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Pakistan needs to redress human capital deficiency:SBP

Overhaul of education system, focus on vocational, skills training
of the work force required

Jahangir Hayat
In order to maximize returns from the opportunities arising out of
the implementation of CPEC projects, Pakistan would have to take
serious notice of its human capital deficiency, a recent research
report of State Bank of Pakistan said.
The government needs to devise a framework focusing on skill-
development of the workforce and adequate provision of
associated services in order to stand on an equal footing with the
rest of the regional economies, who are intently focusing on
reskilling, digitization and technological advancements to gain a
competitive advantage, the report highlighted.
Firstly, a significant overhaul of the education system of the
country is required to address the dearth of adequately skilled
graduates entering the labor force, the report stated, adding, that

as the findings from the Human Capital Index reveal, the
effectiveness of the primary education needs to be enhanced
significantly in order to improve the level of knowledge-absorption
and increasing the level of enrollment in schools.
“Of equal importance is the need for revising the curriculum of
academic institutions to better reflect the needs of current and
future occupations,” the SBP report underscored.
Secondly, focus on vocational and skills training of the workforce
are critical in ensuring that the employability levels of the domestic
workers remain intact, or ideally increase, during the transitional
stage of job transformation and technical advancement,
emphasized the report.
A welcome development in this regard is that the Chinese firms are
already involved in technical skill building of the Pakistani youth to
enable them to be prepared for work under the CPEC programs,
the report informed.
“This includes emphasis on vocational training (such as the
construction of Pak-China Technical and Vocational Institute at
Gwadar), scholarships and exchange programs for university and
college students as mentioned in the Joint-Statement, and
collaborative efforts with Pakistani technological platforms (such as
the AliBaba eFounders Fellowship program with NIC Karachi),” it
explained.
However, as stressed in previous reports, there needs to be an
overarching policy to govern the skill-building process from the

public domain to keep the progress aligned with the national
objectives, the report said, adding that the devolution of labor
administration to provinces under the 18th Amendment, though,
means that provinces must also facilitate the center in this regard.
“Recently, Sindh, Punjab and Khyber Pakhtunkhwa, all have
launched labor policies with the objective of increasing jobs,
providing a safe and healthy work environment, ensuring gender
parity in employment, and training their respective labor force
according to the needs of a transitioning economy.
This is an appreciable step, but it is important that these policies
are also implemented in letter and spirit to actually realize the
envisioned gains,” the report suggested.
Another encouragement development is that the National
Vocational and Technical Training Commission (NAVTCC) of
Pakistan is in the process of introducing officially defined skill-set
categorizations to help improve the placement and skill matching in
the domestic labor market. Under the revised National Vocational
Qualifications Framework (NVQF), an assessment criterion is being
developed to classify workers according to skill-sets and to
facilitate their gradual promotion to higher levels, the report
further explained.
On parallel terms, the TVET (Technical and Vocational Education
and Training) sector institutions would also be assessed based on
indicators such as affiliation/accreditation with relevant bodies;
adequacy of training facilities; teaching staff quality; type of trades

being offered; employability of graduates; alignment with NVQF;
and health and safety requirements, etc.
The objective is to foster a sense of healthy competition amongst
the training institutes to bring overall improvement in the sector,
the report explained.
Thirdly, on the technology front, the Digital Pakistan Policy released
last year includes an optimistic blueprint for the enhancement of
human capital via expansion of digitization in the country, it was
informed in the report.
Emphasis on digital and financial literacy and inclusion would be
vital to enable both individuals and businesses to take advantage of
the ICT in e-commerce, Fintech and BPO segments of the market,
the report stressed.
Finally, a strong focus on higher-level education pertaining to the
complementary services sector (such as accountancy, consultancy,
legal, etc.) would be needed so that the domestic labor force can
fulfil the associated requirements of new industries enacted under
the proposed SEZs. If implemented in an effective manner, these
measures hold the potential to gradually improve the labor
standards and provide the country with means to maximize returns
from the potential opportunities arising both under CPEC and
because of the rapid global shift towards knowledge-intensive and
technology driven economic growth models, the SBP report
concluded.

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