The Covid-19 epidemic, which experts now say could remain with us at least for the rest of this year, has had a devastating impact not only on health but also on livelihood and the ability to earn it. According to the ILO, nearly half of the total workforce around the globe is in danger of having their means of earning destroyed by the pandemic. This number rises to billions. The ILO has said the risk is greatest on those workers who formed a part of the informal economy and three quarters of them, in other words some 1.6 billion people, face enormous risks. In Pakistan too, there is a looming cloud of unemployment over the heads of as many as 18 million people in the country. This likely outcome will emerge from an impending closure of an estimated one million small entities that will be shut for good. Federal Minister for Planning and Development Asad Umar has made this startling but not entirely unexpected revelation, warning our economic planners that between 20 million and 70 million people may see a downward slide into extreme poverty, meaning they wouldn’t know where their next meal would come from. This is a grim picture that unfortunately is going to unfold in the coming months. In all likelihood, Pakistan is going to experience the highest unemployment rate in decades. The government will also be in deep trouble as revenue collection has dropped by nearly Rs120 billion in just one month.
On an average, nearly two dozen people are already losing their lives daily in Pakistan, and as the government is planning to ease the lockdown restriction across the country in the coming days, there may be an unprecedented spiral in daily deaths and new infections. The government needs to take a few measures before the situation gets out of hand in a whirlwind manner. First, small entities must be supported financially so that the impact of unemployment can be minimized. The more entities we manage to rescue economically the more jobs will remain in place, at least for the time being. Second, there must be a mechanism in place to provide unemployment allowance and benefits to the people who are going to be jobless in the coming months.
That means in the upcoming budget-making exercise, there must be a separate head for these allowances other than the already running safety nets in the country. There will be a need to regularly update the data of poverty stricken people and for that you need a functioning local-government system in the country. The other three provincial governments have abolished them on the pretext of establishing yet another new system. Economically marginalized people do not have access to cyberspace where they can get registered online. A locally based transparent system of registering the needy must be initiated through local institutions and NGOs. So, in short we must have a three-pronged strategy: support small entities to keep floating, engage civil society organization, and reactivate local bodies to fulfil their functions.
The ILO has already issued its third report on the coronavirus crisis, and warned that the most vulnerable in the labour market are often employed in the hardest hit sectors. The limited reliability of data in Pakistan also means we cannot be sure how many are benefiting from the schemes set up to assist them or from informal philanthropy which has been a major part of Pakistan’s social set-up for decades. Today, we must work jointly, across the world, to find the best possible solutions to tackle the crisis, stave off misery and ensure the poor are not forced into unbearable suffering or even death due to the actions of those who hold the greatest amount of wealth.