KARACHI, Oct 5: Unemployment is on the rise and round half-a- million people are added to the ranks of the jobless every year, according to latest official statistics available here.

Every year, about 40 per cent of the new entrants into the labour do not get jobs. Officials acknowledge that one of the most serious consequences of the sluggish economic growth is high employment rate. A poor financial position in the 1990s resulted in sharp cuts in development spending. A gradual worsening of the governance profile impaired the government’s ability to deliver essential goods and services to the poor.

Independent economists say that the current global events have the potential of creating an economic downturn if the threat of war is sustained for a long time to contain the Taliban. It would create more unemployment. And the government is worried about” the adverse social repercussions.”

According to a draft of the interim Poverty Reduction Strategy submitted to donors, there are 4.3 million people without jobs in the country. The rate of real unemployment has touched 10.4 per cent.

Pakistan is faced with the twin challenges of reviving growth and reducing poverty. Job creation, say officials, is one of the government’s key priorities. And the employment intended to be created in the construction sector and, in small and medium sector industries. Poverty reduction requires rapid economic growth which is equitable in nature and broad-based in its reach.

The interim Poverty Reduction Strategy has been made an essential part of the IMF’s Poverty Reduction and Growth Facility (PRGF), says Thomas C. Dawson, director, external affairs relations department IMF, and adds “so that it is something that is on track.”

The core principles of the strategy are: Engendering growth, creating income generating opportunities, improving social sector outcomes and reducing vulnerability to shocks. And the multi-pronged approach of the strategy to reduce poverty is intended to ensure that economic growth is complimented by policies that enhance social development.

The strategy paper recognizes that while reducing poverty helps growth by enabling the poor to participate productively, yet, growth itself is not sufficient for poverty reduction.

Sources here said that the IMF is looking at the poverty reduction strategy in collaboration with the World Bank. Thomas C. Dawson indicated at a news briefing in Washington last week that the successful conclusion of the Standby Arrangement makes the PRGF “even more expected”.