Pakistan workers left in the cold as housing program falters

A laborer sleeps on his cart in Rawalpindi, Pakistan. (File/AFP)

• Analysts say that rising unemployment and double-digit inflation pose the biggest threat to Khan’s government
• In the South Asia nation of 208 million people, almost a quarter of the population lives below the poverty line

ISLAMABAD: For 15 years, Mushtaq Khan has worked as a daily wage laborer on construction sites in Islamabad, sending money home to his family in northwestern Pakistan and making enough to be able to take a few days off every three weeks.
But earlier this month, the 32-year-old sat on a street corner in an upmarket neighborhood of the capital next to his shovel and pickaxe as another day passed by with no work and nothing to look forward to but the corridor of a commercial building where he sleeps every night with dozens of other workers.
“I’ve barely made 3,000 rupees ($19) in the past two months,” Khan told Arab News.
“I voted for them (the current government) so that a man who can fix the system takes over, but I don’t know what is being done. There is no work.”
Amid a second wave of the coronavirus, analysts say that rising unemployment and double-digit inflation pose the biggest threat to the government of Prime Minister Imran Khan, who rode to power in the 2018 general election on the promise of fighting poverty.
In the South Asia nation of 208 million people, almost a quarter of the population lives below the poverty line, according to World Bank data.
Khan took over an economy facing a severe balance of payments crisis and sought financial support from China, Saudi Arabia and the UAE, as well as a bailout package from the International Monetary Fund.
But that was before the novel coronavirus pandemic struck, pushing millions more into joblessness and poverty. In a report that focused on COVID-19 and its impact on youth employment in Asia and the Pacific, the Asian Development Bank estimated in August that young Pakistanis could lose up to 2.3 million jobs due to the pandemic. Since October, an alliance of major opposition parties has drawn tens of thousands of people to nationwide rallies, tapping into growing dissatisfaction over the faltering economy and joblessness.
But Khan has said in several speeches and Twitter posts that he still believes the economy will recover — mostly on the back of a $500 million poverty alleviation plan known as Ehsaas, and a boost to the construction industry, particularly through the flagship Naya Pakistan Housing Program, which aims to build 5 million low-income homes and generate over 6 million jobs.
In a statement to Arab News, the information ministry said a package for the construction industry — which involves numerous tax breaks, subsidies and an amnesty program allowing people to invest their illegal wealth in the construction sector without having to disclose its source to authorities — would “mitigate the negative impact of COVID-19 on daily workers.”
“Growth in the construction sector will provide great impetus to overall economic activity,” the ministry said, “along with providing more job opportunities, thus reducing the poverty level.”
The finance ministry said in a separate statement that the benefits of the construction package will bear fruit once projects near completion.
Sohail Sarwar Jaura, of the Naya Pakistan Housing and Development Authority, told Arab News that construction in the program to build 5 million affordable homes will start this month.
“It took two years to complete legislation and now we are scrutinizing over 1,000 mega-schemes submitted by private sector builders for development of housing societies, some involving up to 5,000 houses,” Jaura said.
Around 2 million people so far have registered with the authority for low-cost housing, according to project managers. About 1.7 million of the applicants have been declared eligible and will get a subsidy of $1,900 for housing in upcoming projects, Jaura added.
“This construction package will further stimulate construction activities and create more job opportunities by providing a great impetus to auxiliary sectors such as aluminum, brick, cables, cement, steel, tiles, transportation and warehousing,” the finance ministry said.
But analysts are skeptical the project will help the economy or unemployed workers in the long term.
“There is some evidence to show this has worked in terms of creating employment,” said Khurram Hussain, business editor of Pakistan’s Dawn newspaper, commenting on the construction package and government schemes such as Naya Pakistan. “But the economics are dubious.”
He added: “The short-term boost will create a spurt of activity and employment, then it will die off and the assets you have created will sit there.”
However, Saqib Sherani, an economist and former member of the government’s economic advisory committee, said that the construction package is designed to “kickstart” economic activity and will bear fruit in due time.
“There are at least 40 allied industries that benefit directly from construction, and it is labor-intensive,” he told Arab News.
“The construction cycle of large projects is typically three to four years, if not longer. Even for residential houses, it’s around two years. Hence, I don’t think this is entirely short term.”
But a report by credit rating agency Fitch Solutions released in December predicted a major downturn in a number of sectors across Pakistan due to the second coronavirus wave. These include investment in construction from key economic partner China.
Daily wage laborers such as Khan also have few hopes.
Other workers gathered on the street said that employment opportunities had all but disappeared, with many complaining they found work only two or three days a week.
“We can’t afford to buy food,” one said.
“I will not vote for anyone next time,” Khan added, clutching at his shawl in the biting cold. “I can promise you that.”