THE real impact of Prime Minister Imran Khan’s economic package for the construction industry — declared as the largest-ever support to the sector — is yet to unfold. Announced in early April, the government has branded the package as a response to mitigate the socioeconomic impact of the pandemic on Pakistan’s economy and job market.

The package includes upgradation of the construction sector as an industry, massive tax relief in terms of duty waivers on materials used, withdrawal of capital gains tax, a Rs30 billion subsidy for investment in the Naya Pakistan Housing Scheme, and exemption of the condition of declaration of source of income for investors.

The sector was the first to reopen following nationwide lockdowns. The prime minister argued that besides its role in employment generation, the industry has backward and forward linkages and would benefit allied sectors such as cement, iron steel, bricks and services.

Technically, the construction sector includes both civil engineering and infrastructure projects in the public and private sectors. Globally, it is recognised as an important, fast-growing industry. However, the general understanding of the construction sector within the government’s package is that of housing and real estate, that too mainly in the private sector.

Jobs without labour protection leaves workers vulnerable.

Housing and real estate is a major contributor to Pakistan’s economy as it contributes significantly to its GDP. Statistics suggest an annual demand of 350,000 housing units against a supply of 150,000 units, with a shortage of 200,000 units annually. The demand includes 65 per cent for low-income, 25pc for middle-income and 10pc for high-income groups.

The industry is likely to benefit from the package and increase demand for skilled and unskilled labour. According to the latest Labour Force Survey, the sector employs 7.6pc of Pakistan’s 65.5 million-strong labour force. It is the third largest employer following agriculture and manufacturing.

However, even while the government links the boost to the construction sector to employment generation, it makes no reference to the quality of the said employment. The construction industry sources cheap labour from all corners of the country, characterised by young, poor, unskilled workers, the majority of whom are non-literate and vulnerable to exploitation.

Labour in the lowest tier of the industry, the brick kilns, are among the most marginalised. Multiple studies suggest that the majority of workers in over 20,000 brick kilns are bonded labourers. Working conditions in the upper tiers, at construction sites in big cities, are not any better. Construction workers are hired through sub-contractors, stay on site in poor conditions, and work long, unregulated hours in extremely harsh and risky conditions. There is hardly any concept of the provision and use of personal protective equipment. Occupational diseases like cough, eye infections, back pain, etc are common.

An example of how the compromised occupational safety and health conditions endangers workers is the death of six workers who fell to the ground at a high-rise construction site in Karachi’s posh Clifton area last year. The investigation revealed that they were not even provided helmets while working at one of the tallest multistoreys in the city.

Ironically, workers in the construction sector do not fall under the labour regulatory framework of the country. Therefore, the Sindh Labour Department never inspects any construction site, even in the wake of last year’s accident in Clifton.

Similarly, the Sindh Employees Social Security Institution has not registered a single construction entity, denying the labour in the sector any social security benefits. Unlike neighbouring India, Pakistan has no specific law that regulates employment contracts in the sector and extends labour welfare benefits. The sector is entirely informal and workers are poorly paid.

Labour in Pakistan needs renewed attention. The government should negotiate improved labour rights while announcing tax exemptions and offering subsidies to boost any particular sector. Minimum labour standards — such as employment contract, living wages, eight-hour workdays, paid leave and provision of health and safety facilities — must be made part of the economic packages being offered at the expense of the public exchequer.

It is equally important to regulate the sector’s workforce by extending industrial laws that include mandatory registration of workers with welfare institutions for social security benefits and regular labour inspections to check the health and safety arrangements.

Construction workers build the infrastructure that comprises the backbone of our economic and social structures. Denying them a place in the prime minister’s package for the construction sector makes it an empty package.

The writer works at the Pakistan Institute of Labour Education and Research.

Published in Dawn, June 22nd, 2020