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March 17, 2020

Unrealistic commitments

Opinion

March 17, 2020

In an interview to a private television channel recently, Minister for Planning Asad Umar said that the promise to provide one crore jobs still holds true – even though none will be provided in the first two years of the government.

According to the senior PTI leader, the economic plan unleashed before the elections talked of promises over a five-year period. As such, the PTI still remains committed to one crore jobs in its five-year term. Fair enough but this does raise some fundamental questions.

With one third of the term already gone, is suggestion that 3.3 million jobs will be created every year over the next three years ? Also consider that approximately 2.5 million Pakistanis will have lost their jobs between August 2018 to July 2020. So technically the government will need to create not just 10 million jobs but 12.5 million jobs over the last three years of its term. That’s more than four million jobs per year for three consecutive years.

The re-commitment at this stage seems even more unrealistic than the original commitment of one crore jobs. When the plan was announced in July 2018, the economic conditions were far better than where we are today. The economy had been growing at reasonable growth rates closing at 5.8 percent at the end of fiscal 2018 and was projected to grow over six percent in fiscal year 2019. In spite of the healthy state of economy then and the projected growth in the following year, it still did not make any sense to promise one crore jobs over the following 5 years.

However, with the PTI taking over, the economic conditions started to deteriorate with the growth rate plummeting from 5.8 percent to around three percent – rather than going up over six percent as was projected. This year, the growth rate is expected to go down further to around 2.4 percent. With plummeting growth rates, we could only expect massive job cuts; which has been the case so far.

If we are to accept that the government’s commitments need to be assessed over the five-year period, we would then assume that they are also committed in providing 50 lakh housing units. Again with one third of the term already gone, we would assume that in the remaining 41 months, 50 lakh units will be built – assuming the process starts immediately. That’s obviously not possible considering there is no concrete infrastructure, no financing model yet, no legal framework and not even the team to support the gigantic task.

Let’s assume the entire framework is ready in the next six months (almost an impossibility). That will leave around 35 months in which to construct five million housing units. This comes to around 150,000 housing units every single month. Not even a diehard PTI supporter can bet on such a figure. It will be incredible even if the government is able to construct one lakh housing units by the end of its tenure.

Does the government even understand the magnitude of the task ahead? Is the comprehension of the economic challenges properly understood? Preparing an unrealistic economic plan was bad enough but recommitting the delivery after 19 months of dismal performance is even worse.

And this brings us to the main concern about the government. They need to understand that employment opportunities are created as a result of sustained economic activity. And sustained economic activity is a consequence of significant investment and a positive economic environment – both factors missing since August 2018.

Also, economic growth has to far exceed the population growth rate to ensure additional job opportunities. With the kind of population growth in Pakistan, the economy must grow in excess of six percent in order to create approximately 15 lakh or more jobs per annum. That kind of economic growth is not happening in the next two fiscal years. In fact the projections remain abysmally poor with growth projected around three percent. Rather than the employment opportunities, such dismal economic growths would possibly end up with far more job losses as has been the case over the last 19 months.

Contrary to reality, the PM has been made to believe that 2020 will be the year of economic growth that will enable job creation on a large scale. Accordingly, the PM has been going around the country and sharing his thoughts. Like the economic promises that he was made to commit to before the elections, this time around as well, he will be made to regret the commitments and then the famous U-turns. But this will be far more embarrassing than the pre-election promises. Not that there is any justification for not keeping the pre-election promises but having learnt the limitations during the last 19 months, it is no good to make false promises at this stage.

It’s not just about one crore jobs and 50 lakh housing units. There were promises in every sector – education, health, dams, public transport, agriculture, industry, services, public sector enterprises, railways, FBR, power distribution companies and several others. We have seen no progress in any of the above sectors and it seems the government has already given up within the first 19 months.

The above sectors are important but none compared to the promise to provide one crore jobs and building 50 lakh housing units. The PTI won the elections on such slogans but in the process betrayed the trust reposed by the people of Pakistan. As a minimum, it must stop re-committing the promise to provide one crore jobs and 50 lakh houses.

The writer is former governor Sindh and former minister for privatisation.