Elections are round the corner. And as usual, political parties are seen making tall promises. One such vow is the number of jobs they will create if voted into power. First, the PTI promised to create ten million jobs if it is elected at the center. Then, the PPP jumped in, with former president Zardari announcing one state job per household if the party is successful at the polls. If that promise is meant for all of Pakistan and not just Sindh, then the PPP is promising to provide 30 million+ jobs over five years.
Promises made are seldom kept in Pakistani politics. The one relating to massive job-creation is especially vulnerable to a rude reality check. Estimates vary, but between four to five million Pakistanis are attaining working age every year. The formal sector, which a federal government tries to influence through its policies for better economic outcomes, doesn’t seem capable to create millions of jobs.
The political parties in question haven’t exactly spelled out how they will create the promised jobs. Critics are right to question the PTI’s track-record in Khyber Pakhtunkhwa on the issue of job creation. But to the PTI’s credit, it is banking on economic growth – specifically through higher activities in sectors like housing and tourism – to create additional jobs. Following this approach, the party may still fall short of the ambitious target, but a market-based approach is better suited for job-creation. Au contraire, the PPP is not really into cooking the pie. Instead, it is offering a government job to each household. Meanwhile, Khadim-e-Aala, who has previously been mocked for giving ambitious timeframes to end load-shedding, is not playing the numbers’ game this time. But critics should take the PPP seriously, for it quickly followed through on its 2008 election promise of a social safety net via the BISP.
While the BISP has become better targeted over time, the political sinecures that are government jobs are a huge burden on the state’s finances and do little to improve the effectiveness of governance. Already, thousands of political appointees are serving in some of the most financially-unviable public sector enterprises (PSEs). Another round of wholesale public hiring will worsen the status quo, when the need is to restructure and/or privatize PSEs based on their respective operating and financial conditions.
Given the state of public finances, it is the private sector that has to be the engine of growth. Whosoever forms the next government will have to work tirelessly to improve business environment in the country. In terms of making it easier to do business here, policy work is cut out for the incoming government in areas like strengthening of economic, judicial, and accountability institutions, improving connectivity infrastructure, and offering investors a regionally-competitive investment policy framework.
Also, the need is to broaden the scope of economic activities beyond the conventional sectors. Digital economy – which includes e-commerce and on-demand services – must be supported to boost retail economy as well as entrepreneurship. Since urbanization and job-creation go hand in hand, new cities should be built, thus helping create new labor and services markets. Development of economic corridors can also help provide jobs to folks living in distant areas along which the transport nodes pass.
Lastly, but perhaps most critical, an export-oriented focus is required to ensure that macroeconomic imbalances do not return midway through a growth cycle and disturb the economic momentum. Sustained job-creation, which is required to absorb the many millions entering the workforce every year, depends on high GDP growth (over 7% p.a.) for at least a decade and significant investments in human capital.
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