By Samia Khalid ISLAMABAD, Feb. 23 (INP-WealthPK): The planning ministry has established two new divisions: growth & employment and policy review & coordination, with a view to achieving economic diversification, reform and employment-driven growth through enhanced private sector participation. Undoubtedly, Pakistan urgently needs a more sustainable and equitable growth strategy to help create employment by providing better chances for the almost two million young people who enter the workforce each year. The technical planning and implementation of the three-year framework for growth will be continually coordinated by these two divisions by taking a whole-of-government approach. The growth strategy intends to reorient private sector policies and incentive structures to boost competitiveness and productivity. Public-private partnership is just as crucial as a strategic roadmap to make such growth plans that boost productivity and competitiveness. Economic diversification has traditionally been employed as a tactic to promote positive economic development and growth. It is intrinsically related to economic growth and poverty reduction. Many developing countries’ success is linked to expanding the number and quality of employment in the face of a fast-growing and youthful workforce. It is also essential for industries that can absorb the growing labour force. In Pakistan, there has been some diversification of employment in the non-agricultural economy in recent decades. The proportion of non-agricultural employment, as well as macro and micro-level factors, impact the decisions to pursue a certain career path. Diversification of economic activity can be accomplished by investment and surpluses created by agricultural and non-agricultural employment. To compete in today's global market, emerging economies must diversify their economic plans and policies. China's economic growth and wealth is an evidence. Pakistan's economy flourished in the 1950s and 1960s as a consequence of its well-thought-out economic policies. Though much has changed since then, the importance of a planned economy with sufficient private sector participation has remained intact. In Pakistan, economic policies often ignore the fact that entrepreneurs, not governments, produce employment and wealth. To encourage economic recovery and private sector-led growth, Pakistan's authorities must address significant cross-cutting and sectoral obstacles. According to a World Bank research, a private-sector-led growth goal must be equitable and beneficial to Pakistan's numerous small and medium enterprises (SMEs). In Pakistan, the majority of enterprises are in the informal sector. According to estimates, undocumented economic activity accounts for between 25% and 35% of total economic output. The country has a substantial SME sector, which accounts for around 80% of the non-agricultural labour population and 90% of all enterprises, according to estimates. Approximately, 67% of urban employment is in the informal sector, with 92% of working women falling into this category. Despite its size and importance, the industry only accounts for 7% of all credit issued by financial institutions. The vast majority of formal enterprises are family-owned single proprietorships. Implementing a reform agenda focused on enhancing institutional capacity and policy coordination, strengthening competition and levelling the playing field, and facilitating the development of a diversified and inclusive financial sector can help policymakers increase private sector participation and investment in the economic activity.