Almost all developing economies including Pakistan have earnest quest for high growth rate for achieving all sustainable developmental goals (SDGs), which focus on improving quality of life on the globe as a whole, but unfortunately majority of the nations have ignored the very essence of growth strategy promising desired results. All initiatives meant for fast economic growth must not overlook quality aspect leading to social outcomes to happen. All policies in this regard apart from giving intrinsic nature of growth must have social dimension also.
Economic growth must result in eradicating poverty by creating quality human capital leading to generating decent jobs, enhancing living standards and reducing economic inequalities.
One of the IMFs finding regarding economic growth pattern in developing countries identifies factors like quality of bureaucracy, social spending and foreign direct investment, quantum of private credit, government stability and stability of inflation, which determines the extent of social outcome like improvement in education and health care status of a country, responsible for developing an efficient and effective work force needed for sustained improvement in level of employment and reducing income inequalities.
Developing nations need to have stable and diversified strategies for accelerating economic growth rate leading to curbing poverty. Unstable growth pattern further worsen poverty status in the time of crisis and poor find it very difficult to regain lost economic status despite economic recovery of country concerned. Therefore it is essential that all growth strategies must have diverse dimensions. In this regard export oriented growth pattern enables countries to have fast and quality enhanced productivity growth through use of latest technology, skill development initiatives, capture of bigger share of world markets and creating enabling environment for foreign direct investment.
Pakistan despite terrorism threats within the country and on borders, increasing trade deficit, and reluctance on the part of super powers to extend much needed funding to combat terrorism and to rectify fiscal deficit has envisaged GDP growth rate of 6% for the fiscal year ending 30th June 2018. This ambitious target is based on positive movement in all macro economic indicators and easing up of energy crisis of the country. Further improvement in expected level of employment, fast growth of large scale industrial sector and expected improvement of contribution from agriculture sector due to improvement of roads and other means of transport and sustainable water management through construction of dams included in the infrastructure development segment of China-Pakistan Economic Corridor (CPEC) program ensure success for the envisaged target.
However, despite satisfactory growth of large scale industries sector volume of exports has not increased significantly. It is due to stagnant status of agriculture and agro-based industries, which until close of last decade had sizeable share in total exportable goods. On the other hand substantially increased imports volume combined with increasing oil prices and persistent decrease in value of rupee in terms of all acceptable global currencies has worsened balance of payment position despite consistent increase in home remittances from migrant workers. Thus for Pakistan strong, stable and diversified and export oriented growth is necessary to reduce poverty and income inequalities. However according to findings of various research studies conducted by World Bank and IMF the above said expected social outcomes happen when a sustained economic growth is achieved over a long time ranging from 30 to 40 years.
These research studies have quoted countries like China and Malaysia from South East Asia who have been successful in attaining sustained high growth rate in the long run, but still they are lacking in developing social safety nets of desired level. In fact whatever social advances have been achieved in the region is due to shift towards market economy. Strong export oriented growth has brought sustained productivity gain through use of advanced technology and innovative strategies.
In this regard policy makers in all nations striving for fast growth rate need to monitor growth pattern ensuring sustained social outcomes to happen.
In Pakistan compulsion for corporate sector to allocate 5% of their earnings under social responsibility requirements for providing social safety nets to deprived class of their employees as well as general impoverished population has resulted in promoting quality education, health care facilities and sports activity by sponsoring national and international matches of cricket, hockey and other games. However keeping in view level of poverty in the country this is a meager contribution from corporate sector.
No doubt civil society and non government organisations operating in the country have taken initiative to set up quality schools and free medical care for families living below subsistence level, but such social enterprises run by NGOs particularly by those getting foreign funding need to be checked and monitored to ensure the funds coming from abroad are not used for terrorist or other such nefarious activities. Secondly these NGOs although are registered bodies but their affairs in context of funding and donations received from abroad and indigenous sources are not being regulated. They are freely undertaking financing of micro businesses started by under privileged population operating in informal sector. No doubt these NGOs are doing social service and assisting government in furthering welfare of downtrodden, but their activities relating to financing of micro/ small businesses need to be monitored particularly to assess the impact of their financial support provided to small businesses in reducing absolute poverty and most importantly to bring flourishing businesses in tax net.
On the part of government, Benazir Income support program and various other such initiatives taken on the part of provincial governments to provide soft loans to youth to get them self employed have been helpful in reducing the impact of poverty, but it is a common say among the public that funds utilization is not transparent in majority of the cases.
Further there is need for improving standard of education and health care to ensure sustained growth of human capital essential for achieving fast economic growth rate. Regarding education there is utmost need for providing quality education at all academic levels to students irrespective of income status of their families. Private and public sector schools with altogether different curriculum are operating in all the four provinces. Thus poor are being discriminated. There should be uniformity in standard of education of all schools and students from less privileged class must have access to quality education embodying advanced learning technologies at all levels and fields of education.
Despite budgetary constraints it is imperative on the part of government that at least 4% of the GDP is allocated for education. Similarly for health care particularly for reducing infant mortality, which is quite high as compare to other South Asian countries. Similarly women death rate at productive age is also to be checked. These steps are needed for developing a robust workforce, a basic requirement for achieving sustained high economic growth rate enabling desired social outcomes to happen.