It is silly to test the patience of despondent people in unsettling times. Individuals and businesses, currently, need gestures of reassurance and friendly policy interventions to ease the stress. The revitalisation of the economy will be harder if people are demoralised and business community disenchanted.

For Pakistan to turn the corner and post growth in the current financial year after sliding to new lows in 2019-20 is not going to be easy. The economy shrank by 0.4 per cent in 2019-20 as the pandemic paralysed it completely in the last quarter. The Sindh government took the lead but it would be unfair not to commend the federal and other provincial governments in somehow riding out the challenge and saving citizens from a horrid disaster that appeared imminent at one point.

The PTI government’s conduct in dealing with human and economic challenges since March when Covid-19 hit the country may be sub-perfect, but Prime Minister Imran Khan’s team did succeed in pooling funds and systematically disbursing quickly more than Rs100 billion amongst the needy through the Ehsaas programme. It also implemented multiple schemes of incentives for businesses to keep them afloat during the lockdown. These included the clearing of export refund claims to the tune of over Rs100bn and access to soft loans of Rs128bn to fund payrolls. The one-time cash transfer did not pull the poor out of poverty nor did the incentives shield all businesses from crashing. But it did provide some relief to people and businesses.

The ordeal, however, is far from over. The fear of the next wave of Covid-19 hangs over people as they get tired of restrictions and rush out to attend to pending chores. As the country emerges back from the lockdown and limps forward to regain what’s being lost while trying to adapt and readjust to suit the demands of trying times, the direction of government policies will play a crucial role. Common sense dictates caution and extreme care in policymaking as hasty steps leading to the further erosion of confidence can cause social unrest that would be hard to quell.

There is no point in fanning the anxieties in the civil service ranks over the issue of pensions

Seen in this context, the recent statement by the prime minister in which he declared pension liabilities more serious an issue than the circular debt was baffling. He cited the current federal pension budget of Rs470bn, inclusive of the pension outlay for military services, and posed it against federal civil servants’ salary budget. He was quoted as saying in the cabinet last week: “This amount (Rs470bn) is almost equal to the amount (Rs500bn) that we pay to the existing government employees as salaries.” Habitually, he blamed past governments for the mess and resolved to make pension liabilities sustainable under guidance of global experts.

The fact is that the pension bill of civil service retirees stands at Rs110bn currently and the remaining Rs360bn of Rs470bn cited covers the military retirees. The annual federal pension liabilities are currently nowhere equal but one-fifth of the salary bill. Does it mean that the pension system is sustainable? No, it is not but the Pay and Pension Commission is in place to suggest sustainable alternatives. The members of the said commission told Dawn that the body had yet to meet. As long as it deliberates and suggests viable alternatives, there is no point in fanning the anxieties in the civil service ranks and the pool of people dependent on pensions in the absence of an effective social security net in the country.

Seniors in Islamabad in the know of affairs blamed the finance team for the prime minister’s strong positioning on the issue in the last week’s cabinet meeting. “As long as the finance division in place of economic planning gets to drive the government agenda, issues of balancing public accounts will continue to dominate the more critical needs of capital formation and harnessing the development potential of Pakistan,” commented a member of the Pay and Pension Commission on the condition of anonymity.

“It is an empty statement creating avoidable animosity in the absence of a viable pension funding system,” said another expert from Lahore who earlier shared with Dawn a detailed draft note by the World Bank on pensions dated December 2019 that was presented to the government.

“The scale and scope of the pandemic shook the very foundations of the global order. The new normal is emerging, testing national leaders’ skill to adapt and adjust policies to help fear-struck individuals and battered businesses move on to partake in the process of economic revival.

“The biggest challenge is to rebuild trust and rekindle hope. Covid-19 spared no one but for economically and socially vulnerable sections, the experience of the past five months was horrid.

“Prime Minister Imran Khan must focus on ways to expand GDP, create employment and fund consumption to fire local aggregate demand to stir businesses into action paving the way for inclusive growth going forward,” commented an economist who is barred by his employer to air his views publicly.

There is uncertainty over what will work for sustainable recovery as Pakistan has never seen a global economic crash of this scale. No solutions are readily available. It’s time to rise above party lines and create a bipartisan forum or reactivate the Economic Advisory Group to draw from the global experience of recovery measures post-disasters and suggest strategies that prioritise people’s welfare and business expansion for an economic turnaround and building long-term resilience.

Published in Dawn, The Business and Finance Weekly, August 24th, 2020