EMPLOYMENT: AT WHAT COST?

TARIQ AHMED SAEEDI
(feedback@pgeconomist.com)
Aug 1 - 7, 2011

Defending the government is a democratic right of the ruling politicians. This is an international standard. When the present ruling party does not falter in its determination to defend itself from the forays coming from the critics, it seems quite normal. However, what seems absurd is the stubbornness with which it overlays its follies even when acceptance and recognition of wrong moves could help it solve the problems.

Recently, chief minister Sindh while speaking at a public gathering said that PPP government had created 65,000 jobs in three years. Presumptively, he was referring to the central government. He also asserted that social safety net spending was also increased to alleviate poverty.

At what cost, one wonders, this job creation took place. Is stuffing the already heavily loaded vessels of lose making public sector enterprises breathing on the public borrowings with political inductees a sustainable job creation? It is not at all a realpolitik if the government inadvertently misconstrues this so. Such inductions may, however, lead to an instant sinking of a vessel that may be due sometime later.

Inductions in government departments (education, health, etc.) on bribes are being done brazenly. PIA, Pakistan Railways, and a number of government departments that saw an influx of workforce and undue pressures on their financials can no more ingest the unskilled and untrained human intakes.

Media reports say only Pakistan Railways is overstaffed with more than 25,000 employees and most of them are political inductees. It has near 90,000 staff workers at present.

Similarly, PIA has long been in the spiral of net losses to a degree that the existing liabilities of the national flag-carrier have surpassed its assets with only its 2010 (nine-month) losses crossing Rs11 billion. Political interventions are seen evidently in the recruitments in the airline.

Inefficiency and poor governance are the common predicaments public organizations are confronted with on the path towards profitability. Professional staffs out of the clouts of nepotism can alone get them out of the financial messes.

Change in status quo is vital for this country. Sustainable job creations must replace stopgap measures of unemployment reduction. Income capacity building of people and their skills developments are the only way out.

Some analysts are of the view that instead of price rises, the focus should be on income improvement. Improving income levels can offset the impact of rise in prices of essential and nonessential items. If people put in extra working hours a day to upgrade their living standards, they will most likely be in a better position to counterbalance the impact of price inflation, a columnist of a famous daily argues. His was the true argument. Yet, the advice goes impractical generally in view of the current economic situation where not only buying power of the masses is weakening but job opportunities are also truncating.

Under the Benazir income support programme (BISP), the government is doling out financial assistances to five million households to be extending to seven million in future. Advocates of the programme compare it with food stamps offered even in the developed economies to enable marginalised people to fight food inflation. "BISP has created positive impact in the lives of four million beneficiary families," said Ms. Farzana Raja chairperson BISP. A monthly cash grant of Rs1000 per family is a mockery at the miseries of poor, comment the critics. Can this paltry sum ensure proper nutrition for all members of a family of four? they rightly question.

More over, this donation programme is transitory in nature since no government can afford to feed seven million families forever. Instead of feeding, teach them how to fish as a famous proverb advises.

The government allocated Rs34 billion for the programme when it was launched in 2008-09. The allocation was Rs40 billion for 2009-10 and it was increased to Rs50 billion for the last fiscal year (2010-11). Total Rs124 billion was allocated, which was a significant amount.

Interest free microfinance, vocational and technical training and life insurance are also the envisaged points of BISP's agenda. Under prospective Waseel-e-Rozgar component of BISP, vocational and technical trainings are to be provided to 150,000 jobless people, according to an official document. The government is also conducting survey to gauge the actual poverty level in the country. The findings from the survey are said to improve the effectiveness of the programme.

International monetary fund (IMF) linked the success of the stand-by arrangement programme with social stability and support to poor and vulnerable people when the international lender sanctioned $7.6 billion loan to Pakistan in November 2008.

Macroeconomic measures, which came into action as second prime condition of the loan, are controversially slanting to improve the country's repayment capacity irrespective of their implications on the economic conditions. Were it not so, economic growth should have portrayed some sort of acceleration over past three years.

Economic analysts believe that Pakistan needs robust growth rate to generate employments. The IMF's reform program has also failed to motivate the government to remove anomalies in its tax system and shut eyes to the damages inflicted on social stability because of anti-poor fiscal measures and inflationary interest rate.

Poverty is the major issue in Pakistan with monstrous price hikes eroding the buying power of the masses to an extent that now the hitherto well-off middle class is also tightening their monthly expenditures to pay skyrocketing electricity bills.

Despite spending relatively much on food and groceries, they are still not able to take in and feed their families nutrition required for the healthy lives. Low-income groups are gasping for even food staples.

Rupee value is on the downward course constantly and what a rupee could buy yesterday cannot buy today. Comparative statics have been reported many a times. Prices of wheat, meat, spices, rice, fruits and in fact of all staple foods have ramped up horrifyingly during last three to four years.

Yet, hiring on favouritism and bribes is a murder of merit. Besides, amid higher poverty incidence this act may win over electorates but prove a disastrous in the end since overstaffing and unproductiveness work as a double whammy to the draining economy and the social stability.