New Delhi, Jan 10 (NationPress) The escalating issue of unemployment and economic stagnation in Pakistan is not merely due to a lack of innovative ideas or strategies. Instead, a report reveals that it stems from ten deeply rooted policy regimes that actively hinder job creation, productivity, and investment.

According to the report by Business Recorder, these policies primarily benefit a select group of powerful elites while distributing economic burdens among millions of citizens, rendering large-scale job creation unfeasible.

One major concern highlighted is the prevalence of a high-interest-rate environment, characterized by policy rates exceeding 20 percent, which has been perceived as a long-term solution.

This situation has allowed banks and major depositors to reap risk-free returns, yet it has severely impacted small businesses, startups, construction, and manufacturing sectors.

As credit availability diminishes, youth entrepreneurship struggles, and the burden of government debt servicing competes with essential development spending.

Transitioning to a growth-oriented monetary policy and implementing targeted credit for exporters, SMEs, and the agricultural sector could potentially generate around 1.4 million jobs, according to the report.

Another significant issue is the blanket withholding tax system, where turnover-based taxes are regarded as final taxes, punishing compliant businesses, pushing firms into the informal sector, and deterring investment.

The report advocates for a shift towards genuine income-based taxation and simpler digital compliance, which could formalize businesses and create an estimated 1.3 million jobs.

Furthermore, the report criticizes the long-standing protection in the automobile sector, where tariffs of up to 100 percent have sheltered a few assemblers for decades, leading to inflated car prices, weakened exports, and limited job opportunities.

Opening this sector to competition, with time-bound protection linked to localization and exports, could yield over 500,000 skilled manufacturing and allied jobs.

Additionally, the heavy protection and subsidies in the sugar industry are marked as another policy shortcoming, with guaranteed prices and export subsidies benefiting politically connected mill owners while squandering water resources, distorting agriculture, and draining public finances.

Redirecting land towards higher-value crops and food processing could create up to 760,000 jobs across farming, logistics, and agribusiness.

Lastly, the report identifies capacity payment contracts in the power sector as a significant drag on the economy.