Horrifying WB forecast
While Pakistan’s economy was already in an extremely bad shape, the coronavirus pandemic has dashed any hopes of revival, even in the next fiscal year. So much so that the country is in for something it has managed to avoid even in the worst of times — like when it split, in 1971. A recent World Bank report has warned of a recession in the country — for the first time during its existence, barring the initial years after the independence — due to the severe impact of the deadly virus. It says that Pakistan’s economy could register a negative growth rate of 2.2% in the worst case scenario and 1.3% in the better scenario. And with the population growing at 1.8%, the negative economic growth implies a painful decline in per capita income, warns the report titled ‘South Asia Economic Focus’. The horrifying World Bank predictions feature: a significant fall in remittances; continued portfolio outflows; and growing inability to manage foreign debts.
The little fiscal space available with the government pre-corona has been eroded further by a massive investment in the healthcare infrastructure to cope with the mushrooming infection as well as by the government handing out financial packages to keep the virus-infected businesses afloat and to reach out to a large segment of the population which has been rendered out of work due to the lockdown across the country. And a continued closure is feared to terribly affect retail trade, land transportation, entertainment, accommodation and restaurants, tourist services, water transport and air transport. This is bound to increase unemployment in the country — from 2.4% to 9% in the various sectors of the economy, according to the World Bank report.
No wonder Prime Minister Imran Khan has, in a video message, appealed to major world powers and global lenders to “launch an initiative to give debt relief to developing countries” that are fighting to curb the spread of the coronavirus. However, a debt relief — to be discussed during an upcoming IMF-World Bank meeting — may only be expected in the form of rescheduling, allowing for delayed repayment. Tough time indeed — for the government and the people.
Contagion in slums
The fears experts were expressing have come true. Cases of the deadly coronavirus have emerged in informal settlements in Karachi. In these areas, people live in small houses with large families so they are more susceptible to contracting the coronavirus disease. After 7 members from one such family in the city’s district central tested positive for Covid-19 a few days ago, the Sindh government took notice of the dangerous spread of the virus. The government has promptly either sealed some localities or has tightened the lockdown to prevent further spread of the virus. These steps have been taken to ensure social distancing. Chief Minister Murad Ali Shah has asked the health department to launch a mobile testing facility to screen residents of these low-income localities. He has held out a promise that the government will provide extra testing kits to various labs for the purpose. He announced that an order had been placed to procure another 190,000 kits.
Considering the lack of awareness about the efficacy of social distancing the provincial government has had to take the tough measure of tightening the lockdown. In many areas, people are not taking the highly contagious nature of coronavirus seriously. They are being seen converging on shops in large numbers close to one another. People are still carrying children in their laps and two and more people travelling on one motorcycle. Our fatalist inclination is also playing a role in taking things easy. There is also a false notion that only the elderly and the infirm are infected by the coronavirus. Figures from labs and hospitals show the virus can infect people of all age groups. The CM has also asked volunteers to deliver food rations at the door steps of the needy without them disclosing their identity in order to protect their dignity. In the past during famines, governments undertook public work projects where the needy worked in the dark at night.