Published in Dawn on January 21 2018

THE 12th Five Year Plan (2018-23) — to be finalised soon — is based on a strategy that combines “inclusive growth with green development”. In recent years ‘inclusive growth’ — growth that benefits all segments of society — has replaced ‘poverty alleviation’ as a catchphrase in development planning. Everyone is talking about it, including the IMF, World Bank, ADB, ILO, national governments as well as those averse to the ‘growth’ paradigm. So let’s hope all players in the international and national arena mean it and are out to promote “equity, equality of opportunity, and protection in market and employment” as defined by the World Bank.

The time has come for Pakistan to address inequity and to tackle the informal economy, which is considered a barrier to inclusive growth as it excludes the majority of people from accessing opportunities of productive growth in the economic realm and deprives them of entitlements at work because of their informal status. In comparison, workers engaged in formal, registered, tax compliant businesses and units are legally covered for social protection.

The government cites its inability to bring thousands of small enterprises under the tax net, while the enterprises point to financial constraints as the main reason for remaining informal. However, both concede that formality is desirable for it benefits all stakeholders in the long run. Yet the goal remains elusive.

Continue reading →