The first success we have achieved after presenting the PTI’s 100-day plan is that for the first time in the country’s history a debate has started about job creation.
We have been successful in our attempt to make jobs a centre-piece of economic conversation in the country. In this article, I will try and explain where the 10 million target comes from, why it’s important and how we plan to achieve it.
First of all, let’s start with why 10 million jobs in five years is our target. According to estimates by economists, approximately two million additional youth are looking for employment opportunities every year. Hence, it is estimated that in the next five years 10 million youth will be entering the job market and looking for employment opportunities.
Now let’s look at what the role of the state is supposed to be in creating these job opportunities. Article 38 of the Constitution states that the “state shall provide for all citizens, within the available resources of the country, facilities for work and adequate livelihood.” Hence, it is our constitutional responsibility to do our best to create job opportunities for the 10 million youth about to enter the job market in the next five years. Those arguing against setting this target of 10 million jobs are therefore saying that we should plan for an increased unemployment. Which civilised country plans to increase unemployment?
In addition to the constitutional obligation, the young population of Pakistan can become its biggest asset and creator of economic value given the right skills and education and merit-based productive employment opportunities. On the other hand, if we don’t do that, this youth dividend can also become our biggest challenge with horrendous economic and social consequences. There should be no debate about whether we need to target creation of these 10 million jobs. The only debate should be about how best to achieve this aim.
Now that I have explained the why, let’s talk about who will create these jobs. The primary engine of growth and job creation is the private sector of any country. Hence, the vast majority of these jobs will be created in the private sector through facilitative policy of the government which encourages them to expand their business and make investments which create jobs. Currently, the private sector is over-regulated and overtaxed and most importantly not treated as an equal stakeholder in economic decision-making. We have to realise that the government’s role is to create a business and investor friendly environment and make investment in supportive human and physical capital.
Now let’s come to how these jobs will be created. The first step of engaging and incentivising the private sector has already been explained. The second key ingredient is to target sectors for prioritisation which are job intensive and consistent with the Pakistani economy’s comparative advantage. Evidence based research shows that sectors of the economy that have the most potential to create new jobs are manufacturing (SMEs), construction, tourism and social services (education, health).
This research is based on the International Labour Organisation’s report titled World Employment and Social Outlook 2015. The recommendations of the PTI policy are also aligned to the recommendations of the Pakistan Business Council 2018 report titled ‘Made in Pakistan’.
Some of the key ingredients of the policies which incentivise the investment in these sectors and creation of the desired jobs will be:
1) Reducing input costs by reducing the tax burden on key inputs like energy
2) Providing tax incentives for new investments in key sectors
3) Addressing the access to finance issues of the priority sectors
4) Resolving the liquidity problems of business by ending the practice of withholding refunds/rebates to hide the fiscal deficit
5) Heavy investment in skills training and technical education universities by engaging world class institutions as partners
6) Giving the private sector a seat at the decision-making table as members of the business council to be chaired personally by the prime minister
7) Marketing Pakistan as an investment and tourism destination and a preferred trade partner with a focused campaign to be run in a public-private partnership
8) Reaching out to overseas Pakistanis in particular to utilise their knowledge and expertise as well as investment capital to play a pivotal role in the economic turnaround of Pakistan
9) Making the social sector a priority for government investments particularly health and education
10) Utilising the full potential of the green economy not just to safeguard our environment but to create meaningful employment and investment opportunities
Detailed policies for these actions and the priority sector are being developed. Textile policy as an example has already been issued. Others will follow in the coming weeks.
We as a nation owe our future generation an opportunity to earn a respectable livelihood and become productive partner in creating a prosperous Pakistan. Let’s take the constitutional obligation placed upon us as not mere rhetoric but an objective worth striving for. When the Pakistani nation sets its mind to achieve something and strive for it in a united manner, it can achieve what may look to be difficult or even impossible. Like we did by becoming a nuclear power despite opposition of the global powers. I invite all Pakistanis to guide us on how best to achieve this objective to provide honourable livelihood to all our citizens and put Pakistan on a path of sustainable prosperity. After all, this nation belongs to its more than 200 million citizens and not just a few families.
Published in The Express Tribune, May 27th, 2018.