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Pakistan Today

Published Date: Dec 1, 2011

MIDDLE CLASS, GROWTH ENGINE OF PAKISTAN: SEMINAR

Pakistan needs to take a leap frog from large scale industrialisation and focus on services sector as participation of middle class is contributing much more towards country’s growth. In the seminar organised by Planning Commission on the topic of “Businesses and the Middle Class in Pakistan” participants were of the view that countries with larger proportion of middle class have achieved exceptional economic growth despite the recent global recession in national economies throughout the world.
Shahid Javed Burki, former caretaker finance minister and vice President of World Bank said that for any country in the world middle class is the driving force of change and growth and in Pakistan’s case middle class is playing a pivotal role in progress of the country.
He said that trend and ratio of acquiring higher education in middle class of the country is much higher as compare to India and Bangladesh and in-order to tap this advantage; private sector of Pakistan can play its role. He said policy makers in Pakistan should also focus on the presence of Pakistan’s Diaspora residing outside the country and their role in changing trends and growth of Pakistan.
Dr Nadeem-ul-Haque, Deputy Chairman Planning Commission said middle class is supposed to be the driver of change and growth in any country. He said Planning Commission in its growth strategy has focused upon and urged for entrepreneurship, market development, and urban growth while focusing on cities which are engine of growth.
Dr Vaqar Ahmed, Head, Inclusive Growth Unit, Sustainable Development Policy Institute (SDPI) said major chunk of this middle class is residing in urban areas as size of middle class in Pakistan ranges between 32 million to 80 million depending upon various methods of calculation. He warned that if middle class was not provided with venues for channeling human capital and savings, then tendency of consumption expenditure will put sustainability of growth in danger. He discussed that middle class is mostly employed in civil and military services, and this class provides the major chunk in professional cadres such as engineering and medicine. Furthermore micro and macro barriers to entrepreneurship are holding back middle class from moving from wage to self employment. Vaqar, while citing results from a recent Pakistan Institute of Development Economics (PIDE) study, explained that middle class is predominantly an urban phenomenon who lives and works in cities. Referring to the size of middle class population in country, he said Pakistan has a bigger middle class as compared to its neighbours. He said that recent global trends that indicate that middle income countries are now drivers of global growth such as India and China, who have grown at a very faster pace. He deliberated that higher income has led to higher household consumption in these countries where one sees a relative shift away from necessity items and towards choice-driven consumption. He said that declining growth rate in Pakistan is resulting into unemployment whereas no physical and intellectual space available to middle class. He stressed on urban growth and management to accommodate middle class in the country. He also recommended measures such as infrastructure and social sector governance, legal and judicial reforms for inclusive markets and efficiency of public expenditure through results based management.
Afnan Ahsan, CEO of Engro Foods said that middle class is the largest tax payee in the country and proving back bone of the country in growth. He said that in 2020, 70 percent of China’s total population would be from Middle class. He said that the government should provide sound base and do structural legislation for more opportunities for middle class.