PESHAWAR: Khyber Pakhtunkhwa’s strategy for mitigating the impact of novel coronavirus (Covid-19) on its economy and job market has proposed a mix of administrative measures, subsidies and economic stimulus package.

Developed by the planning and development department as an immediate response to the crisis on the basis of an early assessment, it is likely to be fine-tuned afterward.

The strategy, which was released here on Tuesday, has analysed the impact of the pandemic on different sectors of economy, mitigation strategies and response mechanism.

Sectoral analysis of the provincial economy shows that the construction sector, which accounts for 13.7 per cent of the labour force would be the worst hit sectors because of job nature and activity.

“This sector relies on inputs from various other industries and most of the labour employed is daily wage and low paid. Lockdown will affect almost the entire sector,” it said, adding that the construction sector currently employs about 0.99 million labourers.

Document says economic growth to drop to 2.19pc, crisis to cost Rs19.78bn

Besides, the hotels are also worst hit sectors of economy as its entire workforce of 0.17 million is currently jobless.

The agriculture sector, which employs nearly 36 percent of province’s

labour force, has largely been unaffected by the crisis due to its nature and the fact that predominant majority of those associated with it does not travel to workplace.

The document said the only immediate concern would be the failure of farmers to take their produce to the market.

The agriculture sector employs nearly 2.34 million people in the province.

According to the document, the wholesale sector, which accounts for the second largest chunk of the province’s economy after the agriculture sector and has employed 1.08 million workers, is also badly hit by the crisis as markets and shops of non-essential items have been closed.

A short-term lockdown extending up to 45 days is likely to render nearly 1.3 million people out of work in the province.

The sectoral mitigation strategy said job losses in the agriculture sector would be insignificant.

“At five percent job loss, the affected people will total 116,927,” it said, adding that the loss could be easily mitigated by keeping fruit and vegetable markets, meat shops, grain markets, milk shops and kissan markets open.

Regarding the manufacturing sector, the document said it was a formal sector and therefore, layoffs would not significant in the immediate future. It added that a large number of jobless would be taken care of under the Ehsaas programme.

The document said a prolonged lockdown extending up to six months was likely to cause job losses of 2.7 million and job losses resulting from closures from six months to a year was likely to render 4.2 million people jobless.

It said the provincial government had options including top-ups to BISP beneficiaries through Ehsaas programme, additional short term safety net programme through district identification, tax breaks to certain industries, loan rollovers and delayed payment of interests on loans and deferred payment of utilities for small consumers.

The document said the province currently spent Rs33 billion for tackling the outbreak and mitigating its economic impact.

The strategy provides the support to the essential vital economic operations including maintaining of the supply chain of essential commodities through policy interventions and administrative actions, sustaining of the disposable incomes of households when faced with a loss of employment or curtailed business activity, sustaining of aggregate demand through income supplements to keep essential businesses producing, and supplying of essential commodities and continuation of the safe operations for jobs and incomes in limited cases.

The document said the province would spend funds to minimise the effects of the crisis on economic activity, livelihoods and the people’s wellbeing in the province.

“Keeping in view the higher vulnerability, the mitigation strategy is focusing immediately on the four labour categories, which include estimated 3.04 million daily-wage workers, 1.40 million paid workers by piece rate or work performed, 0.07 million paid non-family apprentice and 0.15 million street vendors,” it said.

The document said the province’s economy was estimated to be growing at the rate of 3.73 per cent but the growth was likely to slump to 2.19 per cent in light of the Covid-19-induced crisis, which was to cost the province Rs19.782 billion.

Published in Dawn, April 15th, 2020