Pakistan Tehreek-i-Insaf’s (PTI) recently announced 100-day program, unsurprisingly, generated frenzied debate regarding the validity and practicality of the proposed steps. But the quantum of controversy and debate generated by Asad Umar’s claim of creating millions of jobs remains unmatched. Quite frankly, as an economist, I also found the claim hard to digest. His follow up article, which appeared in various leading newspapers of the country, did little to alleviate the doubts since there was nothing in the article to suggest that the PTI has come up with some new, remarkable way of generating millions of jobs. It was disappointing to read the same trite suggestions (bring down cost of business, prop up private sector, etc.) that have been discussed many times over.
This article is not devoted to assessing PTI’s plan, whose merits and demerits can be contested separately. Rather, it is devoted to the more serious topic of creating and providing jobs in an economy. Jobs and employment are a serious issue in any economy and any country, and the unemployment rate is a closely watched indicator since it could very well be the difference between winning or losing elections. In Pakistan’s context, this topic evinces unprecedented interest for many reasons. Topmost amongst these is that Pakistan’s runaway population means that millions of new, young entrants become eligible for work every year, yet jobs can be very difficult to find in an economy where booms and busts are a norm rather than an exception. With millions more youth set to enter the job market in the coming years, PTI’s plan on creating jobs was more of a publicity stunt aimed at attracting the vote of the younger generation.
But how do we create jobs? There are two ways, in general, of going about this immense socio-economic issue. One is that the government take the lead and creates jobs through enormous public expenditures, primarily in the form of infrastructure development and creating departments that would require large numbers of human capital. But this model has largely fallen out of favour due to the tendencies of considerable inefficiencies and contracting enormous future liabilities. Pakistan’s public sector (both at the federal and the provincial level), that guzzles trillions in national taxpayer money without much to show for, is a prime example. Bhutto’s disastrous experiment in nationalization under the banner of roti, kapra and makaan remains a classic example of this kind of disaster.
The second, more favoured model is that of the government acts as a facilitator in generating jobs. A recent example comes in the form of the insurance giant AIG, in the wake of the Great Recession of 2008. Facing solvency due to failure to meet its debt obligations, it was on the verge of collapse. But in stepped the US government, by offering a very low interest loan of more than $80 billion and thus helping avert a collapse. It did not send a DMG babu to take over operations, but let AIG function as on its own. Within five years, not only did AIG return the loan, but was back on its profit making ways. Result: a large organization remained intact, no jobs lost and government earned its taxpayer money back.
If Pakistan’s political parties remain uninterested in this issue, even more disappointing is the fact that Pakistani intellectual scene remains bereft of any innovative, quality discussion about this enormously important issue. A very important aspect of this debate, the role of cities in creating and sustaining jobs, mostly remains absent from intellectual discourse. It is important because cities are the engines of growth, and it is here that society, institutions, technology and ideas interact to produce jobs. Do Pakistan’s cities have the potential for creating jobs?
It is imperative that we first have a true picture of the job situation in the cities. Second, governments in Pakistan need to step away from supply-side policies (job trainings, for example) because unless these work in tandem with the demand-side aspects, there could be a disconnect between supply and demand for labour. The best illustration of this is the disconnect between industry and the academia. It is all good that government keeps expanding schools, colleges and universities, but meet any industry representative and he would immediately tell you that the kind of human capital being churned out by the Pakistani education system does not meet their job requirements. In simple words, there is a considerable gap between supply and demand. Any serious policy targeted towards job creation would need to take care of this gap.
How do you create millions of new jobs in Pakistan’s cities? Importantly, how do you do it in a manner that does not burden the national kitty or the taxpayers? The simple answer is that policymakers would need to be innovative and concentrate on developing markets based on demand analysis. I’ll state three areas to start with, all with huge demand and the potential to create millions of jobs.
The first is the demand for reducing congestion within cities. Fancy metro buses and orange trains won’t do it. Instead, policies like charged parking (which will end free parking) and bike sharing would create thousands of jobs in Pakistan’s ever-expanding cities. Besides, they would be a valuable source of revenue for provincial and federal government. The government’s only effort would come in the form enacting the right legislation towards making this proposal a reality.
Second, there is a massive demand for greener areas and lessening pollution within the cities. As temperatures keep rising due to global warming, this demand will keep surging. There is this innovative idea of vertical forestry within cities: forests that are built upon the principle of vertical expansion just like buildings. But for this to happen, government would need to do away with its medieval era zoning and building laws, and end plot and perk culture for a few chosen classes. Enact vertical expansion friendly laws, entice the private sector with chunks of lands in cities and to build forests on them. This would not only provide much needed green cover in our increasingly barren cities, but also help to generate jobs in terms of maintaining these structures. And let’s not forget the good that they would do to the environment.
The third proposal is centered on the demand for food. Given that Pakistan’s population is expanding rapidly, already overburdened cities would see its demand for food consumption sky rocket. Here, innovative concept like vertical farming would not only help meet this demand for food, but also help generate substantial numbers of jobs. Again, the government would just need to enact vertical farming friendly legislation. Does not seem something very hard to do, does it?
I’ve only proposed three measures that can not only help alleviate congestion, pollution and food demand, but also increase the revenue potential. There are hundreds of other such ideas out there. But for cities to create millions of jobs, governance as a whole would need a drastic change. This is where I found Asad Umar’s claims to be lacking in merit because it offered nothing new in terms of governance and ideas. Pakistan’s governing dispensations would have to do better than just coming up with empty rhetoric and recycled pieces of writings.
This article is not devoted to assessing PTI’s plan, whose merits and demerits can be contested separately. Rather, it is devoted to the more serious topic of creating and providing jobs in an economy. Jobs and employment are a serious issue in any economy and any country, and the unemployment rate is a closely watched indicator since it could very well be the difference between winning or losing elections. In Pakistan’s context, this topic evinces unprecedented interest for many reasons. Topmost amongst these is that Pakistan’s runaway population means that millions of new, young entrants become eligible for work every year, yet jobs can be very difficult to find in an economy where booms and busts are a norm rather than an exception. With millions more youth set to enter the job market in the coming years, PTI’s plan on creating jobs was more of a publicity stunt aimed at attracting the vote of the younger generation.
With millions more youth set to enter the job market in the coming years, PTI's plan on creating jobs was more of a publicity stunt aimed at attracting the vote of the younger generation
But how do we create jobs? There are two ways, in general, of going about this immense socio-economic issue. One is that the government take the lead and creates jobs through enormous public expenditures, primarily in the form of infrastructure development and creating departments that would require large numbers of human capital. But this model has largely fallen out of favour due to the tendencies of considerable inefficiencies and contracting enormous future liabilities. Pakistan’s public sector (both at the federal and the provincial level), that guzzles trillions in national taxpayer money without much to show for, is a prime example. Bhutto’s disastrous experiment in nationalization under the banner of roti, kapra and makaan remains a classic example of this kind of disaster.
The second, more favoured model is that of the government acts as a facilitator in generating jobs. A recent example comes in the form of the insurance giant AIG, in the wake of the Great Recession of 2008. Facing solvency due to failure to meet its debt obligations, it was on the verge of collapse. But in stepped the US government, by offering a very low interest loan of more than $80 billion and thus helping avert a collapse. It did not send a DMG babu to take over operations, but let AIG function as on its own. Within five years, not only did AIG return the loan, but was back on its profit making ways. Result: a large organization remained intact, no jobs lost and government earned its taxpayer money back.
If Pakistan’s political parties remain uninterested in this issue, even more disappointing is the fact that Pakistani intellectual scene remains bereft of any innovative, quality discussion about this enormously important issue. A very important aspect of this debate, the role of cities in creating and sustaining jobs, mostly remains absent from intellectual discourse. It is important because cities are the engines of growth, and it is here that society, institutions, technology and ideas interact to produce jobs. Do Pakistan’s cities have the potential for creating jobs?
It is imperative that we first have a true picture of the job situation in the cities. Second, governments in Pakistan need to step away from supply-side policies (job trainings, for example) because unless these work in tandem with the demand-side aspects, there could be a disconnect between supply and demand for labour. The best illustration of this is the disconnect between industry and the academia. It is all good that government keeps expanding schools, colleges and universities, but meet any industry representative and he would immediately tell you that the kind of human capital being churned out by the Pakistani education system does not meet their job requirements. In simple words, there is a considerable gap between supply and demand. Any serious policy targeted towards job creation would need to take care of this gap.
How do you create millions of new jobs in Pakistan’s cities? Importantly, how do you do it in a manner that does not burden the national kitty or the taxpayers? The simple answer is that policymakers would need to be innovative and concentrate on developing markets based on demand analysis. I’ll state three areas to start with, all with huge demand and the potential to create millions of jobs.
The first is the demand for reducing congestion within cities. Fancy metro buses and orange trains won’t do it. Instead, policies like charged parking (which will end free parking) and bike sharing would create thousands of jobs in Pakistan’s ever-expanding cities. Besides, they would be a valuable source of revenue for provincial and federal government. The government’s only effort would come in the form enacting the right legislation towards making this proposal a reality.
Second, there is a massive demand for greener areas and lessening pollution within the cities. As temperatures keep rising due to global warming, this demand will keep surging. There is this innovative idea of vertical forestry within cities: forests that are built upon the principle of vertical expansion just like buildings. But for this to happen, government would need to do away with its medieval era zoning and building laws, and end plot and perk culture for a few chosen classes. Enact vertical expansion friendly laws, entice the private sector with chunks of lands in cities and to build forests on them. This would not only provide much needed green cover in our increasingly barren cities, but also help to generate jobs in terms of maintaining these structures. And let’s not forget the good that they would do to the environment.
The third proposal is centered on the demand for food. Given that Pakistan’s population is expanding rapidly, already overburdened cities would see its demand for food consumption sky rocket. Here, innovative concept like vertical farming would not only help meet this demand for food, but also help generate substantial numbers of jobs. Again, the government would just need to enact vertical farming friendly legislation. Does not seem something very hard to do, does it?
I’ve only proposed three measures that can not only help alleviate congestion, pollution and food demand, but also increase the revenue potential. There are hundreds of other such ideas out there. But for cities to create millions of jobs, governance as a whole would need a drastic change. This is where I found Asad Umar’s claims to be lacking in merit because it offered nothing new in terms of governance and ideas. Pakistan’s governing dispensations would have to do better than just coming up with empty rhetoric and recycled pieces of writings.