While making our new year resolutions, none of us ever imagined that in three months' time, we would be living in a new world with unknown fears and apprehensions. Covid-19 took the world by surprise and while we have seen the Ebola and the Sars epidemics, both were limited in scale and geographical spread and were controlled in a couple of years with a decent global response. We have also heard of the more disastrous pandemics like the Spanish flu of 1918 or the 14th century Black Death pandemic in Europe. Hopefully, Covid-19 will be far less damaging, but it will surely change the way people and countries interact with each other in a post Corona world.
The thought leadership on Corona in Pakistan is divided into two broad groups. One group is confident that Pakistan is different from a number of countries suffering severely from Covid-19 and so they point to the idea of a low mortality rate, of less exponential growth in cases (though of course that also depends on the number of tests conducted), climate, demography, and a possible immunity due to having dealt with malaria or TB, as some of the possible reasons they believe Pakistan will manage to sail through this crisis better than most developed countries.
There is a second group though which is pessimistic about the future and considers it a matter of time before the reality of the pandemic kicks in — and hits us badly. Their line of reasoning is international evidence from China, Italy, UK, and USA, and the idea that the case of Pakistan will be no different from these countries.
While we can all hope that the preceding group turns out to be right, hope can never be a strategy. So, what should Pakistan do? The response to Covid-19 can be divided roughly into an overarching one, encompassing health, social safety, and the economy. While health and social safety responses need to be immediate, the economic response should be geared towards the medium and long term.
Effective coordination, evidence-based decision making and strategic messaging
Three overarching issues are central to managing any disaster. The first of these is coordination among various arms of the government. While there is a national coordination committee, NDMA, provincial cabinet committees etc. to coordinate the Covid-19 response, we do not see enough coordination among various arms of the federal government, between the federal and provincial governments and among various arms of provincial governments and the districts.
The newly-established National Command and Control Centre is borne out of this frustrating lack of coordination and will hopefully prove to be one of the most important decisions we took while fighting this pandemic.
At this point, the government should go ahead with establishing provincial command and control centres to improve coordination between the federal and provincial governments. The government will eventually establish these provincial centres but the earlier this is done the better. These centres can be established within the setups of the national and provincial disaster management authorities and should meet on a daily basis to understand issues, take decisions and ensure implementation.
Second, evidence-based decision is critical as is our need to have the data to be able to do so. The government should immediately establish a nerve centre, focusing on data collection and analysis. This centre can comprise of the National institute of Health, the NADRA, the Pakistan Institute of Development Economics, the prime minister's complaint portal, the Punjab IT Board, and other relevant bodies. This centre should solely focus on numbers and it should be able to develop possible disease scenarios and data modelling, as well as economic impact scenarios etc. and routinely churn out data analysis to be used by the National Command and Control Centre and other arms of the government.
Third, strategic communications and messaging is key to winning this battle. We are in this for a long haul and this will test our patience. So at this time, uniform messaging from all governments on issues ranging from social distancing to religious congregations is critical. Hopefully, the National Command and Control Centre will be able to develop a semblance of harmony in these messages across all governments.
The health response
On the health response, thankfully all provincial governments are already quite ahead of the curve and this is important because in the end health is a devolved subject and a provincial responsibility. While the international nature of Covid-19 and a vibrant social media has already created substantial awareness on social distancing and preventive measures against Corona, governments should now focus their awareness campaigns on urban slums and rural Pakistan where strong cultural and religious norms may still be keeping people away from embracing the new norms.
Coupled with enforcement by governments, social distancing will give our health authorities some breathing space to better equip themselves. At the same time, governments should ensure that our heakth professionals are protected and are provided with personal protective equipment (PPE). This is key as no battle can be won without able-bodied soldiers.
The focus of the federal and provincial governments now needs to be on testing and procuring diagnostic kits. Pakistan collectively has done some 35,000 tests. In comparison, 15,000 tests are being conducted daily in New York, while UK is now boosting its capacity to 100,000 tests per day. And yes, we all understand that Pakistan is a third world country but if we don't test, we will not be able to isolate carriers and those who are affected. Ultimately, failing to do enough tests in time, means even stricter lockdowns will fail in achieving the objective of flattening the curve.
Another thing we need to do simultaneously is procure ventilators. Pakistan has an estimated total of less than 5,000 ventilators for a population of over 200 million. In comparison, UK has over 12,000 ventilators for its 67 million citizens. Besides tertiary hospitals, we will also be needing smaller ICUs with ventilators in our primary and secondary hospitals, along with people trained to run those machines.
Social safety nets
The government has already announced the expansion of the Ehsaas beneficiaries to 12 million from five million. This is a commendable step however the government will still be grappling with people who are just above the poverty line, people like daily wagers, rickshaw drivers, small vendors etc who have lost their livelihoods owing to Covid-19.
The challenge is not disbursing to those already registered with federal and provincial social protection authorities who can be provided support with a click of a button, it is to reach and provide financial support to the additional seven million or probably more under the Prime Minister’s package. These people are still not registered, they may not have bank accounts, they may not even have national identity documents etc. and this is all while the time is fast ticking. At the same time, one can sympathise with Prime Minister Khan when he talks about the impact of lockdowns but unfortunately evidence suggests that the costs of not locking down may be higher.
To mitigate the hardship of this section of the population, the government's objective should be to disburse money and not rations and that too without creating crowds. The government has already allowed self-registration of daily wagers along with their national identity records and Nadra should be able to do background checks on these. It can also institute a mechanism at least in the short run where a person takes her/his original national identity document to mobile money outlets and the shopkeepers can disburse the money after verifying the identity and validating eligibility and allowance through an instant message between her/him and a Nadra contact person at the time of transaction. There is a risk of corruption however we need to weigh that against the much greater risk of people remaining without any means of sustenance for a long time.
The other thing the government can do is to immediately waive utility bills below a certain threshold as low bills are a decent proxy for poverty and these constitute a major monthly expense for poor households. In fact, the government can actually renegotiate with IPPs to adjust some of the mandatory capacity payment against these waivers as part of their corporate social responsibility.
And, if the government intends to give out rations to the poor, it should develop a very efficient system of mapping and distribution and employ assistance from the local police as well as the armed forces.
The sooner these social safety measures are implemented the better it will be as Pakistan is already in a state of lockdown for over 10 days now.
In the long run, we will need our economy to sustain through the current hardship as well as any similar scenario in the future. Economists are predicting Pakistan’s growth to hover around 1-2 % in the next year and our revenues to hover between Rs4-4.5 trillion, much lower than earlier projections.
The US has gone to zero percent interest rate and UK to 0.25% to boost their domestic demand and economy. In Pakistan too, the government has already taken some bold steps, however, probably more stimulus is needed to jumpstart the economy. The State Bank of Pakistan has recently lowered interest rates by two percentage points but it is still hovering around 11%. It would be advisable to bring interest rates further down to single digit to boost investments. Yes, it may lead to some cash outflows as well as some inflation but it may substantially ease the pressure on businesses.
It is also critical that the government focuses on SMEs as they are the hardest hit by this crisis due to lack of liquidity and limited access to finance in the first place. The government should allow special concessions for these enterprises, such as substantial tax breaks, low utility rates, etc, not only to boost their productivity but also for them to have enough support to become a substantive employer in these tough times.
On the fuel prices front, while the government has reduced these, the same should be done for utilities which have fuel costs as a major input. These measures will have a double impact of not only boosting the economy but also of supporting the poorest households by cutting some of their key expenses.
Lastly, the government has taken some excellent steps to boost construction industry through providing tax breaks and subsidies as construction industry is known to impact many subsidiary industries besides providing substantial low-end employment opportunities. The government should further promote mega projects like Naya Pakistan Housing Scheme besides commissioning new mega road network projects to boost domestic demand and tackle unemployment.
One can ask where all the money for these relief measures would come from? This is difficult to answer. In the short run, the government will have to go to international financial institutions but in the medium and long term, it is about two things. One, value addition and diversification of our exports and two, fixing up our shamefully low tax to GDP ratio. This is our only way to becoming a self-reliant nation.
Nothing is rocket science except rocket science and it's the clarity of plans that eventually matters. In the end, we can hope that due to climate, demography, cross immunisation, we survive this pandemic better than others, however we need to be prepared for less than the best outcomes.