Pakistan’s economy is at a critical juncture, and the country’s first-ever Digital Population and Housing Census presents a unique opportunity for policymakers to recalibrate economic priorities. This comprehensive national exercise offers vital data for informed decision-making, providing insights that could significantly shape the economic, financial, and business landscape.

The Seventh Population and Housing Census, approved by the Council of Common Interest, marks the largest digitisation exercise of its kind in South Asia. With a total population of 241.5 million, the census reveals a 16.3 per cent increase compared to the population recorded in 2017.

This surge, coupled with the constant shift in urban migration, has wide-reaching implications for the economy, particularly in terms of resource allocation, infrastructure development, and employment generation.

The increasing urbanisation trend necessitates more proactive measures to create jobs in cities where the population growth rate is highest

Economic pressure points

The results of the digital census underscore the need for urgent economic reforms. The population density rose from 260.88 persons per square kilometre in 2017 to 303 persons per square kilometre in 2023. This substantial increase puts immense pressure on public services, infrastructure, and housing, which are already under strain in many parts of the country.

At the national level, the population growth rate stands at 2.55pc while the urban population growth rate has accelerated to 3.65pc significantly outpacing the 1.90pc growth in rural areas.

The shift toward urbanisation is driven by better education, healthcare facilities, and employment opportunities in cities. As a result, Pakistan’s urban population increased from 75.7m in 2017 to 93.8m in 2023, indicating a growing demand for housing, transportation, and social services in urban centres.

A youth-centric challenge

Pakistan’s young population poses both opportunities and challenges for the economy. According to the Labour Force Survey 2020-21, the unemployment rate is at 6.3pc. With a rapidly expanding labour force, particularly among the youth, creating sufficient employment opportunities is critical to avoid socio-economic instability.

The government has taken steps to address this through skill-development initiatives like the “Prime Minister’s Youth Skill Development Programme,” which aims to equip young people with the skills necessary to thrive in a dynamic economy.

Furthermore, The Youth Business and Agriculture Loan Scheme helps to foster youth entrepreneurship by providing easier access to finance. These programmes are designed to absorb the growing labour force by encouraging self-employment and facilitating job creation across sectors like agriculture and technology.

Despite these efforts, the increasing urbanisation trend necessitates more proactive measures to create jobs in cities where the population growth rate is highest. The influx of people from rural areas into cities further intensifies the need for industrial expansion and infrastructural improvements, particularly in sectors that can absorb a large, youthful workforce such as manufacturing, services, and technology.

The increasing population also brings with it a myriad of economic consequences. One of the most immediate effects is the need for substantial public spending on infrastructure, healthcare, and education. Urban areas are already struggling with overburdened resources. This will require targeted investment in infrastructure to accommodate growing urban populations and ease congestion in major cities like Karachi, Lahore, and Islamabad.

Leveraging the census for growth

The results of the digital census should serve as a wake-up call for policymakers to re-evaluate their approach to economic development.

One of the key takeaways is the need to prioritise job creation, particularly in urban areas where the population is growing the fastest.

Fostering a business environment that encourages investment in manufacturing and services is critical. Special economic zones, industrial parks, IT parks, and public-private partnerships can help absorb the growing workforce by offering employment opportunities while improving Pakistan’s industrial output and export capacity.

There is a pressing need to focus on human capital development. Pakistan’s young population can be an asset to the economy, but only if they are equipped with the necessary skills. Expanding the reach of technical and vocational education and training programmes, as well as integrating technology into traditional industries, could drive economic growth while reducing unemployment.

Another important aspect is improving the ease of doing business to attract foreign direct investment, which can further bolster employment opportunities. Enhancing digital infrastructure and streamlining bureaucratic processes are key areas that need reform to ensure Pakistan remains competitive in the global market.

Pakistan’s first Digital Population and Housing Census offers a wealth of data that, if used effectively, can help steer the country toward sustainable economic growth. However, this will require targeted policies aimed at addressing the challenges posed by rapid urbanisation, high population growth, and youth unemployment.

The government’s existing programmes for skill development and entrepreneurship are steps in the right direction, but more needs to be done to unlock the full potential of the labour force. By leveraging this data to make informed decisions, Pakistan can chart a course toward long-term economic stability and growth.

The writer is the head of content at a communications agency

Published in Dawn, The Business and Finance Weekly, October 28th, 2024