By Ajmal Khan Yousafzai
ISLAMABAD: Pakistan’s economic growth trajectory remains on a gradual declining path with an average growth between 3-4% over the past thirty years or so.
This means that the structure of Pakistan’s economy has not changed to catch up with other emerging economies through enhanced productivity and competitiveness.
Past two years have been particularly difficult when growth rapidly declined and Pakistan had to go to IMF, China and other countries for a financial bailout to deal with its unsustainable current account deficit.
The efforts of the government must be appreciated on stablisation front where twin deficits have been brought down through financial discipline.
Looking ahead, the growth projections remain below 2% in the next two years – way lower than many Asian economies.
A slow economic period coupled with political instability may pose serious challenges in terms of country’s strategic geo-political positioning, sustaining the pace of CPEC implementation and more importantly creating opportunities for the young population entering the job market.
The biggest challenge for the government is to minimize the risk of job losses due to economic slowdown and the aftermath of COVID-19 lockdowns. Unfortunately, the second wave of pandemic has started hitting the economy again.
According to a research conducted by Pakistan Institute of Development Economics (PIDE), almost 18 million people are expected to lose their jobs in Pakistan due to COVID-19 pandemic.
The major vulnerable sectors are agriculture and services sector where more than half of these jobs are at stake. Daily wage and contract employees are among the most vulnerable to lose their livelihood.
Although there is huge focus on revival of construction sector for job creation, construction is the least affected sector in terms of potential job losses.
Similarly, the impact of job losses in large scale manufacturing and transport sectors is much lower when compared with agriculture and retail sectors.
Insofar as CPEC implementation is concerned, it is time to divert efforts from infrastructure development to value added agriculture sector investments for not only protecting the vulnerable labour force but to look at productivity enhancement through use of emerging technologies.
