Published in Dawn, February 28th, 2019

Pakistan’s economy is prone to boom-and-bust cycles; every four to five years, it finds itself mired in a balance-of-payments crisis. Exports have largely remained stagnant, and are considered to be the main reason for low foreign exchange earnings. There is a need to diversify the export base and export markets. Besides exports and remittances, the experience of other countries suggests that international tourism plays a critical role in building up foreign exchange reserves. The current contribution of tourism to Pakistan’s economy is estimated at 6.9 per cent of GDP and is expected to double in a decade. However, as the bulk of it is domestic tourism, more measures are needed to make Pakistan attractive to foreign tourists and thereby generate additional foreign exchange earnings.

Youth and women are key drivers of inclusive growth, but neither demographic is optimally employed. Young Pakistanis (15-29 years), constituting around 29pc of the population, need skills and knowledge to be useful for the economy. The government should have a national youth internship programme for them to get initial exposure and skills training required by the market. Skills training through public-private partnerships tends to have a larger impact on employment creation. A solely government-run programme is bound to fail unless outsourced and done in collaboration with the industry and business sectors.

Meanwhile, women, constituting 49pc of the population, make up a mere 24pc of the labour force. Without empowered women, we can neither achieve sustainable economic growth nor high-level human development. The majority of experts suggest that the government should introduce legislation to make it mandatory for both public and non-public organisations to maintain quotas for women in employment and other segments. Lack of mobility, moreover, is a key constraint in women’s participation in the economic and social sectors. The government should incentivise the provision of transport facilities to women and girls in both public and non-public sector organisations, besides safeguards against violence in the workplace.

 

What will it take for Pakistan

to achieve sustainable economic

growth?

 

With the highest population growth rate in South Asia (as high as 2.4pc), Pakistan will find it difficult to provide the required public services to its citizens at the current growth rate. Pakistan had an impressive family planning and health outreach programme in the 1960s and 1990s. The Lady Health Workers programme in the 1990s was instrumental in increasing the contraceptive prevalence rate from 12pc in 1990 to around 30pc in 2000. The country should revive such programmes and employ a whole-of-society approach involving men, religious and community leaders, to curb this challenging trend.

Pakistan is also the fastest urbanising country in South Asia. At the current 3pc annual growth rate, nearly half the population will live in cities by 2025. Urbanisation offers huge opportunities for economic growth. But to benefit from this trend, the government should also pay attention to the growth of second-tier cities along megacities. Rising populations strain the services and infrastructure of megacities. A diversified approach to urban development will not only spur growth, it will also help in better management of municipal services in megacities.

Pakistan is the eighth most vulnerable country to the effects of climate change. The mean annual temperature in the country has already increased by 0.5 degrees Centigrade in the last 50 years. The prime minister is championing investments in mitigation and adaptation interventions to reduce the effects of climate change. The country has also developed the National Climate Change Policy 2012. Strong institutions are needed to implement this policy. After the 18th Amendment, most actions to address climate change fall within the domain of the provinces. This requires strong coordination and collaboration across federal and provincial institutions.

And finally, the challenges related to governance bottlenecks need to be confronted head-on. E-governance, though not a panacea, has proven to improve efficiency in the provision of public services while also improving public-sector accountability and transparency.

The above is not an exhaustive list of proposals. The feedback gathered suggests that national development priorities require balancing economic, social and environmental (ie, the three pillars of the UN SDGs) aspects to produce sustainable results. These three dimensions constitute a valuable screening framework for policymaking.

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