While Pakistan is struggling with economic disparity and price hikes, instead of a proper relief plan for the public, the federal government has announced 15 mega initiatives under the Prime Minister’s Youth Development Package. This is an Rs150 billion-dollar endeavour and while opportunities should be provided to facilitate skill development and employment for young people, the timing of the initiative is questionable.
At this point, the possibility of default is becoming more certain by the day. Moody’s rating for Pakistan is Caaa3, the third last on the scale. The remaining options indicate countries very near default or already defaulted. Although the government expresses high hopes still, we are dependent on borrowing and debt rollovers to survive. This is also to facilitate optics and populism considering the upcoming elections. Of course, partisan politics and face-saving were expected to garner public support given that the elections are scheduled later in the year. The problem remains, however, that doing so against the crippling economy is mildly tone-deaf.
Another problem is the amount dedicated to the initiatives. Again, if this was at some other time, the reasoning would be positive and appreciated. However, the high number of internships, laptops, and scholarships does not make sense as the funding can be put to more immediate measures needed for survival. We need targeted subsidies that can be IMF-friendly as well. Two-thirds of the population is young people and will feel empowered through education and skills, but the returns of this investment are extremely long-term right now.
Likewise, if the IMF bailout is not unlocked, we are looking at major debt repayments that will require all revenue we can free up. In that sense, all government expenditure matters and must be spent to repay loans. This comes at the cost of skilling our youth, and this is very disappointing, but a reality of the tough times we are in.
