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  • Arooj Shahzad
  • Nov, 2017
  • 521
  • National

For the Human Capital to be smart and sustainable, the knowledge, skills and values of the youth should be inclusively carved and polished.  Human capital plays a critical role in economic growth and poverty reduction.

Dismal at the dreary creeping phenomenon of underdeveloped Human Capital in Pakistan, the human skills relentlessly remain untrained and irrelevant according to the projected demand of the economy. The Population of Pakistan particularly youth, outgrows the employment opportunities. In the world of globalization, realization of the ideology that human capital has infinite tenability of attracting fortunes, the human capital serves as the driving force for the economy.

Factors for Economic Growth

Human Capital

Foreign Capital

Domestic Capital

For the Human Capital to be smart and sustainable, the knowledge, skills and values of the youth should be inclusively carved and polished.  Human capital plays a critical role in economic growth and poverty reduction. From a macroeconomic perspective, the development of human capital improves labor productivity; facilitates technological innovations; increases returns to capital; makes growth more sustainable, which, in turn, supports poverty reduction. Thus, human capital is regarded at the macro level as a key factor of production in the economy-wide production function. From a microeconomic perspective, education increases the probability of being employed in the labor market and improves earnings capacity. Thus, at the micro level, human capital is considered the component of education that contributes to an individual’s labor productivity and earnings while being an important component of firm production. Human Capital has the tendency to make labour markets more attractive for the Foreign Capital and the Foreign Direct Investments and also it has the competency to increase the GDP of a country.

According to the Global Human Capital Report 2017, published by World Economic Forum, lamentably, Pakistan ranks 125th on the Global Human Capital Index. There are a number of reasons for underdeveloped Human Capital in Pakistan.

Rapid population growth in Pakistan has given rise to poverty, unemployment and divergent types of crimes. There is low enrollment of children at the primary level due to the very social evil of child labour. Scrutinizing the system of education at secondary and tertiary level, the curriculum and syllabus is antiquated and lack practical depth.  Students suffer social, cultural and technological lag in the practical working of organizations as compared to what they have been theoretically taught in the universities.

Underdeveloped countries are unable to invest on education, health, nutrition and skill-based activities due to low level of income and poverty. In developing countries, studies have shown that those with less education have: higher maternal mortality, children with higher under-five mortality, less knowledge of key health interventions, lower levels of immunization coverage, and lower nutritional status. Access to proper care during pregnancy and delivery is also sharply differentiated by the level of a woman’s education.

Gender disparities and the conservative approach of the society in which preference is given to a son to get education rather than a daughter also diminishes the diversity from the human capital. The gender balance of entrants to primary education provides an early indicator of the success or failure of efforts to narrow the gender gap in education. In general, gender disparities in education are higher at the level of the adult population than for children currently attending school.

From the developing countries, capable people migrate in search of job opportunities in other countries and this leads to the problem of brain-drain in Pakistan.   Increasingly, student migration has paved the way for a migrant workforce or for permanent settlement. Migrants educated in the host country might be at an advantage in finding employment locally. In some cases, student migration is used as a channel for clandestine labour migration. As recruitment of highly skilled professionals has become competitive, foreign students, especially those in science and technology, are being seen as part of a qualified migrant workforce.

The role of Human Capital formation and workforce development in economic growth of an underdeveloped country is of paramount importance. Effective ways should be adopted for the development of Human Capital. It is prudent to study the four distinct elements of H...

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