Prime Minister Nawaz Sharif at the World Economic Forum on Friday claimed that his government was transforming its human capital into a driver for development by empowering its youth and providing them with loans to encourage self-employment. Perhaps our premier is not quite aware of the alarming situation of unemployment that plagues his term in office, as the macroeconomic data for the fiscal year 2015 shows that the unemployment rate had risen to 8.3%, the highest in 13 years.

The unemployment rate has risen for each of the Nawaz Administration’s two years in office, and the number of unemployed people is now 1.5 million higher than when Prime Minister Nawaz Sharif was sworn into office in 2013. The even more alarming forecast is that if the government fails to meet its economic targets for the fiscal year 2016, the ranks of the unemployed are expected to rise by another 400,000 people, making Mr Ishaq Dar’s job extremely difficult when he will have to answer for the government and what it has been doing for the past two years to create this disturbing situation.

Chief Minister Shahbaz Sharif has thus announced Rs 40 billion to be distributed in interest-free loans among two million people during the next three years to make them self-reliant under his Self Employment Scheme. The CM might think it a brilliant plan considering it is working so well for the NGO Akhuwat, which is based on a microfinance model that has become wildly successful and is taught at top business schools around the world. Akhuwat has already disbursed over Rs 3.3 billion to 23,335 families all over Pakistan since 2003. Notably, the recovery rate for loans of Rs 3.3 billion that have been disbursed so far is an astonishing 99.83%, a feat that is only possible because they have a great check and balance system, one that is completely non-existent in the government lending scheme. The NGO is transparent and has very strict criteria for lending and reimbursement, and any losses are its own, not the taxpayers. The government, susceptible to corruption and devoid of a capacity to monitor new businesses will not be able to make a success of such a scheme and it has failed with similar schemes in the past. The government needs to create real jobs and employment instead of just handing out cheques to feel good about itself.