The country’s rate of unemployment will not slip below the level it was in 2013 at the current pace of economic growth, admitted Minister for Planning and Development Ahsan Iqbal on Monday, apparently distancing himself from the finance ministry that claimed the jobless rate had lowered.
Iqbal’s comments were in line with his ministry’s projections in the National Economic Council meeting held on June 1. It was highlighted that in just the last two years, the jobless rate has gone up from 6.2% to 8.3% – the highest in 13 years.
Iqbal was responding to a question about poverty and unemployment while addressing a press conference. “In the last seven years, real economic growth stood at only 1% and until we take the growth rate to 7%, the rate of unemployment cannot be reduced to the level in 2012-13,” said Iqbal.
Iqbal said hundreds of thousands of new jobs are needed each year in order to bring down the rate of unemployment. He said it would take another three years to achieve 7% economic growth rate.
Unlike the planning ministry that projected 1.5 million people were added to the pool of unemployed in the last two years, the Ministry of Finance claimed in the latest Economy Survey that the rate of unemployment reduced to 6% in 2013-14 — from 6.2% in 2012-13. It did not give a number for fiscal year 2014-15.
Contrary to the finance ministry’s claim, the planning ministry put the jobless rate at 7.3% for the last fiscal year 2013-14.
The budgetary documents of both key economic ministries also differ. The Annual Plan 2014-15, which is published by the planning ministry, states that “as prevailing employment elasticity is 0.46, 5% to 6% growth would be required to absorb the growing labour force and to maintain the unemployment level of 6.2% of 2012-13”.
It adds that based on population growth of 2% and increase in labour force participation, the labour force would grow approximately 2.6%, indicating approximately 1.7 million new jobs would be demanded in 2015-16.
To a question over the Ministry of Finance’s growing influence on the planning ministry, Iqbal said that both were interlinked, adding that his ministry was heavily dependent on the former for allocation of funds.
Both ministries also differed over medium-term growth projections. The planning ministry projected 6.5% growth rate for 2016-17, 0.5% higher than the one given by the finance ministry. Similarly, its growth rate projection for 2017-18 was also half a percentage point up — at 7.5%.
Iqbal insisted that there was no difference of opinion between the two ministries. However, he hastily added that the planning ministry’s focus was on growth therefore, it was projecting slightly higher growth.
The planning minister said that fiscal year 2015-16’s Public Sector Development Programme was focused on priority areas aimed at enhancing economic growth rate to 5.5%. He said peace and infrastructure development were the pre-requisites for growth and substantial allocations are made in the budget for attaining these goals.
The government has allocated Rs100 billion in the new PSDP for Temporarily Displaced Persons and security enhancement. In the energy sector, Iqbal said allocations were made for power generation and transmission projects. An amount of Rs45 billion has also been allocated for two, 2,400-megawatt LNG projects, which will be completed within two years.
For Diamer-Bhasha dam, Rs21 billion are allocated while for the first stage of Dasu Hydro Power project, Rs54 billion are earmarked.
Published in The Express Tribune, June 9th, 2015.
Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ