Coronavirus and the economy
RECENT ADB estimates suggest that Pakistan’s economy could suffer a loss of up to 1.5pc in its GDP growth rate due to the fallout from the spread of the novel coronavirus, while the capital markets have already been roiled by a strong bout of volatility due to mounting fears and anxiety.
World oil markets are seeing a sharp fall — according to some reports the sharpest drop in oil prices since 1991.
This has driven down oil-related stocks that carry heavy weightage in the KSE 100, such as OGDC and PPL, both of which hit their lower circuit breakers on Monday.
In addition, some estimates suggest the global aviation industry could see up to $113bn worth of revenue losses as a result.
Global supply chains have been disrupted badly because of the massive shutdowns in China that have either closed down industries altogether, or disrupted the return of workers from the new year holidays to the point of creating acute labour shortages in industrial areas that are not directly impacted by the shutdowns.
In every sphere, from travel and aviation to shipping and transport as well as oil prices and capital markets, economies around the world are seeing sharp downswings as a result of the fallout from the efforts to contain the spread of the coronavirus.
There are reasons to be concerned here in Pakistan as well.
At the moment, there are no indications emerging of a widespread outbreak of the virus.
But each day the number of people diagnosed positive is rising, albeit slowly, and there is no way of knowing how far this is going to go.
Besides the obvious public health emergency this poses, the fallout for the economy needs to be taken stock of.
Some people think it is a positive sign that Pakistani exporters are picking up the orders that might ordinarily have gone to China and exports could see a spike in the months ahead.
But it would be terribly shortsighted to find much comfort in this fact.
If the shutdowns persist and spread, it will also seriously impact the scale of demand for Pakistan’s traditional exports, such as garments.
Beyond that, the sharp fall in the value of oil-related stocks means the divestment of OGDC shares that was planned in the next few months will have to be postponed, and the privatisation programme will need to be shelved since global buyers are in no mood to extend their stakes while the uncertainty persists.
It is not known how far the phenomenon will go and how many shutdowns we will have to see around the world and for how long.
In this environment, an economy such as Pakistan’s, which is struggling to emerge from the crippling effects of a macroeconomic stabilisation programme, will face far more challenges than opportunities.
IN a landmark judgement, the Islamabad High Court has termed the NAB chairman’s arbitrary powers to order arrests as contrary to the fundamental rights guaranteed under the Constitution. This observation was part of the detailed judgement on the bail petition of officers of the Pakistan Telecommunication Authority. The judgement says “there must be sufficient incriminating material to justify arresting an accused…” and that “mere allegations of misuse of authority would not justify depriving an accused of liberty because an irregularity or wrong decision sans criminal intent, mens rea and illegal gain or benefit does not attract the offences”.
This judgement could not have come at a better time. Over the years, it has been established without doubt that the sweeping powers of arrest given to the chairman of NAB by the NAB Ordinance have been used recklessly and often on flimsy grounds to incarcerate citizens. It has often transpired that NAB investigators could not produce any substantive evidence against the accused even after keeping him or her in prison for long periods of time. More often than not, NAB prosecutors could not convince the judges why they needed to keep an accused in prison when the detainee was willing to cooperate with them in the investigation. The abuse of this power of arrest manifested itself at various levels: first, NAB exercised the power even when the charge against the accused did not justify an arrest; second, NAB kept the citizen in jail even when investigators could not come up with evidence that could hold in court; third, NAB insisted on contesting the citizen’s bail application despite failing to come up with any logical reason for keeping him in jail. The abuse of this power went against the basic rights of the citizen but there was little relief for the accused. The draconian law and its rampant enforcement, often against those finding themselves on the wrong side of the government of the day, spread panic and fear across society. The IHC judgement should now curtail this abuse of power and lead to greater prudence in pursuing arrests of the accused. It should also embolden citizens and civil society to push back against NAB’s encroachment on their fundamental rights. The judgement has reinforced constitutional protections and will hopefully force accountability authorities to exercise their powers within the ambit of the Constitution. This should also spur parliament to bring about necessary amendments to the law to evolve an even-handed accountability mechanism.
SEVERAL days have passed since the tragic Gulbahar building collapse in Karachi; bodies continue to be retrieved from the rubble; and the death toll keeps rising with each passing day. On Saturday, a teenage boy was miraculously found alive during the search-and-rescue operation. Others were not so lucky, with eight bodies, including children and the elderly, pulled out from underneath the debris on Sunday. At the last count, 27 people had been confirmed dead, including seven members of a single family. The building is believed to have collapsed when the owner, who now has an FIR registered against him, began “illegal” and “unauthorised” work: first by constructing an additional floor, and then by building additional pillars to strengthen the foundation after cracks began to appear in the edifice. Such tragedies are all too common, particularly in the poorly planned, congested cities of the country. In January, a four-storey building collapsed in Sukkur, leading to the death of several people. Prior to that, another building collapsed in Karachi’s Ranchhore Lines area. Despite repeated instances, lessons are not learnt, and as one expert put it, these buildings are “ticking time bombs” for the residents living inside them. Moreover, such tragedies are entirely avoidable, and the direct result of greed and incompetence on the part of builders and building control authorities that turn a blind eye to or even abet such careless construction work.
But there has been criticism of the rescue operation as well, with residents taking to the streets to protest over the slow place and apathy they were made to witness in recent days. One cannot help but wonder how many more lives may have been saved if the rescue efforts were carried out in a swifter manner. According to the protesters, there are still people — possibly alive — underneath the ruins of the fallen building. Whatever excuses are offered this time around, Karachi’s residents have every right to be angry.