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Covid-19: growing uncertainty and economic challenges

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By Raheem Sherazi

 

The whole world from South of North is under the grip of great fear of the coronavirus pandemic. It has not only generated panic all around but also resulted in an unprecedented impact in almost all spheres of life. International bodies like the World Health Organization (WHO) have recommended the simplest ways to deal with the health emergency in the wake of the outbreak of the pandemic. It’s vital to be amenable to adopt social distancing, take precautionary measures, like proper hand-washing and sanitization to protect yourself from coronavirus and other diseases.

The alarming situation is not just spread of the Covid-19 which has so far claimed hundreds of thousands of lives but also had a tectonic impact on the global economy. Millions of people have lost jobs and many more are on the verge to lose. This scenario will push society into a deep depression and anxiety. It’s feared that the incidents of suicide may increase if the world is not coming up with the plans to cope with an unprecedented economic crisis.

“Nearly 80 countries are already requesting IMF help to battle coronavirus. We stand ready to deploy our $1 trillion lending capacity”, said Kristalina Georgieva Managing Director IMF.

Will countries like Pakistan which are already burdened by a huge amount of debt be considered for such support? According to a latest report IMF has selected 40 countries for the bailout package but Pakistan is missing from the list. Pakistan has to pay back around $3 billion in three years. The IMF team will start the technical discussion with Pakistan on April 29th, as it has been reported.

Coronavirus has not only devastated the developing world but also the developed counties at large. As of April 14, over 2,006,513 people have reportedly affected with 128,886 deaths. The US, the most powerful country of the world has reported 618,923 coronaviruses positive cases with 27,112 deaths, followed by Italy where 21,000 people have lost their lives France reported 18,000 deaths and Spain over 17,000 deaths. As the research proves that people died the most who had a weak immune system or who are already infected by other diseases like tuberculosis, diabetes and respiratory infections.

What’s next?

What makes the pandemic more worrisome is the economic challenges as the crisis may push a large number of people to starvation. According to researchers and analysts, tourism and hospitality industry has almost collapsed. Airlines operations have come to a grinding halt; planes are grounded, hotels are shut, travel and tourism agencies are facing huge losses, seeking relief from their governments. UAE has announced a relief fund, for providing a loan without interest and reduction in all taxes.

The stock exchanges have crashed. Which means the aftershocks will remain there for a long time. The big economies like the US, the EU, Canada, Japan, China and the Russia will survive but the rest of the world will suffer. Pakistan is one of the countries which have fragile economies and faulty policies.

We live in a country which has a history with great leaders but never grasped any single chance to move forward with honesty and fairness. The reason is, most of the rulers came with short agenda or were circumcised not completing their terms to continue the journey towards prosperity. For example, to ensure the rule of law, stable foreign policy, economic policy, educational, health and governance had never been the priority of the rulers. That is why we always depend on the IMF, World Bank, Asian Development Bank etc.

Pakistan’s is an agro-based economy with dependence on import from the rest of the world. A farmer will not be able to grow more crops, people are stuck home, factories are closed and this situation will put people not only in fear but in a great depression. Our exports have almost come to a knot. Even in a normal situation our policymakers failed to avail and benefit from GSP plus to increase the export to European countries.

The students will suffer when they will not be able to continue their studies because there are no more business activities in the cities. People have lost their jobs. Thus, how they will cope with such a situation is a key question.

In such a situation, the federal government should announce a special package to respond to this crisis until the economic situation is back to normalcy and the business activities are resumed.

The increase of Rs1,000 to Rs3,000 for the beneficiaries under the BISP/Ehsas programme is insufficient for an average family comprised of 6 members. Besides the Ehsas programme, at least Rs25,000 should be announced for the workers for 6 months if not for a year. It will enable them to remain indoor and safe from coronavirus and afford essential commodities.

As we see, many countries have announced packages to their public in this crisis. Canada is one of them which has announced billions of dollars to cover debts of the public to meet their expenses. Thus, people will be able to cope with the situation as their government has the potential to offer such support.

But for the countries like Pakistan, such a situation is a real economic pandemic which will not be resolved until the international community provide them relief.

The only option to meet such challenges is to stop all the extravagance and promote saving mechanisms as well as making a small investment in the stock market and entrepreneurship. This is an opportunity to learn from the past follies and make the long-lasting policies for the future.


Raheem Sherazi is a freelance columnist. He can be reached at: noziyoun@hotmail.com

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