25 January 2004	Sunday	02 Zilhaj 1424

ISLAMABAD: The country does not have any statistics to ascertain the current unemployment rate as it was 8.3 per cent as per 2001 Labour Force Survey, but the common sense , newspaper advertisements and all circumstantial evidence suggest that a lot of people are now getting jobs each day.

This was stated by Dr Ashfaque Hassan Khan, Economic Advisor to the federal government and director general Debt Coordination Office in an interview with Dawn.

He said it was the responsibility of the government to provide an environment, which could assist in development of private sector so that it could in turn create employment opportunities.

Dr Ashfaque, who is also the spokesman of the finance ministry, said the main responsibility of the government was to create employment opportunities by identifying areas that had maximum jobs creating potential.

If the government was able to provide macroeconomic stability the private sector, which was considered as engine of growth, would be investment of growth otherwise it would not come forward.

He said the government has thus provided the macroeconomic stability during the last four years where the policies were consistent, interest rates were low, inflation was under control and reserves were rising which in turn had stabilized the exchange rate.

This, he said, gave confidence to the private sector to consider all these factors in their investment plans and profits but if there were frequent changes in the policy, exchange rates were high and duties and tax rates were unpredictable, they would be hesitant to make long term investment.

He said these factors had provided a confidence to the investors and that was why private sector credit had increased to Rs160 billion during the first six months of the current year from Rs68 billion last year.

This had resulted into 26 per cent increase in imports, which in turn increased large scale manufacturing by 11.5 per cent and exports have gone up by 13 per cent and as a result tax collection was exceptionally well. All these factors were linked to each other and creation of a stable environment. Obviously, expansion was taking place and common sense suggests that peoplewere getting jobs.

He said the government, after a lot of discussions and thinking process, had also identified five new sectors that had great employment generation potential so that people could invest in these areas and employ maximum people there.

He said the government believed agriculture sector employed 42 per cent of Pakistan's workforce but average agriculture growth could not go beyond four per cent on a sustainable basis because of water shortages.

He said there could be no quantum jump in the agriculture produce "if we are unable to enhance total area under cultivation." For this, around Rs200 billion are being spent at present for augmentation and conservation of water resources.

He said the very fact that such a big chunk was going into the economy was a proof that a lot of people had been employed there but once these projects started coming on stream from 2006- 07, millions of acres of additional land would come under cultivation and tens of thousands of people would be employed.

He said the government estimates suggested that increase in the support price of wheat from Rs300 to Rs350 per 40 kg would yield Rs25 billion additional income to the people. Likewise, the 10 million bales of cotton would provide additional Rs43 billion to the people involved in cotton cultivation.

And resultantly a change will take place as when they are better off, they would purchase motorcycles and automotive for their business needs and manufacturing sector would further increase. This additional activity is believed to generate a lot of new job opportunities.

He said the second area, the government had identified for economic activity was the construction industry because it had a lot of employment generation potential for labourers, masons, painters, carpenters, electricians, contractors, interior decorators and engineers.

Already, he said these people were no more without work and were now bargaining for higher wages and contracts instead of waiting in rows at various chowks and running behind cars for jobs on daily basis.

He said the construction sector would have chain effect as it would generate economic activities in a number of other sectors and industries like steel, glass, cement, concrete, etc., would expand by leaps and bounds.

Thirdly, the small and medium enterprise (SME) sector had a lot of problems and was now being given due attention. He said prudential regulations for SMEs had been improved and they were no more treated at par with big businessmen while seeking loans from the commercial banks.

With the passage of time, results would start coming in. Already, the automotive production has increased from 32,000 lastyear to 62,000 this year and is expected to go up to 100,000 cars per year from next year.

He said only the vendors in the autoparts sector have obtained Rs10 billion loans from the commercial banks and they have started exports worth $45 million from this year. Obviously, with three-fold increase in auto sector's production, more people were getting jobs and those already employed had improved their condition.

The information technology and oil and gas sectors were two other areas where Pakistan was expecting a lot of foreign investment as well as new job opportunities for the educated and skilled workforce.

Dr Ashfaque said it was true that there were no manpower management departments in the country or institutional framework to register new entrants in the job market and monitor their mobility.

He said the situation of statistical data was very poor in the country and there has been no labour survey in the country since 2001-02 and this was a big challenge for the government to improve statistics and such institutions.

Unless there was reliable data, it could not be confirmed in figures as to how many people had got new jobs but if expansion was taking place, one could assume that unemployment rate was coming down slowly if not quickly.

He did not agree that export of manpower has reduced as 216,000 people have gone abroad during the current year as against a target of 200,000.

Responding to a question, Dr Ashfaque said there was a dire need to link education sector to the industry and services sector as a lot of unemployment was taking place because of out-dated curriculum and what the educated youth is being taught in the educational institutions has no applicability in the job market.

If a proper linkage is created between curricula and industry, services sector and the job market, there would be no addition of the unemployed youth any more although natural rate of unemployment always remains in place even in the most developed countries.

He also said there was a big percentage of voluntary unemployed people because of their being dissatisfied with job they normally get. But he said that a lot of expansion is taking place in the media development and a lot of educated young people were going to this sector while skilled ones are in great demand.

He said this was an area where the government was concentrating right now and Dr Ata ur Rehman and higher education commission (HEC) were making a lot of effort to improve the quality of education, importing faculty from abroad, updating syllabi and funding research sector. All this, he said, was being done in consultation with the chambers of commerce and business houses.

He agreed that quality of information was a sine qua non for the good economic policies and that was why he was repeating time and again that he could not quote a figure how much unemployment had reduced although all circumstantial evidence suggested that a lot of new people were getting jobs.

He said that current level of unemployment was a major challenge for the government and added that the gain in the macroeconomic stability should be maintained and built upon for sustained growth instead of being complacent.

He said it was a challenge for the government to create job opportunities and reduce poverty and this could only be done through a broad-based growth.

He said successive governments had been cutting down on development expenditure due to heavy debt and economic crisis which meant that it was a cut on future growth of the country and infrastructure crumbled.

He said the major challenge of the government was to stop the deceleration and then start improving which was the hardest nut to crack because it is easy to further improve a growing economy but it was difficult to improve a decelerating economy.