1

Pakistan – Labour Market Profile 2013

Executive Summary

Main Issues on the Labour Market

- In the last couple of years several incidences has affected the economy and the livelihoods of people in Pakistan: Natural disasters, increased sectarian violence and the global financial crisis, which made the government take a loan from IMF to avoid default.

- Few women participate on the labour market.

The employment rate for women is 20% vs. 80% for men. The women who do, usually only find employment in limited types of jobs. Women tend to work as contributing family workers, whereas salaried jobs tend to go to men.

- Occupational safety and health standards in the mostly labour intensive jobs are appalling. Particular the garment sector where there are high fire hazards. The deadliest fires to date happened in September 2012, where over 300 workers perished in a textile factory.

Labour Market Developments

- Pakistan has had tradition for trade unionism and tri-partism ever since its independence. However, the trade union movement have always been fragmented into several trade union centres. Some moves towards trade union unity have been made and currently the largest trade union centre PWF, was formed as a merger in 2005.

- The 18th constitutional amendment, which was signed into law already in 2010, had the aim of decentralising political power and empower the country’s four provinces by transferring federal-level resources and responsibilities including industrial relations, to provincial governments. The decentralisation process has made it more difficult for the trade unions, because the labour law has not yet been implemented in the provincial laws, leaving the trade unions to deal with non-existing or antiquated provincial labour laws.

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Contents

Trade Unions ......................................................................................................................................... 3

Trade Unions in Pakistan ............................................................................................................................... 4

Employers’ Organisations ....................................................................................................................... 6

Central Tripartite Structures ................................................................................................................... 6

National Labour Legislation .................................................................................................................... 7

ILO Conventions ..................................................................................................................................... 8

Trade Union Rights Violations ................................................................................................................ 9

Working Conditions................................................................................................................................ 9

Workforce ........................................................................................................................................... 10

Unemployment and underemployment ..................................................................................................... 10

Sectoral employment .................................................................................................................................. 11

Migration ..................................................................................................................................................... 12

Informal Economy ....................................................................................................................................... 12

Child Labour ................................................................................................................................................. 12

Gender ......................................................................................................................................................... 13

Characteristics of the Working Age Population ..................................................................................... 13

Social Protection .................................................................................................................................. 15

General Economic Performance ............................................................................................................ 16

Trade ................................................................................................................................................... 17

Trade agreements ....................................................................................................................................... 17

Export Processing Zones .............................................................................................................................. 17

References ........................................................................................................................................... 18

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Trade Unions

Trade unions in Pakistan (2012) Number of trade unions 949

Dues (standard) N/A

Members of trade unions 1,865,141

Trade union members share of labour force 3 %

Trade union members to waged workers 8.6 %

Female member share of trade unions N/A

Number of CBAs N/A

Workers covered by CBAs N/A

Share of workers covered by CBA N/A

Labour force1 63 million

(PWF) Pakistan Workers Federation2

PWF was formed in 2005 as a merger between the national trade union centres All Pakistan Federation of Trade Unions (APFTU), All Pakistan Federation of Labour (APFOL) and Pakistan National Federation of Trade Unions (PNFTU). It has more than 400 affiliated unions representing 880,000 workers. PWF is headed by a president, followed by a chairmain and a general secretary. The president is Mr. Ajab Khan. PWF is a national federation along with regional federations, for each of the regions. It has permanent committees for organizing, credentials, education, trade union rights, legal and dispute settlement, economic and social policy, women youth and a special committee. PWF organises private sector workers within most of the service and industry sectors. PWF is an independent national trade union centre without political affiliations and is affiliated with ITUC.

(MLF) Muttahida Labour Federation3

MLF was formed in 1988 as a merger of five regional federations. It has 140 affiliated unions. Though the membership is low, MLF is considered an important trade union center. It organizes workers in the sectors of mines, fertilizer, cement, textiles, oil, engineering and other industries. MLF does not have political affiliations.

(NLF) National Labour Federation Pakistan3

NLF was formed in 2003. It has 103 affiliated unions. It organizes workers within the sectors of telecommunication, shipyard, municipal and local bodies, transport, rice mills, metal, glass bangles, fertilizer, sugar, beverages, wood and engineering etc. NLF is considered to be linked to fundamentalist forces and to be the labour wing of the political party

Jamaat-e-Islami.2

(NTUF) National Trade Union Federation Pakistan3

NTUF is a breakaway trade union centre from PTUF, formed in 1999. It has 86 affiliated unions. Most of its affiliated unions are former members of PTUF. NTUF organizes workers with the sectors of water and sewerage, printing, engineering, shipyard, textile, iron and steel, electronics, sugar etc. It does not have political affiliations.

(PNTLGWF) Pakistan National Textile, Leather,

Garments & General Workers Federation3

PNTLGWF was formed in 1962 initially with unions in the textile sector. It has 47 affiliated unions. More than 90% of the workers it organizes are from textile, garments and leather sectors. PNTLGWF does not have political affiliations.

Several other trade union centres exist in Pakistan. The trade union movement in Pakistan has always been divided and fragmented. In total there are 25 registered federations.

Pakistan inherited the tradition of tri-partism from British India and the concept was readily recognized and adopted in Pakistan after independence. Hence there is a long tradition for tripartism and a system is still in place.

Unions were considered to be powerful in the late sixties and early seventies and played a significant role in national politics. However, labour rights were severely curtailed during the military regimes of 1958-68 and 1977-85 which banned meetings, strikes, demonstrations.

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Trade Unions in Pakistan4

Members, Dues, Collective Bargaining Agreements (CBA) and Occupational Safety and Health committees

Trade Union / Trade Union Centre

Affiliation To national trade union

centre

Total Members

Female Members

Dues Number of CBAs

Workers covered by CBAs

Number of OSH com-mittees at

workplaces

Trade Union Centres

PWF Pakistan Workers' Federation 880,000 APFUTU All Pakistan Federation of United Trade Unions

510,000

MLF Muttahida Labour Federation 141,480 APTUC All Pakistan Trade Union Congress 110,000 NLF National Labour Federation Pakistan 100,311 NTUF National Trade Union Federation Pakistan

46,983

NLF General Federation of Trade Unions - Socialist Workers' Union

27,000

PNTLGWF Pakistan National Textile, Leather, Garments and General Workers Federation

12,520

QLF Quaid-I-Azam Labour Federation of Pakistan

9,179

APTUF All Pakistan Trade Union Federation

9,032

WDMF Watan Dost Mazdoor Federation 6,686 PTUF Pakistan Trade Union Federation 5,466 ULF United Labour Federation 4,742 APTUC All Pakistan Trade Union Congress 1,742 APGSTA All Pakistan Government School Teachers' Associations

-

PTOC Pakistan Teachers' Organization's Council

-

Industrial / Sectoral Federations

Pakistan Federation of Building & Wood Workers (PFBWW) RWP

13,759

Pakistan Oil, Gas & Mineral Workers Federation,

8,792

All Pakistan Local Government Workers Federation, Lahore

7,054

Pakistan Sugar Mills Workers Federation, Hyderabad

6,795

HBL Employees Federation, Karachi 5,371 Cement Union Federation of Pakistan, Thatta

3,184

Pakistan Construction Federation, Karachi 3,000 Federation of Trade Union of Fauji Foundation, Karachi

2,546

Pakistan Mines & Industrial Trade Union Federation, Hub Chowki Lasbella

2,338

State Life Insurance Employees Federation of Pakistan, Karachi

2,145

Pakistan Mines Workers Federation, Quetta

1,541

Ittehad Labour Federation Carpet Industries, Lahore

1,368

Uni Lever Employees Federation of Pakistan, Karachi

1,217

National Federation of Food, Beverage and Tobac Workers, Karachi

1,205

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Pakistan Hotel, Restaurant, Club, Tourism, Catering and Allied Workers Federation, Karachi

1,139

All Pakistan PMDC Employees Workers & Mines Federation, Islamabad

1,108

Employees Federation of CDA, Islamabad 978 National Federation of Grindlays Bank Employees Unions, Grindlays Bank Staff Union, Lahore

863

ABL Officers/Executive Federation of Pakistan, Rawalpindi

502

Standard Chartered Bank Employees Federation, Karachi

279

Pakistan Central Mines Labour Federation, (PCMLF) Quetta

199

All Pakistan Trade Union Organisation 279 Pakistan Labour Federation 199

15 largest unions affiliated to PWF

National Teacher Organization of Pakistan KARACHI

PWF 207,170

All Pakistan Akhbar Ferosh Federation ISLAMABAD

PWF 120,842

Pakistan Women Teachers Council KARACHI

PWF 65,500

Govt. & National Ized School Teachers Association KARACHI

PWF 48,000

United Teachers Technical Association LAHORE

PWF 34,200

Federal Teachers Association ISLAMABAD PWF 30,800 United women teachers association JHANG

PWF 16,950

Mazdoor Union Escorts Mater Works Limited LAHORE

PWF 15,200

Kohistan Mines Workers Federation CHOA SADEN SHAH

PWF 15,000

Servant of Education Society Employees Union KARACHI

PWF 15,000

CDA Mazdoor Union , ISLAMABAD PWF 14,280 Agriculture Workers Union CBA QUETTA PWF 12,500 Bhawalpur Labour federation BAHAWALPUR

PWF 12,350

Pakistan WAPDA Hydro Electric Central Labour Union QUETTA

PWF 10,000

All Pakistan OGDCL Mazdoor Ittehad Union ISLAMABAD

PWF 9,280

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Employers’ Organisations

Employers’ Federation of Pakistan5

EFP was founded in 1950. It mission is to strive for Industrial Peace, Harmony, Poverty Reduction and Business Promotion and pursue Policies and Legislation conducive to Investment, Economic Growth, Employment Generation, Decent Wages and keeping peace with socio-economic development of Country. Protect and Promote Employers’ Interests through effective and meaningful participation in

consultation at National and International level and provide assistance and guidance to the members through effective communication.

EDF provides services in advisory and consultancy, legal cell and produces publications. EFP is headed by Mr. President K. M. Nauman.

Central Tripartite Structures

National Industrial Relations Commission9

The Commission is composed of representatives of the government, workers and employers. It deals with labour issues which are trans-provincial and in the Islamabad Capital Territory. These include industrial disputes, registration of trade unions, collective bargaining agreements, unfair labour practices, advice to the government etc.

Mediation and arbitration

Industrial disputes are governed by the Industrial Relations Act:

9 An individual grievance is first decided

by the employer and the worker can appeal the decision to the National Industrial Relations Commission. Collective industrial disputes are first attempted to be settled by a Works Council, afterwards the parties may notice strike or lockout and a Conciliator is appointed by the National Industrial Relations Commission to attempt to mediate the dispute. If mediation fails the Conciliator shall try to persuade the parties to refer the dispute to arbitration.

Pakistan Tripartite Labour Conferences2

In earlier years after independence, Pakistan Tripartite Labour Conferences were held at regular intervals every year or alternate years. These tripartite national level forums were instrumental in reaching consensus on ratification of ILO Conventions; enactment of new labour legislation and amendment in existing legislations; and in formulating national views on agenda items before International Labour Conference meetings etc.

The Pakistan Tripartite Labour Conference is not a statutory body and with the imposition of military rule in 1958 and at intervals in subsequent years, the Conferences lost their importance, and met only sporadically. The last meeting of Pakistan Tripartite Labour Conference was held in 2001 after a lapse of 13 years, which paved the way for the formulation of the 2002 labour policy – the Industrial Relations Act 2002.

Other bi/tripartite organs2

- Employees' Old-Age Benefits Institution

- Workers Employers Bilateral Council of Pakistan (WEBCOP)

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National Labour Legislation

Constitution6

The federal Constitution which was restored in 2003 and last amended in 2010, guarantees the freedom of association and the right to join and form unions. It prohibits forced labour and child labour under 14 working under hazardous conditions. The State shall secure humane conditions of work, ensuring that children and women are not employed in vocations unsuited to their age or sex, equitable adjustment of rights between employers and employees, social security and maternity benefits. Local government are encouraged to institute representation of workers.

Factories Act

The Factories Act from 1934, last amended in 1997 regulates Occupational Safety and Health standards, working hours, time off and child workers.

7 It applies

to factories employing ten or more workers. Workers, who are not covered by the Factories Act, can be covered by the Mines Act, and those employed in

shops and commercial establishments, are covered by the West Pakistan Shops and Establishments Ordinance.

8

Industrial Relations Act9

The Act from 2012 was adopted to update industrial relations with the Constitutional amendment of 2010. With a few exceptions it covers all workers. It regulates trade unions, workers participation and industrial disputes. It also defines unfair labour practices and establishes the National Industrial Relations Commission.

Few labour laws apply to the federally administered tribal areas. Several other legislations exist that regulate and sets standards and restrictions for the labour market.

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8

ILO Conventions

Ratified ILO Conventions11

Subject and/or right Convention Ratification date

Fundamental Conventions

Freedom of association and collective bargaining

C087 - Freedom of Association and Protection of the Right to Organise, 1948 1951

C098 - Right to Organise and Collective Bargaining Convention, 1949 1952

Elimination of all forms of forced labour

C029 - Forced Labour Convention, 1930 1957

C105 - Abolition of Forced Labour Convention, 1957 1960

Effective abolition of child labour

C138 - Minimum Age Convention, 1973 2006

C182 - Worst Forms of Child Labour Convention, 1999 2001

Elimination of discri-mination in employment

C100 - Equal Remuneration Convention, 1951 2001

C111 - Discrimination (Employment and Occupation) Convention, 1958 1961

Governance Conventions

Labour inspection C081 - Labour Inspection Convention, 1947 1953

C129 - Labour Inspection (Agriculture) Convention, 1969 Not ratified

Employment policy C122 - Employment Policy Convention, 1964 Not ratified

Tripartism C144 - Tripartite Consultation (International Labour Standards) Convention, 1976 1994

Up-to-date Conventions

Working time C014 - Weekly Rest (Industry) Convention, 1921 1923 C106 - Weekly Rest (Commerce and Offices) Convention, 1957 1960

Social Security C118 - Equality of Treatment (Social Security) Convention, 1962 1969

Seafarers C185 - Seafarers' Identity Documents Convention (Revised), 2003 2006

Employment policy and promotion

C159 - Vocational Rehabilitation and Employment (Disabled Persons) Convention, 1983

1994

Fundamental Conventions are the eight most important ILO conventions that cover four fundamental principles and rights at work. Equivalent to basic human rights at work.

Governance Conventions are four conventions that the ILO has designated as important to building national institutions and capacities that serve to promote employment. In other words, conventions that promotes a well-regulated and well-functioning labour market.

In addition, there are 71 conventions, which ILO considers “up-to-date" and actively promotes.

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Trade Union Rights Violations

According to ITUC:12

Trade union rights are not fully guaranteed in law at the federal or provincial level. In practice, trade union rights are also often violated. Several trade union activists were arrested, beaten, detained or discriminated against during the year, while at least one was murdered. Private employers often refuse to recognise unions and commonly use union-busting tactics along with police violence. Pakistan was found to be the deadliest nation for journalists with at least seven deaths. Precarious work and increasing privatisation were major causes of industrial action in 2011.

According to the U.S. Annual Human Rights Report:13

Several legal problems arose from Pakistan’s structure as a federation, where trans-provincial labour laws were ambiguous and authority of many labour related areas are transferred to the provinces. Enforcement of labour laws remained weak, in large part due to lack of resources and political will.

ILO has four active cases and three follow-up cases in the Committee of Freedom of Association. They concern various allegations against employers and the government, such as anti-union activities, harassment and violence against trade union members.

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Working Conditions

Wages and earnings Monthly average and legal minimum wages

Source Current rupees

2011 US Dollar

Average wage (2011)

Global Wage Database14

9715 113

Minimum wage (2012)

Dawn15 8000 83

% minimum wage to value added per worker (2012)

Doing Business16

2.4 %

Growth of real average wage (2000-2011) Global Wage

Database16

29 %

Growth of real minimum wage (2000-2011)

100 %

% of minimum wage to value added per worker denotes the minimum wage share of labour productivity. Reported as ratio of minimum wage to value added per worker in the Doing Business Report.16

The minimum wage for an unskilled worker was raised from 7000 to 8000 rupees in 2012.

15 The minimum

wage is to be renegotiated every 2nd year, though this does not always happen.

Both the minimum wage and average wage have seen substantial increases in real terms since 2000, with the real minimum wage doubling since 2000.

14 75% of the

increase of the real minimum wage was from 2000 to 2001, when it was increased from 1500 to 2500 rupees.

According to the U.S. Annual Human Rights Report,13

many protections of workers in the labour legislation do not apply to agricultural workers, workers in factories with fewer than 10 employees, domestic workers or contractors. Provincial governments are responsible for enforcing the labour standards, and their enforcement differs: In the Sindh and Punjab province for example, there are policies against surprise inspections of work places.

Health and safety standards were poor in all sectors. There was a serious lack of adherence to mine safety and health protocols. For example, many mines had only one opening for entry, egress, and ventilation. Informal sector employees faced multiple precarious situations, particularly in less visible, informal sectors such as domestic work.

In September 2012, over 300 workers perished in similar fires in the two garment factories, one of them killing 289 workers.

17 Though the deadliest in

Pakistan's history and one of the deadliest industrial fires in world history, it was not unprecedented or unexpected for that matter. Most of the world's garment industry is in South Asia, where there are low wages. Pressure to keep labour costs low and thereby not comply with safety expenses is a major cause.

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Workforce

Pakistan has a very large gender difference in employment rates, with fewer than a fourth of women ever entering the labour market. Pakistan has considerably fewer working poor than the average for South Asia. Of working women, slightly more are poor than men.

Asia has seen a strong growth in the middle class during the last decade. Pakistan especially has a larger lower middle class than the average for South Asia, but it has grown slower: In South Asia 18% lived for $2-4 a day and 3.9% for $4-20 in 1999. In 2008 23% lived for $2-4 a day and 5.7% for $4-20. In Pakistan 28% lived for $2-4 a day and 5.6% for $4-20 in 1998. In 2007 33% lived for $2-4 a day and 6.8% for $4-20. The dollars are in purchasing power parity.

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Working Poor1

Age 15+

Share of workers

in total employment

1.25 USD

a day 2 USD a day

Pakistan (2005)

Both 19 % 57 %

Male 19 % 55 %

Female 22 % 62 %

South Asia (2005) 38 % 73 %

South Asia (2012) 24 % 61 %

Working poor measures employed people living for less than US$1.25 and US$2 a day, as proportion of total employment in that group

Unemployment and underemployment

Unemployment is relatively low at 6%. Unemployment is more common in urban areas, among women and the youth. Urban unemployment among women is particular high at 20.7% compared to men 7.1%.

At an overall rate of 1.2%, time-related underemployment is very low in Pakistan. Usually underemployment is reported as those who involuntarily work below 40 hours per week. The measure for Pakistan is those who work less than 35 hours. The concept of underemployment does sometimes also include those who are employed below their skill-level

Interpretation of the open unemployment and employment rates as indicators of a well-functioning labour market is problematic in developing countries. When unemployment is not an option where a person can survive, work of some sort has to be found, often casual and informal work. Unemployment should therefore be understood in relation to the strength of social safety nets, the prevalence of informal employment and how much of informal employment is underemployment due to few formal employment possibilities.

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Unemployment, youth unemployment and underemployment (2010-11)

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Un-

employment

Youth Unemployment

age (15-19) - (20-24)

Under-employment

Total 6.0% 11% - 10% 1.2%

Urban 8.8% - 0.9%

Rural 4.7% - 1.3%

Male 5.1% 10% - 8.5% 0.9%

Female 8.9% 11% - 15% 2.1%

Employment rates1

(2012), Age and Sex distribution

Sex Age Employment

rate

Male & female

Total 15+ 51 %

Youth 15-24 41 %

Adult 25+ 56 %

Male Total 15+ 80 %

Youth 15-24 63 %

Adult 25+ 88 %

Female Total 15+ 21 %

Youth 15-24 18 %

Adult 25+ 22 %

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

15+

15-24

25+

Male and female Female Male

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Sectoral employment

Despite increased industrialisation, 45% of Pakistanis work in agriculture contributing 22% to GDP. The manufacturing sector is large both in employment and contribution to GDP. This reflects the large textile production in Pakistan.

The labour market is very gender segmented: Women have very low employment rates. 75% of employed women vs. 36% of men work in agriculture. Outside agriculture women almost only find employment in the Manufacturing Sector and Community, Social and Personal Services.

Sectors Share of GDP39

0%

10%

20%

30%

40%

50%

60%

Agriculture

Industry

Services

Employment (2003)1 & GDP share (2010)22

Sector & Sex distribution – (Graph without Agriculture)

Sector Male

employment Female

employment GDP share per sector

Mining and quarrying 56,000 1,000 2.3 %

Manufacturing 5,196,000 1,181,000 18.6 %

Electricity, gas and water 341,000 2,000 2.1 %

Construction 3,052,000 36,000 2.0 %

Trade, restaurants and hotels

6,999,000 179,000 18.2 %

Transport and communication

2,661,000 20,000 12.5 %

Finance, real estate and business services

669,000 23,000 6.4 %

Public administration, and other services

5,638,000 1,068,000 16.3 %

Agriculture 14,404,000 7,515,000 21.6 %

0% 4% 8% 12% 16%

,0 2000000,0 4000000,0 6000000,0 8000000,0

Male Female GDP share by Sector

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Migration

Many people migrate out of Pakistan, and the net migration rate is 1 out of 419 inhabitants from 2006-10, which is more than the average for South Asian countries. Pakistan also receives more remittances.

The top three destinations for migrants are India, Saudi Arabia and the United States Emirates.

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The government is encouraging overseas employment. The Bureau of Emigration and Overseas Employment had 456,893 registered Pakistani’s working overseas.

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Most Pakistani working abroad are semi or unskilled.25

Migration39

Net migration (2006-2010)

Pakistan - 1,999,998

Net migration to average population per year (2006-2010)

Pakistan - 1 : 419

inhabitants

South Asia - 1 : 920

Inhabitants

Personal transfers i.e. remittances received, % of GDP (2011)

Pakistan 5.8 %

South Asia 4.3 %

Informal Economy

Of non-agricultural employment, 74% are estimated to be employed in the informal sector. Overall, the informal sector has had the same share for the last three surveyed years, whereas female formal employment has increased.

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Most informal employment is in the agricultural sector, which as of 2008 employed 45% of the population. Depending on the status in employment

own-account workers and contributing family workers also make up most of the informal economy, respectively constituting 34% and 29% of the employment. Women are more commonly family workers, whereas men are more commonly own-

account workers.1

The informal economy is dominated by precarious low paying and poorly protected jobs.

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Child Labour

Updated nationwide data on child labour is not available for Pakistan, but a UNICEF survey of the province Balochistan is available. Balochistan comprises 5% of the population, is sparsely populated, more rural and contributes less to GDP than the other provinces.

In Balochistan, child labour is higher in rural (19%) areas than urban (12%). Boys (19%) were slightly more likely than girls (16%) to be engaged in child labour. Older children at the age 12-14 (14%), were less likely to be engaged in child labour than younger at the age 5-11 (19%). Poverty is also a factor, with the poorest quintile of households having a higher incidence of child labour (25%) than the richest (8.6%).

The U.S. Annual Human Rights Report,13

give estimates at around 11 million child labourers.

Working children Proportion of all children in age group

Region Year Type Proportion

Balochistan (age 5-14)26

2010 Child labourers 17.3 %

Asia and the Pacific27 (age 5-17)

2008

Children in employment

20.4 %

Child labourers 13.3 %

Hazardous work 5.6 %

Children in employment includes all children who conduct some kind of work, whereas child labourers is a narrower term without mild forms of work. Hazardous work is the worst from of child labour as defined in ILO C182.

13

Gender

There are large gender differences on the labour market in Pakistan. There is a 5% minimum quota for women employees in organisations, however it largely remains unimplemented. Except for some senior positions, secretarial or clerical work, women employed outside the household is generally uncommon. According to ILO, women’s underrepresentation on the labour market can be attributed to social constraints and hostile working environments.

28

As noted elsewhere in this report: 21% of women are employed vs. 80% of men, and unlike men most are employed in agriculture. The employed men are also

about twice as likely to be in waged and salaried employment. Women are more likely to be unemployed and underemployed. Women have much less education than men, and fewer girls enrol in schools. The gender difference in child labour is comparably small.

The low participation of women on the labour market is also evident in an Enterprise Survey from the World Bank in 2007, which reported that 6.7% of firms had female participation in ownership compared to 15.6% for the average in South Asia, and that 1.2% of full time employees were women, compared to South Asia at 16%.

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Characteristics of the Working Age Population

Pakistan’s population is divided between the more than 47% who have never been to school, and those who have an education, where most have progressed into secondary schools and many have completed secondary education and continued to universities.

The gender difference is large, with women having 30% less education than the total. Women are

underrepresented in all education categories, especially with more women in the "no schooling" category. The graph above shows the educational attainment of all Pakistani above 25 yearsand gives a glance of the human capital of the labour force.

Highest level attained and years of schooling in the population30

(2010), Population 25+, Total and Female

Highest Level Attained Total Female

No Schooling 47.3 % 63 %

Primary Begun 3.0 % 1.9 %

Completed 14.3 % 11.6 %

Secondary Begun 10.1 % 6.3 %

Completed 19 % 13 %

Tertiary Begun 1.2 % 0.6 %

Completed 5.2 % 3.6 %

Average year of total schooling 4.9 years 3.4 years

Educational Gini Coefficient 0.57 0.70

Primary, secondary and tertiary is the internationally defined distinction of education. In Denmark these corresponds to grundskole, gymnasium & university.

The educational Gini Coefficient is similar to the Gini Coefficient, but instead of measuring the distribution of income in a population, it measures the distribution of education measured as years of schooling among the population.31

0% 20% 40% 60% 80% 100%

Total

Female

No Schooling Primary - Begun Primary - CompletedSecondary - Begun Secondary - Completed Tertiary - BegunTertiary - Completed

14

Enrolment in Primary, Secondary and Tertiary schools (2000-2011)39

Total and Female, Pakistan and South Asia

Net enrolment is the ratio of children of official school age, who are enrolled in school to the population of the corresponding official school age. Gross enrolment is the ratio of total enrolment, regardless of age, to the population of the corresponding official school age. Gross primary enrolment is therefore sometimes higher than 100 %.

Fewer Pakistani enrol into both primary, secondary and tertiary education, than the average for South Asian countries.

Though fewer girls enrol in education, the gender difference becomes smaller for higher education, and almost disappears for enrolment into universities.

Pakistan had 389,624 pupils in vocational training in 2011, and in general more students are enrolled into vocational training in Pakistan than the average for the South Asian region.

Vocational Training39

Pupils in vocational training (2011)

Pakistan 389,624

Ratio of pupils in vocational student to all pupils in secondary education (Average 2006-2010)

Pakistan 3.76 %

South Asia 1.18 %

Ratio of pupils in vocational training out of 15-24 year olds (Average 2006-2010)

Pakistan 0.97 %

South Asia 0.47 %

40%

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Net primary school enrolment

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Net secondary school enrolment

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Gross tertiary school enrolment Pakistan ,Totalenrolment

Pakistan ,Femaleenrolment

South Asia ,Totalenrolment

South Asia ,Femaleenrolment

15

Social Protection

The Employees' Old-Age Benefits Institution (EOBI) provides old-age, disability and survivor pensions and an old age grant for private employees in firms of five or more workers, excluding family and self-employed workers. The Employees' Old-Age Benefits Institution provides old-age pensions for private employees in firms of five or more workers, excluding family and self-employed workers. The employee pays 1% and the employer 5% of the minimum wage to the scheme.

32 EOBI has 5,104,854 person registered as

insured. According to the labour force survey 2010/11, there were around 7.7 million employed in the non-agricultural formal sector, and since there are around 3 million public employees in Pakistan the EOBI likely covers all formal workers.

If all 7.7 million formal and public workers are covered by pension schemes, this only amounts to 14% of the employed labour force, still higher than the 1.5% reported in the ILO Social Security Inquiry.

38

Pakistan has several retirement pension schemes for public sector employees, depending on whether they are in the employed in the federal government, provincial government, armed forces or autonomous and semi-autonomous organisations.

33

Employees, except family labourers and self-employed are entitled to work injury, disability, medical and survivors benefits. Benefits are paid as a lump-sum, except for non-permanent disability. Employers pay 6% of payroll to the Employee’s Social Security Institutions (ESSI) in each province, which pay the benefits.

32

A Voluntary Pension System (VPS) was established in 2005 and launched in 2007, it is open for self-employed.

Pakistan has a number of non-contributory social assistance schemes. Bait-ul-Maal a food and income transfer programme, Child Support Programme,

Punjab Female School Stipend and the Benazir Income Support Programme.

34

There are a state-based option for Zakat and Ushr, the Islamic founded social welfare. The funds are directed into various programmes, such as educational and medical assistance.

33 Zakat, which is the main

contributor to the system, requires sunni-muslims, who can opt out of the state based system, to pay 2.5% of their financial assets per year.

35

The ILO convention 183 on maternity leave protection has not been ratified. Following the West Pakistan Maternity Benefit Ordinance of 1958 maternity leave is set at 12 weeks, with at least 6 weeks after delivery. Wages are fully paid by the employer

36

Public spending on social protection schemes (2004)

Public social protection

expenditure, excl. health

2004 rupees 78 billions

2011 USD 2.3 billions

% of GDP37 1.5 %

per capita 14

per worker 42

of government revenue 18.3 %

Public health expenditure

% of GDP37 0.4 %

Coverage of contributory schemes to potential demographic

38

Contributors to scheme

Sickness (2004) 1 %

Maternity (2004) 1 %

Life insurance (2006) 1.5 %

Disability (2006) 1.5 %

Old age pension (2006) 1.5 %

Old age pension recipient ratio 65+ 29.1 %

16

General Economic Performance

Key Facts (2011)

GDP39 GDP

per capita39 (PPP)

GNI39 Human

Development Index40

Gini Coefficient

(2008)39

211 billion USD

2745 USD

220 billion USD

0.5 0.30

128 of 173 countries

145 of 187 countries

35 of 156 countries

Doing business41

Control of corruption42

Government effectiveness42

Rule of Law42

105 of 183 countries

-1.00 -0.82 -0.90

179 of 212 countries

165 of 212 countries

170 of 212 countries

Pakistan has several challenges which affect the economy, such as political instability, sectarian violence, recurring floods, growing poverty and a growing population. During later years violence in particular has grown, compromising the stability of the country.

Pakistan’s inflation has risen fast over the last decade, peaking with 18% in 2009, and inflation is projected to stay at 10%-15%.

44

Pakistan has also felt the global financial crisis, with a balance of payment crisis making the government accept an IMF stabilisation package in 2008.

43

In GDP per capita Pakistan is falling behind the average of developing countries in Asia. This is largely due to the growth of China, but the neighbour India has also overtaken Pakistan, and the gap is projected to widen.

Capital formation is behind the rest of South Asia, and has fallen in recent years, indicating that less investment is made in infrastructure and productive equipment.

The doing business indicator ranks Pakistan medium at 105 out of 183 countries. A high ranking means the regulatory environment is more conducive to the start-up and operation of a local firm. Pakistan scores high on Protecting Investors and Getting Credit, but low on Getting Electricity, Paying Taxes and Enforcing

Contracts. However, Pakistan scores very low on the three governance indicators Control of Corruption, Government Effectiveness and Rule of Law.

GDP per Capita (PPP), trend and forecast44

Inflation, trend and forecast44

Gross fixed capital formation (% of GDP)39

0

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Pakistan South Asia

17

Trade

With an export of 11% and import of 18% of GDP Trade plays a relatively small role in the economy of Pakistan.

The labour intensive production of textiles and garments are the dominant export sector in Pakistan. These products form the majority of exports to the US and EU. Though the export sector is somewhat diversified, few other manufacturing industries except textiles and garments exists.

Due to Pakistan’s and India’s longstanding rivalry, direct trade between the two countries had been all but blocked for many years. However recently, trade relations have begun to thaw and restrictions are being eased.

45

Trade agreements

Pakistan benefits from the United States’ Generalised System of Preferences (GSP). GSP is a unilateral trade benefit from the U.S. government, allowing duty and quota free access for some product. A country can be removed if it is violating or do not take steps to uphold the ILO Core Labour Standards. Each country is reviewed annually, by the US government. Pakistan is one of the largest exporters under the US GSP arrangement, with around $131 million exported within the scheme.

46

Starting in 2014, Pakistan will be able to benefit from the EU’s unilateral GSP+ incentive arrangement, which allows duty and quota free access for some products. To be granted and continue to be granted GSP+, a country must ratify and effectively implement conventions within human rights, environmental and the eight ILO Core Conventions. The European Parliament and European Council will examine each beneficiary country every two years.

47

A major reason for the introduction of GSP+ was that EU lost a case at the WTO in 2004 for giving Pakistan GSP trade benefits with criteria’s that did not apply to all countries.

48 EU then introduced the GSP+ with a

general criterion on vulnerability of export composition, which Pakistan did not fit within. The GSP+ legislation has been reformed in 2012 expanding the vulnerability criteria, which now fits the composition of Pakistan’s export sector.

Export Processing Zones

The Export Processing Zone Authority governs the ten EPZs in Pakistan, the first were established in 1980. According to an ILO survey from 2007,

49 the EPZs

employed around 888,000 workers, exporting for around $8 billion, mainly to the US, EU and South-East Asia and producing products such as electronics, chemicals, garments, leather etc. According to the ITUC,

50 workers are not allowed to form or join unions,

bargain collectively or strike.

Trade and Foreign Direct Investment

Exports51 (2012)

Imports51 (2012)

FDI flow39 (average 2006-10)

FDI Stock51 (2012)

25 billion USD

41 billion USD

3.3 billion USD

22 billion USD

11 % of GDP 18 % of GDP 1.4 % of GDP 9.7% of GDP

Products share of exports (2010)52

Pakistan's main export markets (2011)53

Animal products Vegetable products FoodstuffMineral products Chemicals, etc. Plastics / RubbersLeather & Furs Textiles FootwearWood products Stone / Glass MetalsMachinery / Electrical Transportation MiscellaneousServices

EU; 23%

US; 15%

UAE; 8% Afghanistan;

8%

China; 8%

Turkey; 3%

Others; 37%

18

References

1 ILO, Key Indicators of the Labour Market Database

2 LO/FTF Council

3 ILO, Profile of Labour Federations, History of Trade Union Movement, Industrial Relations and Labour Policies in

Pakistan 4 ITUC, List of Affiliated Organisations, 2012 & www.younionize.info & www.apfutu.org & ILO, Profile of Labour

Federations, History of Trade Union Movement, Industrial Relations and Labour Policies in Pakistan & LO/FTF Council 5 http://efp.org.pk

6 ILO, NATLEX, The Constitution of the Islamic Republic of Pakistan

7 ILO, NATLEX, Factories Act, 1934 (XXV of 1934)

8 ILO, DIALOGUE, National Labour Law Profile: Islamic Republic of Pakistan, 2011

9 ILO, NATLEX, Industrial Relations Act, 2012 (Act No. X of 2012)

10 ILO, NATLEX, Country Profile Pakistan, Basic Laws

11 ILO, NORMLEX, Country Profiles

12 ITUC, Annual Survey of violations of Trade Union Rights, 2012

13 U.S. Department of State, Annual Country Reports on Human Rights Practices, 2011

14 ILO, Global Wage Database 2012/13

15 Dawn, Minimum wage increased to Rs 8000, EOBI pension to Rs 2000, 1st May 2012

16 IFC, World Bank, Doing Business 2013, 10

th ed.

17 Equal Times, Pakistan: Criminal negligence cost the lives of over 300 workers, 12 September 2012

18 The Economist, Garment factory fires: A "distinctly South Asian" tragedy, Dec 6th 2012

19 World Bank, PovcalNet database

20 Kucera D. & Roncolato L. (2008), Informal Employment: Two contested policy issues, International Labour Review,

Vol. 147 (2008). No. 4 21

Instituto Nacional de Estatística, Inquérito Integrado à Força de Trabalho (IFTRAB 2004/05), 2006 22

ADB, Key Indicators for Asia and the Pacific 2012 23

World Bank, Migration and Remittances Factbook 2011 24

Ministry of Finance, Pakistan Economic Survey 2011-12, Population Labor Force and Employment 25

ILO, Decent Work Country Programme, India (2007-2012) 26

UNICEF, Childinfo, Percentage of children aged 5–14 engaged in child labour 27

ILO, Accelerating action against child labour, International Labour Conference, 99th

Session 2010 28

ILO Country Office for Pakistan, Decent Transport for Working Women, 2011 29

World Bank, Mozambique Enterprise Survey, 2007 30

Barro, Robert and Jong-Wha Lee, April 2010, "A New Data Set of Educational Attainment in the World, 1950-

2010." NBER Working Paper No. 15902 31

Calculation from based on Thomas, Wang & Fan (2001), with data sets from Barro-Lee (2010) and Psacharopoulos and Arriagada (1986). 32

International Social Security Association, Country Profiles, Pakistan 33

ILO, SECSOC, Pakistan, Overview of Schemes 34

Brooks World Poverty Institute, Barrientos et al., Social Assistance in Developing Countries Database, Version 5.0 July 2010 35

Pakistan Institute of Development Economics, Mahmood & Nasir, Pension and Social Security Schemes in Pakistan, PIDE Working Paper 2008:42 36

ILO, TRAVAIL, legal database, 2011 37

ILO, GESS, World Social Security Report, 2010/2011 38

ILO, Social Security Department, Social Security Inquiry 39

World Bank, World dataBank 40

Human Development Report, Global Report, Statistical Annex, 2011

19

41

World Bank, Ease of Doing Business Index 42

World Bank, Worldwide Governance Indicators 43

IMF, IMF Executive Board Approves US$7.6 Billion Stand-By Arrangement for Pakistan, Press Release No. 08/303, November 24 2008 44

IMF, World Economic Outlook Databases 45

The Economist, India and Pakistan: Clever steps at the border, May 12th 2012 46

Office of the United States Trade Representative, Generalized System of Preferences (GSP) 47

EC, DG TRADE, Development, Generalized System of Preferences (GSP) 48

WTO, Dispute Settlement: DISPUTE DS246, European Communities — Conditions for the Granting of Tariff Preferences to Developing Countries 49

ILO database on export processing zones (revised), 2007 50

ITUC, Report for the WTO General Council review of Trade policies of Pakistan, 2012 51

CIA, World Fact Book, 2011 52

MIT, Alexander Simoes, The Observatory of Economic complexity, What does Pakistan export? 53

European Commission, DG TRADE, Bilateral Relations, Statistics