A Scarred Economy | Editorial

The chief of the International Monetary Fund, Kristalina Georgieva, has said that while the world’s economy has suffered deeply as a result of the coronavirus pandemic, the downturn and the long-term impact may not be as bad as had been originally feared. She has attributed this to an improvement in the third quarter of 2020 and said that Western economies and China are making a rapid recovery. She has attributed this largely to the $12 trillion put under the floor of the world’s economy to support firms and households. But she has warned that the developing world could be confronted by a lost generation that has missed out on education, job opportunities, and other chances in life.

This is the scenario we are seeing in Pakistan and which many fear will have a long-term impact. The World Bank has warned Pakistan about external financing risks that could be compounded by difficulties in rolling-over bilateral debt from non-traditional donors and tighter international financing conditions. A World Bank report says that a possible resurgence of the coronavirus, triggering a new wave of global and/or domestic lockdowns and further delaying the implementation of critical structural reforms, is a major factor in possible risks to Pakistan’s economy. However, the words of the IMF chief offer at least some reassurance. We certainly hope the world can make a recovery, but exactly how it will engineer this and what measures it will take to make the recovery possible is still far from certain. Different strategies are likely to be followed in different parts of the world. But there is certainly going to be a downside after the entire crisis is over.

Economies too have all suffered from the decline in the quality of jobs and the fact that so many businesses have been forced to pull down their shutters. Here in Pakistan we can see that in many places, with businesses and industry laying off workers in many sectors. The problem is not one that can disappear immediately. But if the IMF chief is confident that it has been halted and that some recovery can be made in the years ahead, this is encouraging for all of us, no matter where we live. The crisis was shared in common. It is now time for the developed world to help countries which are less able to help themselves.

Source: https://www.thenews.com.pk/print/726551-a-scarred-economy

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