One of the most famous quotes of Maimonides is “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”. Khyber Pakhtunkhwa Government, led by PTI, in pursuit of reviving Pakistan into Naya Pakistan (New Pakistan) has launched an Unemployment Benefit Scheme for the “Educated and Unemployed Youth” of KPK.
A total budget of Rs. 500 Million has been dedicated for this project. It is, not from any angle, a sustainable or an inclusive project. Some of the most developed countries; the economic leaders of the world have not been able to produce any favorable results from Unemployment Benefit Schemes. Only in USA the contribution to long-term unemployment hike from unemployment benefits has been from 1% to 2.6 % from FY 2010-11 to FY 2011-12. USA and combined European Union, some of the strongest economies of the world, after realizing that such a scheme is doing more harm than good, considered revisiting the structure of the scheme.
In this blog, I will point out the flaws of this scheme and how it is an added burden on the already crippling economy of KPK and Pakistan. Following is the picture of the advertisement published by KPK Government in Dawn Daily on 11th January, 2015:
First problem with this scheme is more of a governance issue than a technical one. The focus of the leadership, under good governance, should be in creating jobs. The funds that have been allocated for this scheme should have been used to start development projects which could have created jobs for the “Educated and Unemployed Youth” hence putting money to a more sustainable and result oriented use. Jobs created from investment into development projects and outcomes of the projects could have created a ripple effect bringing economic prosperity to the whole society rather than a few individuals.
Secondly, as John Carney of CNBC states “Unemployment benefits don’t just have an effect on a recipient’s willingness to take a job, they also affect an employer’s effort to expand his workforce”. KPK’s unemployment rate increased from 8% in FY 2011-12 to 8.5% in FY 2012-13, being the highest amongst the documented unemployment rates of four provinces. A good policy would put a stop on this increasing unemployment rather than aggravating it with creating a disincentive for the youngster to find a job. A youngster who knows that now there will be no monetary pressure on him to diligently look for job will resultantly be less driven and motivated in acquiring a vocation for her/himself. Also, it will relieve the employers from the somewhat moral obligation they had of creating jobs to feed those who don’t have a livelihood.
Lastly, such schemes have, historically all around the world and, in Pakistan over the years attracted fraudsters who are always looking for an opportunity to rip off the ones who deserved it. This is a two prong issue; the first level of corruption will surely come from within the system: Government Officials will bring in fictitious applicants and fill their pockets and secondly there will be a lot of youngsters with fake degrees applying for the scheme (assuming that degree attestation from HEC isn’t required as it isn’t a part of eligibility criteria) as KPK has the biggest market for fake degrees in the country. Projects like Yellow Cab Scheme and Benazir Income Support Program (having same notions) have all been misused in the past hence failing to deliver whatever they promised.
So, a project which will create more unemployment by providing benefits to the unemployed and that has an inherent loophole by creating space for corruption will cost the tax payers Rs. 500 Million. A project which is neither sustainable nor efficacious in nature; which tries to facilitate the affected rather than curbing the root cause of the problem is “Another Landmark Public Welfare Initiative from Government of Khyber Pakhtunkhwa”. A project’s credibility rests on its sustainability and social and economic outcomes it reaps. Is the project sustainable? No, how can an economically stricken province muster up Rs. 500 Million every fiscal year where the unemployment is on a rise and left unchecked? And what will be the social and economic outcomes of the project? Nurturing a young population on state reliance? Providing them a disincentive to look for jobs? So, if the Naya Pakistan will be formed on same old bogus economically inefficient projects then I see nothing new in the Naya Pakistan.
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