Pakistan to Curb Populace Gain of a New Zealand a Year: Economy
The country will try to reduce its population growth to 1.2 percent a year by 2025 from about 2 percent now, Ahsan Iqbal, deputy chairman of the Planning Commission, said in an interview. The nation of about 196 million people each year adds some 4.4 million people, the equivalent of New Zealand’s population, he said.
“We actually need to apply brakes,” Iqbal, a member of Prime Minister Nawaz Sharif’s cabinet with an MBA from the University of Pennsylvania’s Wharton School, said in his Islamabad office. “With this almost 2 percent growth rate it becomes very difficult to sustain your development.”
Pakistan joins Indonesia among Asian nations seeking to restrain burgeoning populations as slowing economic growth reduces job prospects. About a third of Pakistan’s population is under the age of 15, putting pressure on the government to put them to work even as companies such as Nestle Pakistan Ltd. and Colgate-Palmolive see profits grow along with consumer demand.
“If we can give our young population the right education, right skills, it is a big demographic dividend for the next 10 to 15 years,” Iqbal said. “If it doesn’t happen it becomes a demographic disaster.”
The government will focus on making planning programs available to married couples and prioritizing education for women, he said. Growth at the current rate will strain natural resources and hinder growth, he said.
Only about 30 percent of married couples use contraceptives in Pakistan, compared with 55 percent in neighboring India and 73 percent in Iran, according to a finance ministry economic survey published last year. Pakistan’s population grew about 2 percent, compared with 1.3 percent in India and 1 percent in Iran, it said.
Indonesian President Susilo Bambang Yudhoyono wants families to stop at two children to keep schools and services from being overwhelmed. The government is aiming to prevent the 250 million population from doubling by 2060.
The policies of Pakistan and Indonesia, both majority Muslim nations, contrast with other Asian countries that are seeking more people. Singapore offers cash handouts and extended maternity leave to encourage its citizens to have more kids, while China has loosened its 34-year-old one-child policy that has saddled the nation with an aging labor force.
While Pakistan’s population growth is “out of control,” a middle class of 55 million to 70 million people is helping to drive the $225 billion economy, according to Sakib Sherani, a former finance ministry adviser and now chief executive officer at Macroeconomic Insights, an Islamabad-based research firm.
“Even if it’s a smaller middle class, it’s really spending a lot,” he said. “A lot of companies, both Pakistani companies and some foreign companies, are already benefiting from the consumer space.”
Nestle Pakistan Ltd., a unit of the world’s biggest food company, reported a 26 percent increase in earnings for the year that ended December 2012, while Unilever Pakistan Ltd. profit surged 34 percent in the same period. Pakistan profits at Colgate, the world’s largest toothpaste maker, had surged 39 percent in the year ended June 2012.
Sharif’s seven-month-old government is struggling to revive an economy hindered by power outages and a Taliban insurgency. Annual economic growth has slowed to 3 percent on average since 2008, below the 7 percent pace the Asian Development Bank says is needed to provide jobs for Pakistan’s expanding workforce.
His administration has changed energy policies to tackle power shortages and averted the risk of a default on its foreign debt after the International Monetary Fund agreed to provide a three-year, $6.6 billion bailout package last year. Currency reserves held by the State Bank of Pakistan have fallen about 60 percent to $3.7 billion on Jan. 2 from a year earlier, central bank data show.
The government has “at least been successful in applying brakes to the very fast nose-dive the economy was taking,” Iqbal said. “If those brakes had not been applied, we’d be in sheer chaos today.”
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