KARACHI Nov 12: Pakistan has the world’s lowest rate of women’s entrepreneurship with only one percent of female entrepreneurs compared to 21 percent of male, the World Bank said, terming job creation, access to jobs and economic opportunities for women as the three key challenges.

The Bank said less than 12 percent of firms in Pakistan have female participation in ownership compared to more than 18 percent in south Asia and 34 percent globally. Of these, only six percent of firms have majority female ownership, which is nearly half the south Asian average of 11 percent.

“Entrepreneurship can play a bigger role in meeting these challenges: through more productive self-employment, a more vibrant SME (small and medium enterprise) sector, and greater opportunities for women and youth,” it said in the latest twice-a-year Pakistan Development Update report.

The Washington-based lender said more than two million people are expected to join the labour force every year over the next 20 years with one million women expected to join the labour force every three years “thereby accentuating the need to stimulate entrepreneurship that can provide labour force entrants with variable job opportunities.”

“The challenge is to help those self-employed or potential entrepreneurs who aspire to grow by helping them overcome the barriers to entry and subsequent growth,” it added. “Some of the current self-employed could benefit from comprehensive entrepreneurship or personal initiative training as well as access to finance to improve the productivity of their activities and earnings.”

The World Bank emphasised youth bulge, low female labour force participation and slow progress in improving the quality of jobs and labour productivity characterise the country’s job challenge.

“With continuously high fertility rates, Pakistan’s working-age population is expected to continue growing at 2.1 percent per year for the next decade,” it said. It said female labour force participation is 57 percentage points lower than that of males and “is especially low in urban areas.”

“The nature of jobs has changes very little over the last 15 years in Pakistan,” it added. “Youth, despite being more educated, have significantly worse employment outcomes compared to older workers, as evidenced by a higher unemployment rate and a higher share of young workers in informal and unpaid jobs.”

The Bank further said deficiencies in the investment climate drives lack of entry and dynamism among SMEs, reflecting in the country’s low ranking on the doing business (DB) index.

It said the country’s ranking against DB indicators has fallen substantially in recent years. As of 2006, Pakistan’s business climate was considered generally more favourable than those of India, Indonesia, Turkey or Vietnam.

“But the most recent rankings suggest that deficiencies in Pakistan’s investment climate now inhibit firm growth,” it added. The World Bank, however, said the federal and provincial governments are taking steps to improve investment policies and promotion strategies to support general linkages between local and foreign firms.

The country has embarked on an ambitious investment climate reform initiative, which includes the implementation of a three-year doing business reform strategy as well as the simplification, streamlining and automation of regulatory interferences with the private sector.