Fazaila Shad
The Coronavirus (COVID-19) pandemic has shackled many of the local businesses and the local government. The whole world is facing a difficult situation. A lot of articles and reports appear in print, electronic and social media about coronavirus pandemic, but the federal government is failing to formulate a clear, effective strategy to end this crisis. The government is expecting people to isolate themselves voluntarily in a country like Pakistan, is unrealistic. Coronavirus is considered as a dangerous disease, because it can spread easily by person to person who does not show any symptoms of the disease. So any other person sitting next to you who may appear perfectly normal with no flu or cough may be infected and can spread it easily.
Corona virus affected 198 countries of the world. According to the BBC report, there are 1.4 million cases of corona virus are reported and more than 80,000 people have died. The most affected countries are the European Union countries, China, and Iran and United States of America. The consequences of this virus are devastated because the economic activities and external economic relations are disrupted. The magnitude of coronavirus is so large that many researchers suggested that the impact of this will be worse than the great depression. According to the Moody’s rating agency forecasted the 3 percent growth of the economy in 2020 is not possible now because there is a negative growth. However, conditions are unlikely to improve until 2021. Now the fundamental question is what will be the impact of corona virus on Pakistan?
Since 2017, Pakistan is facing a troublesome situation, be it energy crisis, Kashmir crisis, economic crisis, health crisis, security crisis, political crisis and media crisis. The factors which are making Pakistan economy even worse is the Indo-Pak relations, IMF programs, scrutiny by FATF etc. and the outbreak of coronavirus can devastate the whole scenario. According to an economic report Pakistan may face an initial loss of Rs 1.3 trillion in the wake of the outbreak of the coronavirus. It has now besieged the whole nation and economy of Pakistan.
The first death due to outbreak of the coronavirus was reported from Sindh and second from Khyber Pakhtunkhwa. Currently, more than 2000 cases are reported. The economic situation in Pakistan already presents a gloomy picture, because the growth momentum is slowing down. The agricultural and manufacturing sectors are exhibiting negative growth. Domestic trade and transports are in a recession and the major crops are likely to see significant decline. Currently, the Pakistani economy is unable to face the negative global growth caused by the COVID-19. The developed countries market is also exerting negative impacts on other countries.
To avoid the coronavirus government decided to lock down the cities and suggested citizens to avoid gatherings and prefer quarantine at home. The roads deserted and restaurants are closed, there is no sign of life outside the home. The lockdown to avoid this spread has both demand and supply related manifestations. According to the economic impact report on coronavirus the number of unemployment, workers will be 3.1 million approximately, and in case of curfews and lockdowns it will be 10.5 million expectedly. Furthermore, the situation of the economy depending on the duration of this incidence, and economic situation will need some time to recover.
The first and second quarter of 2020-21 may see a negative growth in the economy. “The economic situation in Pakistan is not the same as Europe or US, as 25% of the population in Pakistan is living in extreme poverty” —- Prime Minister Imran Khan
Prime minister Imran Khan in his first national address after coronavirus outbreak shows concern towards the Spread of disease and said that a national quarantine could result in “dying from hunger” literally , Khan is right as the economy is fragile and debt-ridden, because 220 million people cannot be fed for inculcate period of time. Thus, it is a difficult time for the government to cope up with the unbridled situation. Despite this, the government has announced the multi trillion rupees relief package, and 200 billion rupees for labor class.
China invested $62 billion in Pakistan under the CPEC (China Pakistan Economic Corridor) project. Despite being hit by the coronavirus itself, Pakistan’s entire weather ally China, also has lent a supporting hand. China is providing Pakistan much needed medical equipment and other goods at the provincial and government levels. The movement of people between two countries is also increasing; these include the students and entrepreneurs from Pakistan moving to China and the Chinese workers working for CPEC projects moving to Pakistan. On this side of Pak-china relationship involves citizens from both countries that have come under great stress during these days. Now, there is also a big question over Islamabad post- corona virus relationship with Beijing, which is conjoined in the shape of CPEC, One Belt One Road Initiative (OBOR).
In such pandemic situations the ongoing IMF program will also need to be re-negotiated because the Pakistan’s economy comes to a grinding halt. The unprecedented Corona Virus has already generated the stress in the capital markets. The social distancing is disrupting the capital formation, labor participation and productivity growth. This crisis is damaging the supply side where the availability of goods is limited in the markets. The battle is underway and the consequences can be devastated. As of 7th April no case of death is reported in China due to coronavirus, we hope the world is free from this pandemic disease as soon as possible. Dealing with this problem requires every ounce of creative energy and close coordination.
