Coronavirus pandemic is a disease caused by severe acute respiratory syndrome corona virus-2 (SARS-CoV-2). This pandemic has far reaching medical, economical, environmental and industrial implications. Novel Coronavirus pandemic has led countries like Pakistan under sheer pressure where there are already high levels of poverty and hunger. Its spread has left businesses around the world counting the costs. Pakistan reported first case on Feb 26, 2020 and as of today, the total tally is 66’000 plus.
220/ I can confirm first two cases of corona virus in Pakistan. Both cases are being taken care of according to clinical standard protocols & both of them are stable. No need to panic, things are under control. I will hold press conf tomorrow on return from Taftan.— Zafar Mirza (@zfrmrza) February 26, 2020
Preventive measures taken by the government
Nationwide lockdown in Pakistan was initiated on 1st April 2020, later extended twice. The government prohibited several activities in the country by imposing lockdown: land borders, schools, colleges, mosques and other worship places, public transports including intercity bus services, trains, international flights, industries, and local markets were closed (except grocery stores for a specific time during the day, pharmaceutical stores and fuel stations), all cultural and social gatherings banned. All of this has brought Pakistan’s already suffering economy to a grinding halt.
Gross domestic product (GDP) is the most commonly used single measure of a country’s overall economic activity. It represents the total value at constant prices of final goods and services produced within a country during a specified period, such as one year.
The average consumer price index (CPI) is a measure of a country’s average level of prices based on the cost of a typical basket of consumer goods and services in a given period. The rate of inflation is the percent change in the average CPI.
- Pakistan’s 2020 Projected Real GDP (% Change) is -1.5.
- Pakistan’s 2020 Projected Consumer Prices (% Change) is. 11.1.
Ever since 2005, Pakistan’s GDP was growing at a rate of 5.0%.Trading Economics.
The IMF has already said that Pakistan’s economy will fall into recession in this fiscal year and growth is expected to contract by 1.5% before it recovers to 2% in the next fiscal year. The International Monetary Fund (IMF) has given Pakistan a 3-year loan of $6 billion, on request of Prime Minister Imran Khan to help revive the country’s devastating economic crises. The current debt of IMF on Pakistan is about Rs 18.17 trillion owned by the government for domestic creditors and almost 1.378 trillion is owned by Public Sector Enterprises (PSE).
“The current coronavirus outbreak is the biggest challenge for the world since World War Two“.António Guterres, Secretary General United Nations
Economic outlook and trade barriers
Pakistan is one of those countries which depend on their exports for economic stability. Pakistan mainly exports its goods to countries like China, USA, France, Italy, Spain, and Germany. Coronavirus has proved deadly since the first fatality was reported in China, more than 6 million cases are reported worldwide after that. This has led to the devastation of economies of all major export destinations of Pakistan. Here is a brief outline of Pakistan’s top 10 exports according to data of 2018, with the percentage share each export category represents in terms of overall exports from Pakistan.
- Miscellaneous textiles, worn clothing: US$4.1 billion (17.1% of total exports)
- Cotton: $3.5 billion (14.9%)
- Knit or crochet clothing, accessories: $2.9 billion (12%)
- Clothing, accessories (not knit or crochet): $2.6 billion (10.9%)
- Cereals: $2.4 billion (9.9%)
- Leather/animal gut articles: $662.7 million (2.8%)
- Sugar, sugar confectionery: $519 million (2.2%)
- Mineral fuels including oil: $499.5 million (2.1%)
- Beverages, spirits, vinegar: $453.1 million (1.9%)
- Salt, sulphur, stone, cement: $445.4 million (1.9%)
Pakistan’s export declined by 15.5 percent, bringing the total export volume down to 157412 million PKR after Coronavirus Pandemic.Pakistan Bureau of Statistics
Turning crisis into opportunity
Pakistan can easily turn the tide in its favour by adapting a few simple steps. Its a bit hard but not impossible;
- Export oriented industries (like glass, paper, fertilizers, cement, chemicals, machinery and food production) should be exempted from lockdown.
- Small businesses should be exempted from taxes for this financial year.
- Interest free loans should be provided to businesses with bail out packages to avoid bankruptcy and un-employment.
- Improvement of healthcare infrastructure on federal and provincial levels.
- Pakistani exporters must develop smart strategies to overcome the adverse crises by targeting those products that are needed in these crises but are within the range of their core competencies for example textile exporters successfully shifting towards the production of personal protective equipment and facemasks may result in a spike in their export activity.
- Local pharmaceutical industry should be given incentive to produce life savings drugs (especially Remdesivir & Actemra), locally, which can be exported in future.
Measures for economic revival
Although Pakistan’s economy suffered a major set back due to this pandemic with a growth rate of only 3.3%. Pakistanis are also taking steps to work from home including jobs to earn money and educational meetings for students to cope with the COVID-19 crises.
Share in technology companies like “zoom” and “teams” have shot up as more people are relying on video conference calls to hold meetings or online classes. Demand for online shopping and entertainment has also raised as people stay indoors.
There is a need to implement better export strategies and product diversification to revive sales. A holistic approach and implementation of revolutionary strategies are necessary to implement to retrieve from the crises that will have a positive effect on the global economy, particularly international trade.
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Post By: Javaria SiddiqDr Javaria Siddiq is a Post Graduate Resident in Surgery & Allied at Mayo Hospital, Lahore