PESHAWAR, April 19: The NWFP government aims to reduce unemployment by attaining high economic growth infused with heavy investment both by the public and private sectors, officials say. Under its medium-term fiscal framework (MTFF), part of an under-preparation study being carried out by the World Bank to derive NWFP’s gross domestic product, the province is likely to attain high growth rate during a period between 2003-04 and 2009-10. This would eventually lead to an increase in total employment in the province.
“This growth would require large infusion of both public and private capital, a climate conducive for business and investment, and good fiscal management to ensure that the fruits of economic growth result in a sustainable development process,” contains a draft of the under-preparation study.
The provincial GDP, according to preliminary results of the study, grew at an average annual rate of 4.1 per cent during financial years 1990-91 to 2002-03. The study underlines needs for investment as well as projecting baseline figures of investment and economic growth to maintain a six per cent GDP rate during the financial years 2004-05 to 2009-10. It says that to ensure a six per cent growth, the total investment should be around 20 per cent of the provincial GDP during this period.
“The bulk of the investment would have to be generated by the private sector, while there would be a need for sizable public sector investment — both form the provincial Annual Development Programme (ADP) as well as federal government’s Public Sector Development Programme (PSDP),” the study points out.
“The ADP needs to grow (in terms of GDP) from 1.9 per cent in 2004-05 to 2.4 per cent by the financial year 2009-10. In terms of rupees, the ADP should double in about five year’s time as compared to the actual utilized ADP of 2003-04, i.e. Rs10.1 billion,” underlines the study.
The provincial GDP has been projected to grow at six per cent in 2004-05, 6.5 per cent in 2005-06, seven per cent in 2006-07, seven per cent in 2007-08 and 7.5 per cent for each of 2008-09 and 2009-10.
However, the province would need an investment between 21 and 25 per cent of the GDP. The private sector would have to generate an investment close to 17-20 per cent during this period.
“This means the province would need to record a development expenditure of Rs20 billion by the financial year 2006-07,” official circles told Dawn.
The ADP should increase to three times the current level — to Rs30-31 billion by the financial year 2009-10,” the study observes.
In accordance with the baseline scenario for maintaining the growth rate of six per cent, the study projects private sector investment from 14.5 per cent in 2003-04 to 15.6 per cent in the financial year 2009-10, and the public sector investment to grow from 3.6 per cent in 2003-04 to 4.2 per cent in 2009-10.
Under the baseline proposition, total employment is expected to grow at an annual rate of 3.3pc, leading to a ‘steady decline’ in the currently high level of unemployment of 13pc.
“The province would be able to achieve its goal of close to zero unemployment rates (of five per cent unemployment rate) by the financial year 2010-11,” contains the official document.
The higher growth scenario would make a bigger impact in reducing the unemployment in the province, with an expected decline from 13.2pc to the current national average unemployment rates of 8.6pc by the financial year 2007-08.