Allocation of limited resources responsible for unemployment

ISLAMABAD, August 16, 2011 (PPI): Unemployment rate has increased from 7.4 percent in 2009 to 15.2 percent in 2010 and the percentage change was 105.41 percent which was the worst in the last 10 years, said Mahfooz Elahi, President, Islamabad Chamber of Commerce & Industry (ICCI).

In a statement issued here on Tuesday, he said that limited resources were allocated for development projects which were the main reason of increasing the unemployment and slowing down of economic growth.

While urging the government he said that government should finance capital projects instead of providing cover to public sector loss-making entities, which alone was Rs.541 billion during the last fiscal year.

He said that emphasis should be on improving efficiency of public investments for developing infrastructure. He further said that out of Rs.300 billion allocated for federal public sector programs, very small amount have been allocated for developing infrastructure projects.

President ICCI said that a substantial increase has been recorded in non-development expenditures since 4 years instead of increased outlays for development of infrastructure and social sector. Government needs to spend more on capital projects which provide a platform for jobs creation through generation of economic activity.

Mahfooz Elahi said that China, Japan and Korea have kept infrastructure projects on priority basis, aimed at addressing poverty alleviation and reducing unemployment.

Government should reform public spending and provide more funds for initiating capital projects to improve employment situation in the country, he emphasized.

He said that by financing infrastructure projects like access roads, water, dams, irrigation, housing and schools would generate productive employment opportunities.

In order to make the public sector spending more effective, public spending policy must have priority for removing infrastructure obstruction, he maintained.