It will not be easy for the governments in the centre and four provinces to shake off the blame for the lack of preparedness to contain the economic fallout of a pandemic that can squeeze the life out of the poor people even if they succeed in dodging the virus.
With the mounting stress in markets around the globe, the pandemic is proving to be as infectious economically as medically if not more.
Pakistan’s inaction and complete neglect of the economic side of the pandemic challenge have exposed again the disconnect between the state and society. The discontent of the business community of Balochistan is spilling over in streets already. The border closure has dealt a crippling blow to the fragile economy of the restive province. The province shares a long border with Iran and Afghanistan and depends disproportionately on cross-border trade. Some believe that its economy is integrated more with neighbouring countries than with the rest of Pakistan.
The decisive actions of the health establishment to deal with the coronavirus has pleasantly surprised the nation and contained the spread of the disease so far but the apathy and inaction of the economic ministries at the federal and provincial levels are appalling. The conduct of the empowered provinces was more troubling as they appeared as distant from the economic reality as the federal government, weakening the merit of the devolution debate.
It is not rocket science. In the case of pandemics, it’s a race against time. The scale of loss to lives and livelihoods depends on the swiftness of action and the quality of strategy adopted to deal with the medical and related economic emergency in the modern globalised world.
In Pakistan, that boasted its close partnership with China particularly since the ‘Belt and Road’ thrust, sadly three months have passed but the government continues to grope in the dark when it comes to monitoring/assessing the economic impact or developing possible sets of strategies.
The country needs a fact-based strategy and an action plan. The meeting of the National Security Council did take the required policy decisions but did not address the economic side of the challenge.
We need a strategy that can ensure the steady supply of resources for a medical emergency and minimise the impact on livelihood and businesses. For the record, the outbreak of the coronavirus in China was reported on Dec 1, 2019.
While babus (bureaucrats) shuffle in an endless number of meetings in the federal and provincial capitals, people and businesses are scrambling in nervousness to cut losses and shield themselves from the adverse economic impact.
The development partners put out an initial startling assessment weeks back but it failed to grab the attention of economic planners in Pakistan.
The Asian Development Bank has projected a loss of $5 billion to the Pakistan economy in case of a major outbreak. It would sink the GDP by 1.5 per cent and trigger joblessness, depriving 946,000 of their livelihood. The bank expects the private businesses to be hit the hardest, losing as much as $1.9bn, followed by agriculture and mining that may take a blow of $1.5bn, hotel and restaurants $254 million, light and heavy engineering $671m and transport $566m. In the best-case scenario, the loss could be contained at $16.2m and in a moderate-case scenario, Pakistan could suffer a $34.2m impact.
The International Monetary Fund mission reportedly shared concerns over the spillover effect of China’s slowdown on the closely linked economy of Pakistan but their warning was dismissed by the ruling PTI’s economic wizards as baseless.
Reacting to threats of a global recession, the World Bank has committed $12bn in aid for emergency packages including low-cost loans, grants and technical assistance for developing countries to shield them from an economic impact.
The World Economic Forum last week announced the creation of the COVID Action Platform that aims to engage the business community to leverage its expertise, innovative ideas and resources for collective action to protect the livelihood of people and facilitate business continuity.
In response to requests for comments from planning minister Asad Umar and other members of the PTI economic team, Dawn received a brief note from Zafar ul Hasan, chief of the macroeconomic section of the Planning Commission. “Initial assessment of the economic impact of coronavirus is being done. Data and feedback are being collected from the ministries for analysis and evaluation. The preliminary assessment would be concluded shortly,” the message reads.
Taimur Saleem Khan Jhagra, finance minister of Khyber Pakhtunkhwa, told Dawn over the phone from Peshawar that the government is doing all in its power to protect the people of Pakistan from this global contagion. “We are learning and readjusting our response to suit the situation.” Talking about the economic impact, he mentioned disruption in a project in KP as China halted the shipment of solar panels but beyond that, he thought the situation was broadly normal. He mentioned capacity issues in initiating a study on the possible economic impact on the KP economy.
None of the other provincial leaders came on record on the issue. The senior officers in the provincial hierarchy told Dawn that nothing has so far been done and the economic ministries are busy in the budget exercises for the next year. An officer of the Punjab government said that the planning and development department had been approached last week to gauge the impact on Punjab’s economy.
“It will take at least 10 days to get some sense. So please focus on the federal government till that time,” he said. In Sindh and Balochistan, till the filing of this report, there was no movement on this account, the relevant officers confirmed.
Raheem Kakar of Anjuman Tajiran Balochistan was fuming while talking to Dawn. “We are starting protests as our losses are now running into billions of rupees. There are several thousand trucks jammed on either side of the Afghan border.
Shops are getting empty in cities because of the suspension of supply. The situation is getting uglier but the government doesn’t appear bothered.” Traders of Chaman and Taftan expressed similar sentiments.
Khursheed Nizam, CEO Economic Gateway, the biggest private exhibition company that holds 65 of the total 150 international trade exhibitions held in Pakistan in a year, was disturbed but saw the pain as an outcome of a natural calamity. He pleaded for exemption from the penalty for the abrupt cancellation of venues and urged companies to go digital.
Published in Dawn, The Business and Finance Weekly, March 16th, 2020