Before 2018 election all political parties made promises but the one that most attracted to the voters after eradication of corruption in Pakistan was creating 20 million Jobs in Pakistan. Pakistan Tehreek-e-Insaf (PTI) now the current ruling party of a country, headed by Prime Minister Imran Khan, won 2018 general election, got 18.4 million votes, promised to their voters and the citizen of Pakistan that if it comes into power, PTI will be able to create 20 million jobs in the economy but has never explained how?
Politicians and economist talks about economy, where it will be headed, current economic indicators, but in case you have not noticed, they are wrong most of the time. In last government between 2013-18, former finance minister Ishaq Dar (currently announced absconder in money Laundering case and self exiled
in London, UK) relative of former prime minister Mian Muhammad Nawaz Sharif, used to talk about excellent economic performance of Pakistan in his tenure and right after his departure actual economic performance unearth.
On December 11, 2016, French Minister of Finance, Economy and Industry , Mr. Michel Spin has said Pakistan had made impressive economic gains in last three years (from 2013-16, Nawaz govt) characterized by macro-economic stability, fiscal discipline, sustained growth rate and record breaking performance of Pakistan Stock Exchange. French Minister expressed his opinion in Paris Meeting with Ishaq Dar in 2016. French Minister also acknowledged Pakistan’s economic achievement expressing the hope that the journey towards further progress would continue. He also said, Pakistan can maintain high growth rate in the coming years with continuation of the current policies. This meeting and discussion and opinion also reported in media and newspaper.
These two pundits predicted in 2016 that Pakistan’s economy will progress in coming years with continuation of Ishaq Dar policies. But current actual economic condition proved both of them wrong. They both used unreliable economic data, purposefully or not but certainly not truthful. It is not only about previous finance minister statement and promises, politicians around the world miscommunicate in many ways by explaining wrong economic indicators.
PTI the current ruling party emerged to be the new rising power in Pakistan’s politics who also made promises for economic prosperity and bringing back economy on growth track. One of the most attracted, highly needed PTI promises during 2018 election was creating 20 million jobs in the dying economy. But how the current government will be able to do so, has never been explained. It is now our duty as a citizen to have basic understanding of economy and factors shaping it. Instead of believing Ishaq Dar type of politicians paying attention to economic indicators can give us an idea of where the economy is headed so that we can plan our finances and career.
There are two types of indicators — leading indicators and lagging indicators. A leading indicators is any factor that changes before the rest of the economy begins to go in a particular direction e.g. right after the 2018 general election, stock market gained some points. But leading indicators are not often accurate, while lagging indicators are the output of the economic performance, easy to measures but hard to improve. Keeping the difference of leading and lagging indicators in mind, we can now easily understand the PML (N) government finance minister Ishaq Dar had been using leading indicators of the economy that is very hard to measures and easy to influence. But the end result was crashing stock market, increased inflation rate, high unemployment rate, historic external debt burden etc.
In order to create employment, one has to understand economic system of the country. Economic planning has been problem for almost all past governments. Pakistan operates on mixed economy. Where capitalism and socialism both exist but not 100 percent. There is a freedom and regulations both. In order to understand what is best for Pakistan. Pakistani citizen need to know few basics of type of economic system. This is vital more than ever so that we can put demand and pressure on government to come up with clear guidelines and long term economic planning.
Types of economic system in Pakistan
There are four types of economic system that prevails in the world. The first one is traditional economic system. The most ancient type of economic system where tradition, culture, customs and beliefs help shape the goods and services the economy produces. Being agricultural country Pakistan still has this system to some extent in rural areas and farm based areas. Pakistan claims to have mixed economic system but the fact is Pakistan rural areas still operates on traditional economic system. This is due to no land reforms and feudalism issues. Landlords and jagirdars turn politicians have been reluctant to make reforms and focuses on their own profits. Price control and price mechanism is designed in their own favors where they only focus on their profits and poor farmers do not get fair return of their investment and end user pay more prices.
The second type of economic system is command economic system where government has centralized power and decisions are made by central government. China and USSR (former Russia) have command economic system. Because government has the decision-making powers it involves in almost everything from planning to distribution of resources. Command economic system provides enough supply of resources and rewards its people with affordable prices. Pakistan can opt for this system temporarily to run significant industries like utilities, aviation, defense, railroad and correct them by providing long term guidance to run industries and get back to mixed economic system gradually once everything is settled and streamlined. But to opt for this option, government needs to have capability and brain to run all industries which is impossible currently. According to Fair and free election network (FAFEN), 24 newly elected MNAs merely have the qualification of matriculation while two of them are not even matriculate. Out of these 24 matriculated legislators four are female and 20 are male legislators. Based on this information provided by FAFEN, Pakistan currently cannot opt for command economic system where government provides guidance and run industries. They lack experience and expert knowledge. 24 matriculate MNAs cannot make policies for urban centers, economic policies, power sectors policies, shipbuilding policies, education policies, etc. FAFEN provided below table of Punjab provincial assembly members elected in 2018 general election.
The third type is market economic system where private companies, firm and households make investment decision in their own self interest and determine resource allocation, what goods and services are produced and who buys those goods and services. Competition gets toughen , efficient use of factors of production, entrepreneurship is incentivized, but less government intervention and regulation. End user who are the common citizens have to pay higher prices, no consumer protection, no check and balance on price, no price mechanism in this system. Social benefits are almost not there, discouragement of paying taxes as there is no return to pay taxes to government, less public expenditure means peoples are on their own. Self interest and profits have a priority over human and social needs and in result consumer can be exploited. In Pakistan where lack of governance is already there, we see the element of Market economic system in some areas specially in education and health care system. Jobs cannot be created by government as mostly individual self interest is there. In this system that Pakistan also reflects in some part, corruption arises as individual self interest collided and to remain competitive they do whatever it takes to remain competitive.
The fourth type of economic system is mixed economic system, which is a combination of market economy and command economy. In Pakistan’s mixed economic system the balance is not correct. This system provides government the opportunity to make choices of industries they want to run and which industries they want private companies and individuals to run. In mixed economic system government is involved in running sensitive industries like defense, railroad, transportation etc. Less government intervention in private sectors to run on their own and only provide regulation .
Areas of meeting point
Imran Khan-led government has to decide which industries they want to run and which they want private companies to run. In order to create jobs in the market and provide social benefits PTI government should focus on health care, education and defense initially. Every other industry should be privatized and regulated where they can also have public-private partnership like in mass transportation industry. Less investment will be required a government to run mass transportation system at an affordable price and regulate the industry as well. Making profit as per their share of investment and penalizing for not providing standard services as per agreement.
After these choices PTI government can further classified areas where large investment is required, medium investment is required, and no investment is required. Large cost centers can be fully privatized or public-private partnership arrangement can be made. Medium cost centers can be handled solely by government and areas where only regulation and implementation of already existing regulations can bring prosperity in the economy and create more jobs.
As the people’s demands are very high and opposition parties are building pressures in coming days, PTI government leading by Imran Khan immediately focus on areas where only regulations, corrections, ease of policy and laws, implementation of already existing laws can create jobs and incentivized entrepreneurship that will create more jobs.
The first area where PTI government can focus on in implementation of existing laws of traffic and environmental laws. No single bike rider should be allowed to ride without safety helmet. Immediately the demand of safety helmet will be increased in Pakistan, private companies will make investments and production will be increased up to scale where demand can be met. Online challan system should be upgraded and income generated from challans will be re-invested in safe city projects, betterment of safe transportation system, discipline can be brought back within society and in this regard change can be observed immediately. Without license, driving should be 100 percent discourage through challans and public should realized that having a driving license is not the right, but it is the privileged that can be taken back if drive unsafely and irresponsibly. Through the implementation of existing traffic laws and introducing new driving and traffic laws, government can create more jobs. 40 hours of driving is mandatory to apply for license. More driving institutes will be opened, private companies and individual will be investing in establishing driving schools. Point base driving license should be introduced so that citizens can become responsible citizens. Without this penalization nobody on the road care about following driving and traffic laws. Tabdeeli (change) will be observed in first 100 days. Government do not have the responsibility only to create jobs but to create more responsible citizens. Driving institutes should be provided government guidelines for safe driving concepts and fulfils its responsibilities.
The second area where PTI government can immediately bring employment opportunities in first 100 days is making regulations for environmental protection. All vehicles on the road should become mandatory for yearly mechanical checkups. PTI government should make legislation that all public and private vehicle must be sent to government-mechanical checkup. Where certificate of maintenance will be provided on the basis of vehicle mechanical condition. Government should invest in vehicle testing centers where mechanical engineering graduate who are degree holders or diploma holders will be checking vehicles. This will immediately create thousands of mechanical engineering jobs in Pakistan economy. The result will be in better environment, less air Pollution, less accidents on the road due mechanical fault, low carbon emission, increased in government income through testing fees. Approximate more than three million vehicles come on the roads in Karachi every day. If government charge minimum Rs500 yearly for vehicle checkup, government will be earning approx. 1750 million only from Karachi city. This is a roughly idea, car testing, truck testing, bus testing, motorcycle testing fees must be different. Thousands of new jobs can be created through one legislation for environment protection. Only Karachi city needs at least 4 vehicle testing centers to cater the needs of approx. 3.5 million vehicles. Other cities in Sindh provinces, Punjab, Balochistan and Khyber Pakhtunkhwa (KPK) may have testing centers approx. 150 provinces wise. The opportunity is great with lots of potential.
The third area where PTI government should focus on ease of doing business in Pakistan. Why an individual applies separately for National Tax Number (NTN) to do a business. His or her National Database and Registration Authority (NADRA) CNIC (Computerized National Identity Card) along with additional numbers can be used as NTN. Once somebody first apply for NADRA CNIC, his NTN should be automatically be generated. It us up to him whether he wants to apply for job or wants to start his own business. Currently salaried person NADRA CNIC number considered as his/her NTN but as soon as he plans to start his business, he has to apply separately. This becomes hurdle. Secondly person has to provide utility bills to apply for NTN. This regulation should not be necessary for sole proprietor businesses. This will help individual to start their own business. Government should also provide areas of opportunities information to general public where people can take interest and find market gap where government wants them to invest.
To create demand for any products used in industries, Government should identify the product that can be manufactured in Pakistan. In the field of health and safety for person and environment Pakistan is not producing anything for Pakistan market. Personal protection equipment include ARC Flash Suits that provides safety from ARC, Safety Helmets Material which is called ABS material, Eye Wear Goggles as per ANSI standard Z89.1, ear protection products like ear muff and ear plugs, polycarbonate material visor used for face protection used in different industries, S3 grade safety shoes, fire extinguishers, gas detection system, fire protection system, alarm, respiratory mask, self-containing breathing apparatus all are imported unnecessarily. Latest tools and techniques, research in these products should be focused in research institutes, universities, technical schools. Their cost of production in Pakistan is very high that investor are reluctant.
Health and safety laws are almost not there. Encouragement of safety culture will create demand for these products in Pakistan that are imported currently but will provide employment opportunities and safety of workers concepts.
Monitoring equipments like air pollution monitoring, gas monitoring, flame monitoring, noise level monitoring equipment are in demand but are imported. New government should provide facilities and help enable Pakistani investors to invest in these products. In the field of HVAC, steam boilers, generators, valves strainers, trapes, vents, magnetic separators, incinerators, oil heaters are mostly imported from EU, USA and China. Pakistan has capabilities to produce in Pakistan. But Pakistan industry discourage Made in Pakistan product. Karachi Shipyard & Works Limited has the capacity to produce steam boilers but has never been given importance. Government should enforce industries in Pakistan to use Made-in-Pakistan boilers. Millions of rupees can be saved in these products imports and employment can be created.
NADRA centralized data should be upgraded in a way that citizens tax information, driving license information, vehicle registration information, challans information, driving penalties information, banking details, criminal records, education records, air travelling information, defaulters information, tax thief, all can be centralized. This will help PTI government to plan better, eradicating corruption, providing health care benefits to elderly and poor and regulating private companies to provide medical health insurance to their employees through private insurance companies.
A new health care system needs to be developed where government is responsible to provide health care insurance to poor and elderly and disabled citizens. Through legislation private companies must be providing health care benefits to their employees. Private companies who follow government regulation should be given incentive in tax matters accordingly to encourage them.
Without NADRA centralized system new health care system can be not implemented. Generalized health claim forms, electronic data interchange where Health claim form can be submitted to government and private insurance companies, introduction of ICD codes (International Classification of Disease) and CPT code (Common Procedural Terminologies ) are all the tools that will help PTI government to better plan for new health care system for Pakistani citizens. A new health care system where government insurance company, private insurance company, information technology all have a pivotal role. Use of information technology where online health care system, software for health claims processing, submission, payments, health care records, insured member details, benefits determination, authorization and approval of limits, health care providers (doctors) information and registration, hospitals and clinic registrations, doctors specialization, city wise or area wise doctors registration, hospital registration all vital for a new health care system. If focused on priority basis, millions of health care jobs will be created in first 100 days of PTI government.
Statistical data from a new health care system where ICD codes (International Classification of Disease) and CPT code data (Common procedural Terminologies) will also help government to better allocate health care benefits. For example ICD codes used in generalized health claim form will help to determine which disease are increasing where more prevention is needed.
Centralized NADRA data base will also help government to build strong local body system, which is the mother of democracy. Through this system, government will be able to know which area has how much population, how many citizens have their own house, how many people are living in rented house, previous residential and home address, tax information, birth information area wise, schooling system, health care units information, all can be tackled through centralized NADRA data base. Event the terrorism activity can be observed, who is living where, who is new in the area, who has just shifted and changed his home so on and so forth. Through this centralized NADRA database hiring for the government position will be transparent, government should have a record of previous employment, criminal history, performance, education, experience etc. Merit will be promoted, and jobs can be created only on merit basis. Pakistan ZINDABAD.