad. (3053)
Shehriyar Khan. (3052)
Mudasir Raja. (3055)
Syed Abdul Matien. (3033)
Globalization & Unemployment in Pakistan.

2. Globalization:
Globalization (or globalization) describes the process by which regional economies,
societies, and cultures have become integrated through a global network of political ideas
through communication, transportation, and trade. The term is most closely associated
with the term economic globalization: the integration of national economies into the
international economy through trade, foreign direct investment, capital flows, migration,
the spread of technology, and military presence. However, globalization is usually
recognized as being driven by a combination of economic, technological, sociocultural,
political, and biological factors.[2] The term can also refer to the transnational circulation
of ideas, languages, or popular culture through acculturation. An aspect of the world
which has gone through the process can be said to be globalised.
Unemployment is a central problem because when unemployment is high, resources are
wasted and people’s incomes are depressed.
Unemployment is the situation where the country is not making full use of its resources.
Unemployment is a central problem because when unemployment is high, resources are
wasted and people’s incomes are depressed; during such periods, economic distress also
spills over to affect people’s emotions and family lives.
Classification of Unemployment:
Unemployment is classified into three categories.
• Frictional unemployment (workers who are simply moving between jobs)
• Structural unemployment (workers who are in regions or industries that are in
persistent slump)
• Cyclical unemployment (workers who lay off when the overall economy suffers a
downturn. In Pakistan unemployment is of structural and cyclical nature.

3. Understanding the sources of unemployment has proved one of the major challenges of
modern macroeconomics. Voluntary unemployment may be or when qualified people
chose not to work out the going wage rate unemployment occur. The key element in
understanding involuntary unemployment is the inflexibility of wages in the face of
economic shocks. The same situation is in Pakistan, inflexibility arises because of costs
involved in administering the compensation system.
The upward creep in the natural rate arises mainly because of demographic trends
particularly the higher proportion of teenagers in the labor force. In addition, government
policies are also increasing unemployment rate i.e. Golden Shake Hand, ban on jobs
increasing unemployment rate.
Unemployment in Pakistan:
In Pakistan labor force include all persons who are of ten years and above, and during the
period are without work, currently available for work and seeking for work. On the basis
of the existing population of 142.87 millions with Labor force participation rate of 27.46
percent, the total labor force comes to 39.24 million. According to this about 2.4 million
person of labor force were estimated as unemployed in 1999, as construction
and transport sectors have absorbed 11.2 percent, 6.8 percent and 5.7 percent, compared
to 10.5 percent, 7.2 percent and 5.0 percent respectively in 1994-95.
Economies are powered by consumer spending and savings investment. Unemployed
workers earn no wages; they spend little and save less. Economies with high levels
of unemployment are stalled economies
Causes of Unemployment:
The major causes for unemployment among the poor in Pakistan include a lack of
technical skills, little or no education, low income worsened by indebtedness to
moneylenders, no career guidance, lack of awareness regarding available jobs,
high expectations without commensurate experience, little understanding of work
ethics and the weak economy. Low income can be improved by small enterprise

4. development (SED) activities, entrepreneurial and technical skills, increased
financial resources and management skills, and increased participation of women
in economic activities providing more income for the family as compared to a
single breadwinner.
Political Instability:
Political instability is one with the successive governments failing to come up with any
substantial plan to tackle growing unemployment. There is a vicious cycle
of unemployment and the mandarins at the top don’t have a clue as to how to
Reduce it.
Low Quality of Education:
It all boils to the primary or basic education in Pakistan about which little attention has
been paid and which continues to deteriorate. Budgetary allocations are very small for
such an important sector with the result that we are unable to produce quality graduates at
a tertiary level. The curriculum is outdated and the teachers too are pathetic. Unless we
don’t have a plan to improve basic education we can’t expect quality graduates being
churned out at the tertiary level.
Literacy Rate (2003 EST.) Male: 59.8%
Total population: 45.7% female: 30.6%
Effects of Unemployment on the People:
People have lost their hopes and find ill ways to satisfy their utmost needs. It is
anticipated that if no concrete actions are taken against these problems in the coming
years, the crime rate will become three times higher than the present. People will become
poorer and will lose hope and trust in Government.
During the last five months, 889 people committed suicide in different areas of the
country. The study of suicide cases by Madadgaar, revealed that unemployment, poverty,
skyrocketing prices of food items, fast deepening sense of insecurity and financial

5. problem seem to be the main reasons behind the sudden rise in the cases of self-murder in
the country.
Impacts of Unemployment on the Economy:
From Okun’s law we know that for every 2% fall in GNP relative to potential GNP,
the unemployment rate rises by 1% point. High unemployment is a symptom of waste –
for during recessions, when unemployment is high, the economy is not producing up to
high level. When economy is not producing sufficiently, we can say that we are unable to
use our full resources for production purposes. Economy will not grow as fast as it can if
become able to produce at high level.
Social Impact:
However large the cost to economy of unemployment, a recounting of Rupees lost does
not adequately convey the human, social and psychological toll that periods of persistent
involuntary unemployment bring.
Although unemployment has plagued capitalism, the Industrial Revolution,
understanding its causes and costs has been possible only with the rise of modern
macroeconomic theory. It is apparent that recessions and the associated
high unemployment are extremely costly to the economy.
Suggestions:
 Economic Growth
Govt. should make efforts to push economic growth process. For this
purpose Economic Revival Package should announce for the revival of
industries sector, to stimulate production and investment.
 Exports
Government should seriously try to boost exports through broadening the tax
base and lowering tariffs.

6.  Agriculture Sector
Govt. should announce a package for the development of agriculture
sector.
 Fiscal and Monitory Policies
Beside this a number of fiscal and monetary measures should take to
attract industrialists and particularly foreign investment.
 Technical Training
More technical and vocational training facilities should be provided. In
this way unemployed people will get the chance to enhance their skills
and become able to earn reasonable income.
 Self-Employment Schemes
With a view to reduce educate unemployment; self-employment scheme
should be encouraged in true manners.
Of course we need economy to get out of its present sordid affairs. Plus
we are hardly seeing investors showing interest in the manufacturing
sector with FD Is proving to be a mere drop in the ocean at this stage.
In conclusion, another erupting challenge standing before Pakistan is wide-
spread unemployment. Thousands of educated graduates are jobless.
Hundreds of thousands of unemployed workers are forced to lead their lives
below their status. Large scale unemployment has serious effects on the
country’s production also. Moreover, the country’s population has drastically
increased during recent years.

7. References
http://www.pide.org.pk/pdf/psde
%2018AGM/ImpactofGlobalizationOnPakistans.pdf
http://socyberty.com/economics/unemployment-in-pakistan/4/
http://ishrathusain.iba.edu.pk/speeches/globalization/Impact_of_globalization
_Mahboobul_Haq.pdf
http://www.theglobalist.com/storyid.aspx?StoryId=6204
http://www.einnews.com/pakistan/newsfeed-pakistan-unemployment