‘GDP must grow at 7pc to absorb increasing labour force’

ISLAMABAD: As much as 7 percent growth of Gross Domestic Product (GDP) is needed for the absorption of the increasing labour force in the country, according to draft strategy `Pakistan: Framework for Economic Growth,' prepared by the Planning Commission.

The draft says that maximization of opportunity for all citizens is its goal so that they can obtain a better life though their hardwork and ingenuity.

Pakistan's population until recently was growing at 3 percent annually and is now growing at an annual rate of about 2 percent, it said adding as a result of the previous rapid population growth, labour force is expected to grow at about 3.2 percent annually over the coming years.

"To absorb this addition to the labour force, GDP should grow at a rate of around 7 percent annually and this growth must be sustained in the coming years," it added.

The growth strategy seeks generation of opportunities everywhere-employment and entrepreneurial (self-employment) opportunities.

The strategy aims not only to increase investment in the country, but also to make investment more productive. It also proposes special programs to support key parts of the population, such as the youth, who suffer disproportionately from unemployment.

The strategy also encourages the improvement of productivity by, for example, increasing competitiveness in the market by easing the entry and exit of firms.

The strategy also proposes measures, such as a reform of the restrictive zoning laws, which have impeded the growth of domestic commerce and hampered the role of cities as generators of economic growth.

The aggregate of such programs would vastly improve the investment climate, reduce the cost of doing business, thus increasing the profitability of enterprises and encouraging them to expand.

The strategy has enumerated challenges faced by Pakistan which includes decades long struggle with stabilization arising from unsustainable fiscal policies; pressures of demography; legacy of economic distortions from previous policies; battering from external events, including the earthquake in 2005, the flood in 2010, and a continuing war against terror; low and declining productivity; and heightened expectations of the population for a better life from a democratic government.