Finance Minister Muhammad Aurangzeb is presenting federal budget for fiscal year 2025-26 in National Assembly on June 10. Photo : x.com/NAofPakistan
ISLAMABAD:
Finance Minister Muhammad Aurangzeb reiterated on Monday that it was not the government’s job to give jobs, in a statement that came on the heels of capital flight in the absence of an enabling business environment and a high unemployment rate.
Addressing a seminar on population growth, the finance minister said “it is not the government’s job to give jobs and we have to get out of that mindset; it is the ladies and gentlemen who are freelancers today, leading our IT services, leading the IT economy”.
Soon after his speech, Institute of Business Administration (IBA) Karachi Executive Director Dr S Akbar Zaidi said, “Pakistan is in decline. Its economy is in a very, very sharp decline; talk to any economist and many in this room, most will agree that all numbers are going in the wrong direction.”
Governments all over the world provide a conducive environment to the private sector, which is missing in Pakistan and has lately been acknowledged by key policymakers.
With a Human Development Index (HDI) score of 168, “we can’t talk about a new economy, IT, computer growth with these sort of numbers,” said Zaidi.
State Bank of Pakistan (SBP) Governor Jameel Ahmad said last week that the current growth model was not able to withstand the burden of a 250 million population, while the national coordinator of the Special Investment Facilitation Council (SIFC) said that there was no growth plan.
The SIFC coordinator also acknowledged that businesspersons were the easy prey of tax authorities and local investors were investing overseas. Because of these circumstances, there are not enough jobs in Pakistan and the unemployment rate has jumped to 7.1%, the highest since 2004.
Akbar Zaidi said that even the 7.1% unemployment rate was “underreported” and Pakistan’s demographic dividend has been turned into a “demographic nightmare” with 3.5 million people entering the job market every year in search of jobs.
The finance minister did not speak about the unemployment issue. “We need to upskill the youth, reskill them; that is how we are going to go forward with respect to this,” he said.
Zaidi said that Pakistan was half a century behind where South Korea was 50 years ago. Muhammad Aurangzeb was speaking during the seminar organised by the Dawn Media Group. The finance minister underlined the need to “recognise and negotiate” population growth and climate change as two existential issues for Pakistan.
Speaking about the roadmap to a $3 trillion economy by 2047, Aurangzeb stressed that it was “clear that these two existential issues have to be recognised and negotiated if we are to realise our full potential”.
“It is irrefutable that Pakistan’s economy is not doing well, in relevant terms and in absolute terms; it is much worse than it has been over the last few years,” said Akbar Zaidi. He said that Pakistan was estimated to be the third most populous country in the world in 25 years.
Zaidi noted that unemployment had been growing for the last five to seven years. Citing economist Dr Hafeez Pasha’s data, he said the real wage of workers in Pakistan has seen a 20% decline in just last three years.
Zaidi cited Pakistan’s declining ranking in the UN Human Development Index, terming the figures “extremely worrying trends”. Pakistan stands at 168th place, one of the lowest positions on the index.
World Bank Country Director for Pakistan Dr Bolormaa Amgaabazar said that reducing stunting and learning poverty was among the areas that would be focused on under the 10-year Country Partnership Framework.
She noted that 60% of Pakistan’s population was under the age of 30 years, adding that there was a “potential” for demographic dividend, but it would remain unrealised until people were provided jobs and skills. Citing World Bank figures, she said a woman in Pakistan had 2.6 children on average, adding that it was higher than the rest of South Asia.
“If you do not bring population down, you are not gonna get growth up,” said Dr Ali Cheema, Vice Chancellor of LUMS. Dr Hanid Mukhtar, a fellow at the Consortium for Development Policy Research, pointed out that Pakistan’s GDP per capita income had been growing at 3.6% per year, but India had 71% higher GDP per capita and Bangladesh was 53% higher.
Mukhtar noted that because of the low investment, which was indirectly related to population growth, Pakistan’s “capital-labour ratio is much lower than India”.
