Sigh of relief?
There can be no better news for the country, or any other country for that matter, than confirmation that there is some sort of improvement in the fight against the coronavirus. For Pakistan it is too much to expect, right now, that the number of cases will start receding anytime soon. But Planning Minister Asad Umar’s revelation that the number of expected cases by month-end might not be as bad as previously thought gives hope because it implies that the graph might at least not rise as steeply in the near future as it is now. Considering how sharply the infection has been spreading across the country since Eid, and how the healthcare system was fast coming under more pressure than it could be expected to bear, this news provides just the sigh of relief that the nation needs.
Yet the government must realise that it needs to be absolutely sure about the trend before making any bold claims. While it is appreciated that the government believes its policies are beginning to improve things, it is important to approach the situation from all possible angles before declaring even the slightest chance of victory. The reason is that it is quite obvious that the people only need the slightest excuse to abandon all notions of social distancing, which can very well undo any good work that really has been done. The government must, therefore, make sure there is nothing else that is affecting its data; like the number of tests taking place across the country. There have been news reports indicating that a lot of people are no longer bothering to get tested even when they show clear signs of the virus. That’s because large crowds at testing centres have made people cautious; and the fact that the tests are too expensive for much of the population to afford.
There’s also been the somewhat disturbing trend, at least in Lahore, of lab workers not being allowed to visit certain locations to test people in their homes. That way lot of people who show symptoms, and do want to get tested, are unable to do so when the call for in-home service. The government must make sure that it factors in all such facts before confirming whether or not the graph is rising any slower now. The importance of both transparency and making sure all information flows to the people cannot be stressed enough. The people must know exactly what is happening, so they can also know just what is required of them.
Are markets turning?
This year has been just has historic as it has been catastrophic for the global economy. Who would have thought that the day would come when the whole world, barring perhaps one country, would register zero or negative growth? The kind of economic destruction that has taken place over the last few months would have not have been thought of at any other time. Yet here we are, with the world’s giant economy first brought to its knees and now in danger of decapitation by a microscopic virus. Yet governments, big and small, have faced this catastrophe with remarkable poise. And they have also been smart. That is why practically every country laced its economy with stimulus packages and grants to keep float. But with no end to the virus in sight the natural question now is just how long can governments keep the packages coming?
For a while international financial markets defied the new economic reality with admirable confidence. The way world equity, currency and commodity markets rode on risk despite the most abysmal figures from the largest economies in a century gave reason for hope. But now it is fast turning out that the highs of the past few weeks and months were in fact desperation rallies. The market, just like everybody else, has also not seen anything quite like this before. And it was just as bewildered. So investors bet on bulls to sort of grow the market out of the crisis. Alas, such a thing is never successful over the long or even medium term.
That explains why risk is out of the international market right now and why all sorts of investors are once again running for safe havens like the US dollar, oil and also Japanese and Swiss currencies; the market’s most reliable anti-risk trades. It seems that the way most western countries and some of the world’s biggest economies bet on a successful reopening just isn’t possible. Cases have started rising across the world once again, especially in the US and some of the more eager European countries. Partial lockdowns are back all across the place. And this way there could be further closure of businesses and industries which will definitely hit global trade and economic growth. This is very bad news for small and poor countries because they do not have enough in their kitties to withstand another slowdown. Therefore we should see which direction world markets are pointing in and adjust now rather than wait till it’s too late.