Former SBP governor says govt should address unemployment. PHOTO: FILE
“Pakistan’s economy is facing a multitude of problems of which unemployment is the greatest as two million youth demand employment every year but only 900,000 managing to get jobs,” said Shahid Hafiz Kardar, a former governor of State Bank of Pakistan, on Sunday.
He was addressing a seminar on economic policies of the government at TECH Society Club.
Kardar said the economy should grow between three and eight per cent annually to be able to employ the youth joining the workforce.
He said to ensure 8 per cent growth, investment rate should remain at 30 per cent. He said currently, the investment rate was around 19 per cent.
Kardar said, “Basic economic problems need to be addressed first. The government should be looking at symptoms carefully before going for the cure.”
He said economic issues should prioritised. He said taking up several challenges at the same time stretched the country’s financial resources to their limit.
“If we want to progress like China and India, where investment has reached 38 per cent, we should bring our national savings up to 15 percent,” he said.
Kardar said, “It will be further difficult for us to enjoy foreign aid after departure of American forces from this region later this year.”
He said after paying external debts and meeting defence expenditure, costs of the state exceeded the available financial resources.
Kardar said, “It is astonishing that there are 400,000 industrial electricity connections in Pakistan but only 46,800 are paying taxes to the government.”
Pointing out reasons behind the improvement in stock exchange shares, Kardar said “It is due to large scale investment by small local investors who showed growing trust in the current government,” he said.
He said the government should set realistic targets to provide jobs to 50 million youth of the country in the years to come.
“Investments should be made in a city where revenue collection is high,” Kardar added.
Qayyum Nizami, former minister of state, and TECH society members Abdul Majeed Khan, Muhammad Sadiq, and Jameel Gishkori also spoke.
Muhammad Sadiq said, “The government needs to reset its priorities to provide basic amenities of life to citizens, like safe drinking water, health facilities, employment and sewerage systems.”
Qayyum Nizami said, “Pakistan has become a security state instead of a welfare state.
Agriculture and industrialization should be the bases of our economy but unfortunately agriculture contributes just 3 per cent.”
Nizami said income disparities were growing.
He quoted the former State Bank of Pakistan governor Ishrat Hussain who formal economy was going down while informal economy was escalating rapidly in the country.
Nizami also gave a reference of the FBR according to which 4 million people should give taxes whereas only 100 companies were paying 80 per cent of total tax collections in Pakistan.
Published in The Express Tribune, March 17th, 2014.
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