Mohammad Saeed, 55, father of six and a construction labourer, waits for work during a lockdown in Karachi. — Reuters

Ease lockdown or face economic deprivation: What should countries like Pakistan do?

"Containment strategies in developing world must weigh Covid-19 health risks against deprivation," says report.
Published May 9, 2020

As the coronavirus pandemic continues to wreak havoc, governments all over the world are facing a catch-22 — either continue to impose strict lockdowns forcing populations to stay home and thus face economic devastation or ease curbs to spur economic activity and thus cause a health system collapse and deaths in the thousands.

This dilemma is heightened even more so in countries like Pakistan, which have weak health systems and where large parts of populations live below the poverty line and daily wage labour is essential to the survival of millions.

A United Nations report in March had predicted that developing countries, including Pakistan, will be hit hardest by the economic shockwaves caused by coronavirus lockdowns.

Pakistan, Argentina and the Sub-Saharan African countries would face a “frightening combination” of crises including mounting debts, a potential deflationary spiral as well as a disastrous impact on the health sector, the report said.

Meanwhile, other reports have shown how sustained lockdowns can lead to hunger in countries such as Nigeria, which like Pakistan, have a huge proportion of the population relying on daily wage income.

No one-size-fits-all solution

In a media briefing last month, World Health Organisation (WHO) Director General Dr Tedros Adhanom said:

“In countries with large poor populations, the stay-at-home orders and other restrictions used in some high-income countries may not be practical.”

“How do you survive a lockdown when you depend on your daily labour to eat? As I have said many times, physical distancing restrictions are only part of the equation, and there are many other basic public health measures that need to be put in place.”

Dr Tedros had requested governments in developing countries to assess their situations and take decisions to protect all their citizens.

“In most high-income, developed countries around the world, stay-at-home orders have been a cornerstone of the coronavirus response. But a one-size-fits-all approach doesn’t necessarily fit very well with the needs of the developing world," according to a Vox report.

Lee Crawfurd of the Centre for Global Development, a London-based think tank that studies policy in the developing world, told Vox that “countries are just doing what seem like the official things even though the same approach [strict lockdowns] causes different problems.”

“It seems like there’s a bit of global mimicry.”

A recent policy recommendation report published by the International Growth Centre (IGC), an economic research centre based at the University of Oxford and the London School of Economics, also said that “policy responses in developed countries to the Covid-19 crisis do not provide a good model for developing countries.”

“The imposition of extended blanket lockdowns risks causing widespread deprivation and unintended health consequences in developing countries, which are also experiencing sharp drops in commodity prices, remittances, tourism and trade and have limited fiscal and institutional capacity to support vulnerable households.”

How to resolve this catch-22

In its recommendations for developing countries, the IGC report ֪— which has been signed on by 37 of the world’s leading economists — recommends a “smart lockdown” for countries with large populations living under poverty. Under that, “local governments collaborate with national governments to impose and lift lockdowns locally — while analysing local and regional data on both the spread of the virus and the economic impact”.

These decisions, the report emphasises, should be based on data, without which it says “Coivid-19 cannot be fought”.

“Policy decisions regarding when, where and how to impose and lift restrictions require data on prevalence, trends and transmission. Data is also necessary to assess growing risks of deprivation or even hunger.”

Dissuading poor countries from “imposing a uniform national policy”, these economists suggest focusing on containment strategies which allow “interactions that do most to reduce economic deprivation”.

While the report recognises the importance of supporting livelihoods via direct handouts to individuals where feasible, it adds that in low income countries, where social protection for the poorest is minimal, the problem needs a different solution.

“Support from the international community is essential. But it is only a partial solution, not least as poor countries have limited capacity to deliver support directly to those worst off, especially where the newly vulnerable are different from traditional beneficiaries.”

Thus it recommends policies aimed at enabling individuals to continue to be active economically, both in the formal and informal sectors.

Read the complete IGC report here.