LAHORE: The economic recovery mirage has frustrated the general public as they are unable to pick up the light our economic managers are seeing at the end of the tunnel. To add injury to the insult, a sharp spike in food prices has started stabbing people amid soaring joblessness.
The oft repeated mantra that stabilisation has been achieved and economy is on a growth path sounds hollow as the productivity is still going down. Car sales saw a 56 percent decline in October and given the circumstances carmakers are cutting down production to single shifts. It means that large scale manufacturing after a steep fall in first quarter of this fiscal year would further decline.
The claim that inflation would start receding in the 2nd quarter of this fiscal has proved wrong as it is still in double digits, clocking 11.1 percent last month.
The remittances have also posted a fall of around 1.5 percent in the first four months of this fiscal although the government expected an increase. The surge in exports is mainly due to higher export of rice and regular increase in cement exports. With less than $100 million in proceeds, the five subsidised exporting sectors have not contributed much to the exports in the first quarter of this fiscal. And we are trumpeting that a turnaround in exports is on the cards.
The economic recovery even after availability of huge foreign funds has remained dismal. There has been no upgrading of infrastructure. No efforts were made to strengthen our human capital, while businessmen left much to be desired at corporate social responsibility front. Sustained economic growth would remain a dream if the government and the private sector failed to rise above petty self-interests. The government has no other option but to improve its governance while the private sector would have to act more responsibly by paying its due taxes and focusing on the welfare of their workforce.
Pakistan never achieved the growth momentum it deserves because of the unavailability of the skilled hands, which is a drawback that still plagues country. Any economic recovery that ever happened has been short-lived due to skill gaps. The government and the private sector would have to join hands to improve skills of the workers according to the market demand. Establishing vocational training institutes is the job of the government.
The private sector as a part of its corporate social responsibility should facilitate these institutes for imparting practical training to the students at their manufacturing facilities. Unfortunately very few manufacturers volunteer to allow the use of their manufacturing facilities for training purposes. Most fear that the trained workers when employed by less efficient competitors would improve their productivity and increase competition in the market.
The entrepreneurial culture has not developed in Pakistan in the real sense. The availability of highly skilled labour force alone does not maximise efficiency. Other factors like workers welfare, hazard-free working conditions, medical care, and subsidised food are essential to attain world-class efficiency. Industries that shy away from providing training facilities to government institutes are also not enthusiastic in fulfilling their other corporate social responsibilities.
It is unfortunate that the governance level has not improved in the country in the last three decades. The government would also have to raise its governance level to ensure that the infrastructure projects are completed timely and according to the specification. The projects completed through dubious bidding remain substandard and inferior infrastructures add to the cost of doing business.
The situation is not encouraging. A constant decline in productivity means the entire manufacturing sector is operating at much below the installed capacities in all sectors. When the economy stabilises in a real sense even then there would be a pressure on jobs. The existing industries would not be investing much in upgrading their technologies. Their first priority would be to restart their idle capacities. That would take some time. The waiting time for the jobless and poor is very long. Entrepreneurs would wait for some time before going for expansion. They have experienced many ups and downs with the change of each government. They would invest when there is some political stability in the country.
The foreign inflows are high interest loans that have not been consumed prudently on sustainable income generating projects like hydro power generation, health and education. Pakistan might not get another chance to put its economy back on track if the foreign inflows are not used transparently in enhancing productivity.