DefinePK

Abstract

The Pakistan economy is currently going through a period of much needed structural adjustment focusing on: (i) Reducing fiscal deficits from about 6 to 4 per cent of GDP, which should reduce public sector borrowing and bring down interest rates and inflation; (ii) Reducing tariffs from an average of about 80 per cent in 1993 to about 60 per cent currently and about 45 per cent next year – which while requiring painful adjustments particularly in the industrial sectors, should make Pakistan more competitive in the long term and also benefit consumers; (iii) Reducing the size of the public sector in the economy by privatising nationalised banks, nationalised and public sector industry and public utilities including power, gas and telecommunications, which should increase the efficiency of these sectors. All these measures have implications for employment generation. In the short term they are slowing down the economy and therefore employment creation is not taking place at the earlier higher rates. In the long term they should help stabilise the economy and add significantly to economic growth.