QUOTING research carried out by Pakistan Institute of Development Economics (PIDE), Minister for Planning and Development Asad Umar claimed on Sunday that between 20 million to 70 million people could fall below the poverty line, while 18 million people could also lose jobs due to the lockdown forced by the outbreak of Covid-19. Speaking at a news conference at the National Command and Operation Centre (NCOC) he also pointed out that a recent survey by Gallup showed that one in four Pakistanis saw reduction in their diets because of the virus factor. He maintained that the virus was not as fatal in Pakistan compared to other countries but its economic impact was worse.
The research done by PIDE has given an indication of the possible scenario in case of low, medium and high impact of the virus and the resultant lockdown on the national economy and not a ground reality. Like possible impact of the situation on poverty, the institution had also given projections of layoffs in three stages based on limited, moderate and complete restrictions and what we actually saw was partial lockdown which was also not strictly observed and now that too is being undone in a phased manner. Reference to a study presented to the Government about three weeks back is apparently aimed at sensitizing people about the possible impact of the crisis and convincing them that the policy of the centre about the option of lockdown is prudently based. However, the ground situation is also not encouraging as the spread of virus led to temporary closure of industrial units and businesses and as a consequence many of them have resorted either to the option of lay-off or non-payment/reduction in payment of salaries to their employees. The revelation of the Minister that the tax collection fell by hefty Rs.119 billion in a month is also understandable as the economic activity was at a standstill. However, the study of the PIDE and figures quoted and apprehensions expressed by the Minister necessitate a robust strategy to minimize the impact and move towards normalization of the situation with due care. PIDE had also advised the Government that it was a war even though against an invisible enemy and it must plan and manage it as a major national security threat on war footings.
The Government has, more or less, followed by guidelines given by PIDE but there are some long-term measures proposed by the study which should also be considered seriously as implementation of these could help us guard against unsustainable pressure in future. It is also satisfying that irrespective of its public pronouncements; the authorities are not in a rush to reopen each and every sector. The stand adopted by Asad Umar was based on reality as he firmly stated that the government could not “open everything and ease the lockdown completely” because it would overburden the healthcare system. In this regard, he also referred to two most important factors ie the number of beds in intensive care units (ICUs) and the number of ventilators which are not enough to cope with a dramatic increase in the number of serious patients. As the Government would review the policy of easing restrictions beyond 09 May, it should take all stakeholders on board to evolve a consensus strategy as piecemeal approach would not deliver. Previously, Sindh Government has prepared saner SOPs for opening of different industries and businesses and these could serve as guidelines for the entire country. Similarly, Punjab Chief Minister Usman Buzdar has now proposed opening of textile, garments, sugar mills and other 35 industrial units and the list can be debated and SOPs improved to return gradually to normalcy. After opening of the construction sector, some related industries and businesses have to be allowed to resume their activities to fulfil needs of the construction sector. The economic think tank of the Government, headed by Advisor on Finance Hafeez Sheikh, is also engaged in brainstorming sessions on how to overcome the challenge thrown by the virus. The policy of cutting down the interest rate further and making annual development plans responsive to labour intensive propositions has the potential to pay back but it has to be seen what the Government actually does at the time of presentation of the coming budget.