- Who should the unemployed look towards?
The automotive industry is expecting at least 10-15 per cent more direct jobs to be lost in the coming months as a result of a record fall in sales requiring it to reduce output as demand falls and inventory piles up. Businesses dependent on the industry such as vendors of auto parts who supply directly to automobile assemblers have had to let go of around 40,000 workers. Latest figures for large-scale manufacturing show a contraction of 3.28 per cent which has meant sectors such as textile, pharmaceuticals and food, just to name a few, have also made layoffs. The SBP’s monetary policy tightening has caused record inflation and hiked the discount rate to 13.25%, squeezing domestic demand as people save more and slowing down business activity as private sector credit has become too expensive. While the rupee, depreciating around 27 per cent against the dollar since August of 2018, has increased cost of production it has also discouraged imports of raw materials and semi-finished products that has in turn necessitated factory closures, further contributing to unemployment. The government, for obvious reasons, will not look at the falling import figure through this perspective as it doesn’t fit into their narrative of the so-called ‘economic turnaround’. Pakistan is set to experience the lowest growth rate in the region this fiscal year at 2.4 per cent according to the IMF so any reprieve is unlikely in the short-term.
Prime Minister Imran Khan has congratulated his economic team for a ‘turnaround’ on the basis of improvement in macroeconomic indicators chief among which is the reduction in the fiscal deficit but he has failed to address the crippling unemployment across most industries. The government is supposed to create an economic environment where jobs are created; it has done the opposite. It can provide government jobs but it has refused to do this as well and is rather closing down 400 departments. The government must reassess its policies in order to reduce the hardship of the working class that has been left to fend for itself.