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How feasible is PTI’s employment plan?

Updated September 10, 2018

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THE Federal Cabinet on Aug 28 decided to set up a task force to suggest ways and means to create 10 million jobs as a vital part of the PTI’s over-ambitious but virtuous 90-day agenda.

Just a week later, Prime Minister Imran Khan announced that a committee headed by the federal housing and works secretary had been tasked to prepare a plan within a week for the construction of five million low-cost houses, which, he said, would promote growth and create jobs.

To achieve the target, he said, the private sector would be encouraged and all facilities will be provided to those who participate in the housing programme.

Also read: Five million homes

Elaborating on the government’s employment policy, Information Minister Fawad Chaudhry observed that “the government would not employ unnecessary help in its own departments. That is not how jobs are created; our present task is to create job opportunities where eligible people can apply.”

According to the official pronouncements/actions, the ongoing austerity drive would not affect the security of government jobs. This includes those working on contracts. When a minor Capital Administration Development Division ministry was abolished weeks ago, no redundancy was declared.

The employment target is too ambitious to be met within five years; despite the current economic growth, unemployment is increasing and social exclusion remains unaddressed

Finance Minister Asad Umar threw light on the party’s employment policy when he said that it was not excess labour, but bad management that was responsible for losses suffered by state-owned enterprises.

Under its vision of a Naya Pakistan, the government is not waiting for the economic growth to pick up to seven to eight per cent or more — necessary as the technocrats say — to take care of increasing unemployment and clear its backlog.

Instead, it is focusing on a labour-intensive sector to create jobs and spur growth. Somehow, the agenda coincides with the launch of an incentive package by the central bank to boost up construction of the low-cost housing by the public and private sectors.

However, experts with intimate knowledge in this area say even if 20pc of the low-cost housing target is achieved in five years, it would be a great accomplishment.

There are major problems like land availability and affordability; its location near the places of work; required legal framework; banking support and the enormous amount of resources needed to finance such a pioneering, gigantic project.

Similarly, the employment target is too ambitious to be met within a span of five years. Despite the current economic growth, unemployment is increasing and social exclusion remains unaddressed. As the economy is further digitalised, it would shed labour.

Another issue is taking care of redundancies, if they occur in privatisation. It can be argued that it is public and political pressure against retrenchment of “excess” labour that major state enterprises could not be restructured for privatisation over the last decade. PTI now intends to create a wealth fund to manage the bleeding units efficiently.

The PTI’s pledge to the electorate to build a ‘Naya Pakistan’ and set up an Islamic welfare state has raised the expectations of the people. While the government is embarking on challenging wide-ranging reforms, it appears to be following in the footsteps of its predecessors in focusing on a few priority sectors.

The Musharraf government prioritised banking and telecommunication sector reforms. During the PML-N government, the China-Pakistan Economic Corridor was essentially launched to upgrade infrastructure facilities and overcome energy shortages.

Such priorities earlier have yielded positive results in meeting urgent needs, but failed to address emerging inter-sectoral imbalances so created in the economy. For example, the unresolved energy shortage worsened during the Musharraf regime owing to rising electricity demand of a growing economy. If power generation has now significantly improved, the transmission system is in a bad shape.

Farming and manufacturing still suffer from loadshedding and aggravate the unemployment problem. In its manifesto, the PTI promised to declare an “emergency” to tackle agricultural problems for the uplift of the farmers.

The public sector development programme generates employment but not enough jobs. Under the 90-day reforms agenda, the government also proposes to oversee reforms in the planning department.

The role of the planning commission for carrying its mandated responsibilities has weakened over time. The repeated three-year International Monetary Fund stability programmes held in abeyance the country’s five-year plans for economic growth.

With fiscal and monetary policies on the driving seat, finance ministers called the shots in most important areas of economic activity. That earned the finance ministers the title of the Czar of the economy. The outcome was that the real economy, economic growth and job creation suffered.

The PTI also wants to minimise the influence of the finance ministry over the Federal Board of Revenue. This has put Mr Asad Umar, who is minister for finance as well as revenue, to a critical test.

The key role of technocrats should now logically be to build a ‘Naya Pakistan’ — a people-centric Islamic welfare state — as mandated by the national electorate. The conventional concept of a centralised welfare state that enhances the role of the government in the economy and the society beyond a prudent point will not work.

jawaidbokhari2016@gmail.com

Published in Dawn, The Business and Finance Weekly, September 10th, 2018