Ayesha Saba

Achieving economic diversification for employment generation in Pakistan requires a comprehensive and sustained effort, involving strategic planning, policy reforms, investments in education and infrastructure, and a supportive environment for businesses and entrepreneurs. This was stated by Zafar-ul-Hassan, Joint Chief Economist, Ministry of Planning, Development and Special Initiatives. Talking to WealthPK, he said that economic diversification was crucial for promoting job-led growth in Pakistan. “It holds the key to addressing Pakistan's pressing issue of unemployment.” He said Pakistan had historically relied on a few key sectors, such as agriculture and textiles, for its economic growth. “While these sectors have contributed significantly to the economy, but they are insufficient to accommodate the country's burgeoning youth population and economic challenges.

Emerging sectors like technology, renewable energy, and services have the potential to generate substantial employment opportunities,” he said. Zafar-ul-Hassan said Pakistan should establish a system for continuous monitoring and evaluation of the growth and employment impact of emerging sectors to allow for timely adjustments to policies and strategies to maximise their effectiveness. The economist further said that the Planning Commission had launched Pakistan Innovation Fund, aiming to support and promote innovation-driven entrepreneurship in the country. He said Rs10 billion had been allocated for the fund. “By focusing on innovation, the government is encouraging young people to think creatively, develop new ideas, and create employment opportunities for themselves and others,” he stated.

He noted that the young population could improve the country's industrial productivity, competitiveness, exports as well as greatly increase the inflows of overseas remittances if the trained and skilled people participated in domestic and international skilled labour markets. Under PSDP 2022-23, the planning ministry had allocated Rs3.2 billion to support youth development programmes. These projects were aimed at producing a competent skilled workforce on a par with international standards in various sectors of the economy, including construction, hospitality, services and energy, as well as emerging sectors like IT, blockchains, amazon and high-tech/high-end trades. Meanwhile, Dr Zahid Asghar, Director of School of Economics, Quaid-i-Azam University, told WealthPK that when an economy diversified, it fostered innovation and competition, pushing industries to adopt modern technologies and practices.

“This not only boosts productivity but also leads to higher wages, improved living standards, and economic growth.” He stated that Pakistan should actively explore and tap into new markets and industries as a strategic imperative. “By diversifying its export base and expanding its outreach, Pakistan can significantly reduce the trade deficit and bolster its foreign exchange reserves. This should be pursued with vigor as it carries a ripple effect that positively impacts the broader economy.” Pakistan will continue to face an 8% unemployment rate in the ongoing fiscal year 2023-24, according to the IMF projections, which is higher than the unemployment rate of 6.2% in FY22.

Credit: INP-WealthPk