World Bank asks for quicker reform, women employment

Country director says power reforms are only half done

ISLAMABAD: Pakistan must speed up reform of the energy sector and bring more women into the labour force if it wants to quicken economic growth that lags behind regional peers, the World Bank country representative said on Monday.

The World Bank expects Pakistan’s economy to expand by 4.5% in 2016, missing the government’s 5.5% target and trailing behind other South Asian nations where growth is expected to average about 7% this year.

The bank sees 2017 growth edging up to 4.8% in Pakistan. However, experts say the economy needs to expand by at least 6% a year to absorb new entrants to the workforce.

World Bank Country Director Illango Patchamuthu said Pakistan had benefited from a collapse in global oil prices and tough fiscal measures taken by the government over the past few years to stabilise the economy.

But he urged faster reform in the energy sector, which has suffered decades of under-investment. Businesses say frequent power outages hurt growth and investment.

“To me, the whole story around power reforms is still only half done,” Patchamuthu told Reuters in an interview.

He said Pakistan must tackle circular debt, which stems from unpaid subsidies. It stands at about $3 billion.

The government expects its electricity rationing system to end by 2018 after it signed more than $30 billion in energy generation projects as part of the $46 billion China-Pakistan Economic Corridor. But efforts to privatise a host of electricity distribution companies have stalled.

Patchamuthu said the government had been focused on power generation, but it must also seek to improve distribution and upgrade ancient transmission systems.

“A lot more needs to be done in the next several years to build up the whole power infrastructure,” he said.

Patchamuthu said another way for Pakistan to significantly boost growth is reforming its male-dominated labour market, where women account for only 22% of the workforce.

“If Pakistan wants to get to 7-8% (growth) with structural reforms, they also have to draw women into the labour force,” he said.

“There are social and cultural challenges,” Patchamuthu said. “But if the women are skilled and they are given the right opportunities, the economy is only going to bloom and blossom.”

Published in The Express Tribune, May 10^th, 2016.

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