World Bank

Corruption and political instability is on top among the five major constraints being faced by the private sector expanding firms in Pakistan, according to the World Bank report titled “More and better hobs in South Asia”, resleased on friday. The expanding firms in Pakistan ranked corruption and political instability as number one constraints and they ranked uncertain government policies as third major problem.

Fourth constraint is tax administration and fith major difficulty is macroeconomics instability. The frequency of bribes for electricity connections stood at 71% ,water connections 62% and meeting with tax officials at 59% in Pakistan. Corruption is among the top five constraints in five South Asian countries and firms face high levels of corruption in a range of interaction with public officials, particularly for utilities and tax inspection.

The government interactions that have the highest frequency of bribes vary from contry-to-country, but the non-expanding firms, according to the World Bank report, have ranked ttaz administration as top most problems for them in Pakistan and second problem is electricity, third politicla instablility, fourth uncertain government policies and fifth lenghty process of courts. South Asia has seen an accelerated job growth and a substantial decrease in poverty over the last three decades, second only to East Asia.

The region will be the largest contributor to the global workforce over the next wo decades. More and better jobs are needed to sustain frowth and reduce poverty. South Asia created nearly 800,000 jobs per month between 2000 and 2010. However, despite growth, the region is still home to the largest number of the world’s poor, and half billion people. Since labour is the primary asset of the poor, having more and better jobs is the key employment challenge being faced by the region.

Education is key to labour mobility. Education attainment remains low and well over 25% of the labour force in all countries except Sir Lanka lacks any education at all. More education facilitaes labour mobility to more productive employment, from rural agriculture to rural-based industry and service jobs and from urban casual work to urban-based regular wage and salaried industry and service jobs.

Additionally, South Asia has some of the highest rates of malnutrition in the world, as well as high levels of anemia and iodine deficiency. Malnutrition rates are higher even than Sub-Saharan Africa. poor nutrition results in lower productivity of the labour force. Since the demand for labour is derived from businesses, it is important to address constraints of electricity shortages, corruption and political instability in some parts of the region. A lack of electricity was ranked highest and the report outlines the electricity reform agenda to tackle the issue.

The reform agenda is not only about investment. Improvement in the regulatory frame work and governance of the sector are equally critical. Growth has varied within the region. The demograpic transition  6 when the number of workers grows faster than their dependents, 6 can provide a tailwind for the next three decades in much of South Asia. This is because the resources saved from having fewer dependents to support, provided it used for high priority investment, can support rapid growth of labour productivity.

Among the five large countries in the region, employment growth since 2000 was highest in Pakistan followed by Nepal, Bangladesh, India and Sri Lanka.


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