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High GDP growth to create jobs for Pakistan: WB
Publication Date : 26-09-2013
Pakistan has to create around 1.5 million jobs a year until 2018 to keep unemployment at constant level, says a World Bank report.
Unlike the Prime Minister Nawaz Sharif’s recent recipe of creating jobs through cash support to the country’s youths, the report points out achievement of seven per cent economic growth to accommodate the rising youths in job market.
The growth can only be ensured through comprehensive big-bang reforms, says the bank report, which came at a time when Mr Sharif announced a 20 billion Pakistani rupees (US$187.8 million) package to launch various projects for the unemployed through affordable education, soft loans and skill-based training.
Contrary to the government policy, the World Bank approach for job creations evolves around three pillars sound macro fundamentals, solid microeconomic reforms and customised policies for job creations.
The report titled “Pakistan: Finding the Path to Job-Enhancing Growth” listed policy issues for the first 180 days (short-term) and mid-term policy measures up to the end of fiscal year 2018, when the tenure of the current government will end.
At the outset, the report suggests focus on governance issues, subsidies and gas supplies in short term followed by energy sector reform in long term to reduce average power load-shedding level to four hours a day or less.
The report says that to achieve sustainable fiscal deficit of 4 per cent of the GDP, government will have to eliminate key tax exemptions, zero rates, increase fuel taxes and special excise taxes on cigarettes and luxury items, expand sales tax to more services, stop public procurement of agriculture products and focus on development spending.
To encourage external financing, effective implementation of two to three years agreed programme of growth-oriented structural reforms, and considers placing bonds in sovereign markets if country risk reaches low levels.
The report suggests ending the armed conflict in the country, adopting measures to minimise political risk and attract foreign investment and improving government services in the country’s conflict-prone border areas.
To address structural constraints, the report suggested improving access to finance especially by small and medium-sized enterprises, diversify export base and remove anti-export bias, restructure the Federal Board of Revenue and carry out extensive civil service reforms.