Bracing for lockdown 2.0

Published November 9, 2020
Any planning for a lockdown has not been considered, conversations with officials and business leaders revealed. — Tanveer Shahzad/File
Any planning for a lockdown has not been considered, conversations with officials and business leaders revealed. — Tanveer Shahzad/File

Prime Minister Imran Khan has ruled out a countrywide lockdown as the second wave of Covid-19 hit Pakistan.

In Europe, several countries had to shut down as the surging number of cases and deaths in the absence of a vaccine left them with no option. One hopes Pakistan again manages to dodge the worst but if the mounting number of cases start threatening to overwhelm the health infrastructure, the extreme step might become inevitable.

The government and the private sector are in perfect denial and not yet ready to even acknowledge the existence of a grave possibility. Any planning for such an eventuality, therefore, has not been considered, conversations with officials and business leaders revealed.

Back in June, the government and multilateral agencies collectively projected the loss of Rs2.5 trillion to Pakistan’s economy owing to the pandemic-induced lockdown. GDP shrank from Rs44tr to Rs41.5tr in the last quarter (March-June) of 2019-20. About 2.5 million jobs were lost, millions more slipped below the poverty line with the closure of several hundred labour-intensive small enterprises and the suspension or scaling down of operations by big companies. The impact of the lockdown was calamitous on self-employed (plumbers, electricians, hairdressers, groomers, event managers etc), vulnerable daily wage earners and contract employees. Retail, transport, hospitality and grooming services were among the worst affected.

The government diverted a big chunk of $3.4 billion, received/saved in aid/payment deferment, to the private sector in concessions and subsidies to induce the revival of economic activity.

Beyond the stricter implementation of precautionary measures, the government and private sector have no idea how they intend to keep the wheels of the economy moving

With time, Pakistan adapted to the challenging reality. Many companies switched towards digitised solutions to minimise personal contacts. As the number of cases fell, the government gradually lifted the lockdown in July and life started limping back to near normal.

The desperate private sector responded well to supportive government policies and the pent-up local and export demand energised multiple sectors. Positive results of the last quarter (July-Oct) reported by listed companies reflect the pickup. The recovery, however, is fragile and has just started after an exhausting phase when another round of the Covid-19 challenge is staring the nation in the face.

In contrast to February when the first Covid-19 case was reported in Pakistan, exposure to personal losses, media coverage and strong phone messaging campaigns have spread public awareness of the disease and its precautions. It would also be easier to mobilise health professionals and provisions this time around if the situation demands. The digitisation of medical records and systems developed will also help. Humanitarian support networks may also perform better on the strength of lessons learnt earlier in the year. But is there a plan in place, public or private, to contain the economic losses if the outbreak again forces a great lockdown?

Beyond the stricter implementation of precautionary measures, the government and private sector had nothing concrete to offer in terms of how they intend to keep the wheels of the economy moving if the situation deteriorates in the period ahead.

Asad Umar, minister for planning and a key member of the premier’s kitchen cabinet who also chairs the National Control and Command Centre (NCOC) that synchronises efforts to manage the pandemic, was approached to get an insight into the government’s mindset.

Responding in writing, Mr Umar hammered the need to ensure that standard operating procedures (SOPs) set by the government are strictly followed. Sidelining the question on a shadow plan to keep the economy operational, he said: “The government will continue its smart lockdown policy during the second wave of Covid-19 without putting additional pressure on the common man. Now as the number of cases is increasing, lockdowns are being started.

“The government has once again launched an advertisement campaign on phone and TV. The NCOC has made the wearing of masks mandatory in public places, with fines and imprisonment for violators.

“The government is monitoring academic institutions and marriage halls. Fresh guidelines are being issued. It is considering to cut the attendance in offices to 50 per cent to ensure social distancing.”

Mian Anjum Nisar, president of the Federation of Pakistan Chambers of Commerce and Industry, did not consider the lockdown a plausible option in a country that is still recuperating from the ramifications of an earlier one.

“We simply are not in a position to suspend all activities. Pakistan can’t endure it. The government should identify hotspots and isolate them to contain the spread.”

He said he would run an internal exercise to solidify proposals to keep factories and markets operational before engaging the government that, he hopes, will control the impulse to act unilaterally. He was not aware of enterprises making provisional arrangements to retain labour within factories to keep units running in case of another lockdown.

Rana Sikandar Azam Khan, president of the Faisalabad Chamber of Commerce and Industry, said he held a session with members on the issue but dismissed the possibility of a lockdown. “We see no need to worry about flying assumptions. The prime minister has announced that mills, factories and markets will not be shut down again,” he said over the phone.

Shariq Vohra, president of the Karachi Chamber of Commerce and Industry, acknowledged the need for a viable emergency plan for businesses to cut losses in case the pandemic gets out of control in winter. “We were caught unawares last time but there is no excuse to not prepare now. I will immediately initiate the work on options, engaging all our members.” He saw the suspension of the IMF programme in Pakistan as a blessing in disguise. “The concessions and power tariff cuts granted by the government couldn’t have materialised had the IMF been in the picture.”

Malik Tahir Javed, former president of the Lahore Chamber of Commerce and Industry, believes another lockdown will prove disastrous. He said the government should lend support to businesses to claw back from the dark corner the last lockdown pushed them to.

“Resigning to fate and hoping for a divine intervention is hardly an option. People are already enduring the burden of economic mismanagement. The history will not be kind to the PTI if the self-absorbed team keeps itself occupied in petty issues in place of attending to survival challenges,” commented a watcher.

Published in Dawn, The Business and Finance Weekly, November 9th, 2020

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