Imran Khan has tipped Asad Umar to be next Finance Minister. He definitely has the exposure to see what needs to be done to achieve the 10 million jobs target of PTI.
Pakistan, with a 45% current account deficit, 10% unemployment in the 15-24 age bracket, 70% debt to GDP and 2 million youths entering the job market every year, simple measures not cut it. My two cents on employment creation are as follows:
Just facilitate genuine entrepreneurs by easy financing, free movement of capital, simple taxation and the government taking up the risk. No amount of bailouts would make a lousy business man productive overnight – don’t protect anyone.
Then get rid of the white elephants and non-productive sacred cows in the government. The government’s job is only law & order, education and health. Just focus on that and let the real businessmen handle our Achilles heels like PIA, Pak Steel, Heavy complexes. These mammoths and their bureaucracy cannot be suckled anymore. Swallow the bitter pill – sell them off – people will thank you for that. Even one factory sold off inside a complex would have a ripple effect on productivity all around – by association.
Pakistan exports in Information & Communication Technology are stagnant at $ 2 Billion. This is because all the young kids that make a killing on line in Freelance jobs don’t record their earnings. There is a world out there for any educated kid with a broad band connection and a laptop to make money. With 70% broadband penetration, all the government has to do is to pay for the broadband and laptop and the person is ready to make his own money. The cost would not be more than Rs 10,000 per person.
Agriculture employs about 50 percent of the labor in Pakistan and it runs on water. Local small dams can help cultivate barren lands, just like our larger neighbor has done. One bulldozer costs Rs 10,000 per hour. A 10 hour work would be sufficient to build dykes and dams on perennial streams for cultivation purposes. Total expenditure is Rs 100,000 per acre. One deep well would cost Rs 1.5 million, but the returns would be several times over.
Encourage entrepreneurs to invest in establishing schools and hospitals as we just can’t have enough of them. Give them tax holidays, easy land acquisition in rural areas and risk protection. This can only help increase the mental functions of the population and also boost job creation. These businesses are bound to be successful as the demand for them is huge.
Due to improved law and order and roads, domestic tourism has witnessed a 100 % increase this year. This long neglected sector has just picked up steam and there is no stopping exponential growth in this sector. Foreign tourists coming in would be a bonus, but domestic tourists compensate pretty well despite their absence. So, the goras can stick to India if they like, while we have good domestic tourist numbers. A good tourist guide can make Rs 400,000 in six months of the tourist season. This money can last him the rest of the year. Just remember, good law & order in not a road block every 100 yards – that’s a nuisance.
Construction and Retail sector go hand in hand. One quality mall employs people in the thousands, not to mention the allied industries supporting it. Pakistan’s import bill is already $ 67 Billion so there is no need to reduce it any further. As far as the construction and real estate is concerned, once the government digitizes land records, the real potential of this sector would be unleashed. Pakistani IT firms have the experience in digitizing land records. It can be done in the first year of government.
If the PPP government can reach $ 25 billion exports by improving exporter liquidity, so can you. Focus on the Special Economic zones for that.
Whatever you do, keep spending on roads, bridges, pipelines, power plants, dams and industrial estates. Even the last 20% of revenues, after debt servicing and defense has to be spent on this infrastructure. It will not only create jobs but would help give competitive advantage to your products.
Mr. Asad Umar, creating jobs is just the knack to remove roadblocks from enterprising people. It has nothing to do with bureaucracy and 5 year plans.