On May 9, 2013, Prime Minister Nawaz Sharif, while concluding his election campaign, had promised the youth to give them jobs and laptops so they can progress in practical life. After becoming the PM, Sharif unveiled his initial plan for the youth, announcing six different schemes for youth worth Rs20 billion.
The six schemes include: micro interest free loans, youth skills development scheme; small business loans scheme, scheme for provision of laptops, youth training scheme, and scheme for reimbursement of fee of students from the less developed areas. The major part of the programme, which was supposed to start in late 2013, will be starting in January 2014 now.
The prime minister has directed that 50 per cent loans should be reserved for women in the micro interest free loans scheme and the procedure for acquiring loans should be made simple with the shortest possible time for release. He has also directed that youth from less developed areas, including Balochistan, Gilgit-Baltistan, and Pakistani-administered Kashmir be given priority in these schemes.
According to officials in the PM’s secretariat, the scheme for reimbursement of fee of deserving students will commence from mid-November, while loan scheme for the youth will start at the end of the current year. Also, 100,000 laptops will be distributed to youth across Pakistan from January 2014 onwards. The total declared cost of the schemes is Rs20 billion at least for now.
Dr Rashid Amjad, an economist and director of Graduate Institute of Development Studies (GIDS), says such plans have been made to eradicate the socio-economic problem of Pakistan — that is unemployment. “Unemployment is creating unrest amongst the youth. So, if we can find employment for them we can also have demographic dividend. In this connection, any initiative is important.”
Although Dr Amjad believes providing self-employment and targeting the eligible youth is a good step in principle, he suggests two things: “First, such schemes need to be well-targeted and transparent and its impact should be properly monitored. Secondly, we must understand that this direct intervention will only provide employment at a small level. For best results, the security and energy situation must be improved.”
He says the government must ensure these loans are granted on concessional rates, targeting less-developed. But can the PM’s youth schemes be seen as a long term policy?
Political economist, Dr S. Akbar Zaidi, in his 2012 research paper on youth and Pakistan, says if the state fails to harbour this increasing youth in the country and provide jobs to them, it will be mounting to pave the way for instability, possibly even anarchy.
He points out that the number of people in the young age group (15-49 years) and the total labour force are projected to nearly double by 2050, which needs a growth strategy that focuses on creating employment and have high employment elasticity.
Dr Kaiser Bengali, an eminent economist, is unsure if these schemes will contribute significantly to the economy and employment rates. “First, there was no clear mention of such allocations in the federal budget for the current fiscal year. Second, the economic impact of such schemes is zero,” he says.
He adds unemployment is not because people don’t have money but because they don’t have jobs. It’s an issue of demand and supply. “There is a serious problem in the supply line of jobs. The government is strengthening the supply side. But there is no increase in the demand side. There is no selling point for them in a situation where industry is already suffering from a crisis. We need to create a macro-economic framework. Jobs will be created through the formal industry.”
Bengali informs such schemes were started in the late 1980s but they all failed to create a positive impact, except giving moments of pleasure to the politicians — “The assumption is that these youth will do business with this amount but there are no buyers”.
In Bengali’s view, such schemes will not create any impact — “And even women amongst them will benefit less from these schemes. Besides broadening macro framework, there is a need to review the industry tax rate and bring investment in the country making the environment conducive.”
Pakistan Bureau of Statistics 2011, shows the rate of unemployment at 5.7 per cent in the country, which is more than Central Asian and Latin American countries. One out of every 10 people of the country’s population adds to the pool of the unemployed.
The unemployment rate increased from 6 to 6.5 per cent during the October-December period of 2012, according to the latest Labour Force Survey for the second quarter of 2012-13. In urban areas, the unemployment rate increased by 2per cent to 10.1per cent in the past fiscal year. While unemployment in rural areas increased to 5 per cent from 4.3 per cent, which indicated an alarming increase in the unemployment rate.