Unemployment rate in Sindh is mounting, both in the urban and rural areas - this is the startling disclosure in the State Bank's second quarterly report 2004-05 on economic performance released last week.

The overall unemployment rate in the province has increased from 5.2 per cent in 01-02 to 5.97 per cent in 03-04.

The rise in joblessness rate is much more pronounced in rural areas where it grew by 1.15 per cent to 4.38 per cent in 03-04 from 3.23 per cent in 01-02. In urban areas, the comparative unemployment increased by 0.47 per cent to 7.56 per cent from 7.09 per cent.

In sharp contrast, the national employment scene has somewhat improved by 0.6 per cent as jobless rate dropped down from 8.3 per cent in 2001-02 to 7.7 per cent in 02-03. This improvement has mainly come from Punjab where employment opportunities increased by about 1.15 per cent. A big majority of the new 2.9 million jobs were created in Punjab.

Despite an increase of 1.8 million in the overall national labour force, there were enough job opportunities to absorb the additional labour force and employ from the pool of carry-overs.

There are reasons to believe that the labour continues to migrate from Punjab and NWFP into Sindh. This provincial migration aggravates employment situation in Sindh and is resulting in transfer of resources.

Out of an estimated 40 million population, six per cent or a huge army of two million are jobless. They are roaming in the cities and villages in search of jobs. At least a quarter of this unemployed force-half a million-is educated and many of them are graduates, post graduates, technicians, engineers and professionals trained in accounting and management. Sindh boasts of 49 per cent urbanization and 54 per cent literacy in the urban areas.

Economists are convinced that a deterioration has now set in the provincial economy including a process of de-industrialisation. The fall in Sindh's irrigation water share for last four years has caused Rs 42 billion loss to the farm economy. This has adversely impacted employment scene which has become more aggravated by unabated labour migration from Punjab and the NWFP.

Almost $6 billion (Rs 360 billion at the rate of Rs 60 a dollar) industrial investment is said to have been made in Pakistan during last five years, as evident by the increasing import of machinery and raw material every year. Investment flows have apparently not reached Sindh's industrial estates.

Mirza Ikhtiar Baig, chairman, SITE Association of Industry has a lot to say when it comes to growing disparity in industrial growth in Punjab and Sindh. "Punjab has relatively better infrastructure facilities, less utility costs and a far liberal environment for business than in Sindh where infra-structure has virtually crumbled down, the utility cost and stamp duty are high; there are 22 provincial government agencies which haunt us almost round the year". A team of industrialists including Baig met Prime Minister Shaukat Aziz last Monday with a long list of complaints.

Akbar Zaidi, a noted economist, attributes the slump in Sindh's employment opportunities to 'jobless economic growth''. As he points out ,it was a global phenomenon of' growth without jobs.'

Asad Saeed, also a practicing economist calls it a capital- intensive growth which is creating all sorts of distortions. He believes that the State Bank report which highlights unemployment problem and the issue of growing disparities warrants immediate policy intervention before the situation gets out of the hand.

"The de-industrialization process in Sindh picked up in 2001 affecting job opportunities in urban areas'' notes a research report 'Pakistan's Provinces' prepared by a Mumbai (India) based Strategic Foresight Group. It includes inputs from the Pakistani economists too.

The report quotes an official survey which reveals a drop of 2.5 per cent in industrial employment from July 2001 to March 2002 in the province. Industrial production growth during this nine month period was only 0.3 per cent.

Persisting drought, crippling tax structure imposed under the influence of World Bank and the IMF, fluctuations in exchange value of rupee, breakdown of infra- structure facilities and growing lawlessness were blamed for the closure of industries.

Located at the extreme end of Indus Basin, Sindh suffers from a geographical disadvantage. It gets plentiful water when there is no need and suffers water scarcity when crops are being planted or are growing and need water. It has only one source of water and that is Indus River.

Three barrages are now more than 40 years old and are in a state of extreme disrepair. During the period 2000 to 2002 the share of Sindh's river water was cut down drastically in four seasons. In the year 2003, heavy rains and floods devastated crops, livestock and property.

Reduction in river water flows has led to sea intrusion in Badin and Thatta where over 1.2 million acres of farmland is now totally submerged under sea waters. A rough estimate puts Sindh's agricultural losses in last four years at Rs42 billion.

While Sindh suffered heavy losses from a cut in river water share, and was forced to cut down its cultivated area, the cropped area in Punjab increased substantially. This is the reason for a drop in rural unemployment in Punjab but a rise in Sindh.

While an over centralised and insensitive establishment at Islamabad cannot be absolved of the rut that has set in Sindh, the land-holding structure in the rural areas of the province and the quality of political leadership from both urban and rural areas are also equally to be blamed.

"Sindh has the highest incidence of absolute land less ness'' discloses the Annual Review Report for the year 2004 by the Social Policy and Development Centre SPDC). It says that 62 per cent or nearly two million rural households in rural Sindh are absolute land less.

Hardly 26 per cent or about 700,000 rural households have the share of land ownership which is the lowest in Pakistan. Sindh has the highest percentage of farm holdings of over 100 acres and such farms are 15 per cent of the farm area.

The SPDC report entitled 'Combating Poverty: Is Growth Sufficient' makes it clear that the concentration of land holding in the hands of land owning elites leads to control over other rural markets as well.

This happens, the report explains "because of the interlocking nature of transactions in the rural markets for land, labour, agricultural inputs, credit, output and the commodity markets''. The monopolistic control that such interlocking provides to the landed elite generally results in the capture of public resources thus compounding poverty.

Jehangir Tareen, a federal industries and productions minister who is also a progressive farmer prepared a detailed report for the State Bank of Pakistan to point out how the big landlords hijack the bank loans for farms. A vast majority of small farmers depend on the big farmers to give them credit on 100 per cent and even higher rate of interest.

In Sindh, the majority of the legislators come from the elite big farmers who own among themselves 15 per cent of the provincial agricultural land but encroach upon big tracts of state farms.

The kutcha area between the two banks of river Indus is their popular hunting ground. There is no clear demarcation of farms in kutcha area. This is considered to be the most fertile area.

All big landlords have their illegal farms in this area and they construct their comfort homes. These also serve as sanctuaries for the criminals and a prison for those who are abducted for ransom.

As far back as 1992 and 1993, the late Chief of Staff General Asif Janjua made an attempt to demarcate the kutcha area with plans to construct police stations, schools, dispensaries and health units. But the big feudals came out ferociously against such an attempt and the plans were dropped.

Political leadership from elite farmer families remain oblivious of the needs of the people. They are in the government and are in the opposition. Their main interest is to get a share in the public sector development funds.

Pakistan Peoples Party can rightly claim to have taken a big initiative in introducing third generation of land reforms and introducing tax on agricultural income. Late Zulfikar Ali Bhutto announced land reforms and imposition of tax on agricultural income in 1977. It was made part of 1977 budget. But before the land reforms could be implemented, General Ziaul Haq took over and the first act he did was to repeal land reforms and tax on agriculture without making any formal announcement. He won over the loyalty of all big feudals.

The same feudals and their children are again with the government. If they are in the opposition they have the same attitude. The PPP leaders now feel shy of discussing the land reforms. With such a stranglehold of the feudals in the province, social justice, poverty alleviation and jobs for all remains an illusion.