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Encouraging young entrepreneurs

The government is doubling down on its efforts to encourage young entrepreneurs through the Kamyab Jawan Programme, allocating Rs100 billion in the first phase. Scrutiny of applications has started, with a few hundred youths already given loans. We should know relatively soon which of the thousands of other prospective projects end up getting money. The government also claims that the programme will generate one million jobs for the burgeoning youth population. While the plan is well-intentioned and appears to have most of its parts in order, at least on paper, we will have to wait for quite a while to judge its success. This is because success is dependent on several external factors, some of which are not entirely in the government’s hands.

Still, the government is trying to do what it can by improving the ease of doing business and the cost of doing business — both things being major controllable external factors. At the same time, the positives of focusing on youth entrepreneurship and employment are undercut by the reality of the broader economic picture. Economic growth projections remain bleak, and the prospects of a spike in foreign investment remain low as long as the world economy is still in recovery mode. There is also the issue of the two targets of growth and employment not matching up very strongly with other goals.

The government is also making a strong ‘digital’ push. One thing we know about tech companies is that when they succeed, they make piles of money. Unfortunately, with a few rare exceptions, tech companies are not drivers of employment. For that, we need to focus on traditional labour-intensive industries for skilled and unskilled workers. That will be even more difficult than the more limited scope of youth-oriented projects, because it requires successful reforms and infrastructure development that encourage manufacturing. So far, the focus is only on CPEC, which will have knock-on benefits in other areas of the economy, but at the end of the day, these will be restricted to areas near the project route.

We need plans for parts of the country that CPEC misses, and we need them soon.

Published in The Express Tribune, September 25th, 2020.

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