Looming poverty

Pakistan has become a country that was not in a position to withstand any economic shock at the moment. Unfortunately, nature has also decided to compound our financial woes via the Covid-19 pandemic. Though most economies of the world will be affected by this pestilence, the ones already under the cloud of excessive debts and continued borrowing will feel the worst impact. The number of people living below poverty line is not exactly known but even before the pandemic, renowned economist Dr Hafeez Pasha had estimated that in December 2019 it was at least 30 percent and he reckoned that by June 2020, this ratio would jump to at least 40 percent. Now in the wake of Covid-19, the number may swell to around 50 percent, meaning by the end of the year there is a likelihood that around 120 million people in Pakistan will not know where their next meal will come from.

These estimates were reportedly confirmed in a high-level meeting with international donors convened by the Planning Commission of Pakistan on March 26. Though the Pakistan Institute of Development Economics (PIDE) has been assigned the task to come up with an estimated figure, even if it is nearly a 100 million, a lot needs to be done for poverty alleviation in the country. We have been sliding into an economic abyss for the past two years or so and there were solid reason for that even before Covid-19 struck us. First, it was the absence of any economic or financial policies right from the beginning when the PTI-led government assumed power in 2018. Second, even after the first fiscal year under the new government no new planning was done, apart from an abject capitulation to the harsh conditionalities of the IMF. Third, the government went on a begging and borrowing spree from anyone who could dole out a couple of billion dollars. Come 2020 and we are faced with Covid-19 which according to PIDE, will leave at least 20 million people unemployed in the country. The number of people below the poverty line is expected to touch 125 million by the end of the year.

International donors have apparently asked for more accurate assessments of the long-term impacts on supply chain and on the labour market, especially daily wagers and street vendors. Since the donor countries themselves have been facing Covid-19, it remains to be seen how much succour they can offer at this juncture. What the government needs at the moment is some long-term planning rather than giving knee-jerk reactions to challenges. The ruling party has been blaming previous governments for mismanaging the economy, but we have not seen any effective management in the past two years. It is time to sober up now, tackle Covid-19 with effective team work and listen to sensible advice senior economists have been giving. And one of the crucial advice offered is to allocate more funds for development and welfare of the people. This is what we need the government to focus on, rather than going after opponents or journalists.