Vanishing resilience

LAHORE: There was a time when the Pakistani nation was amongst the most resilient countries. Resilience exhibited by Pakistan was because the nation glued together in adversity. That resilience has now gone with disunity.

A decade back, the World Bank wondered that even in the most stressful conditions, Pakistan posted economic growth. But this is not true anymore! We posted negative growth during the peak of Covid-19; and this year too, we are expected to post negative GDP growth. Pakistan maintained its growth trajectory after the 1965 Indo-Pak war.

Its economy continued to grow after the 2005 devastating earthquake. It absorbed the shocks of several floods and flash floods in the past. Resilience is the ability to recover quickly from difficult or challenging situations. It is the capacity to bounce back from adversity, stress, and tough experiences.

Resilient people are able to adapt to change, overcome obstacles, and maintain a positive outlook despite setbacks and challenges they face. This is a quality that helps people cope with stress, trauma, grief, and other difficult experiences, and enables them to navigate challenging circumstances with greater ease and flexibility.

We see in our daily life that where a combined family system is in vogue in our country, people survive stress, trauma and grief because of their unity. They share the reduced income and reduced resources and finally overcome the bad times.

The combined family system is still prevalent in our rural areas (though it is also crumbling). This is the reason that in case of mass unemployment in cities, the rural workers go back to their villages where other family members share whatever meagre resources they have.

Polarisation in the society, within different communities, sects and ethnic groups has made our nation highly vulnerable to the smallest shocks.

In contrast, India and Bangladesh have shown resilience in adverse conditions because they are largely united as a nation. However, it may be subjective to determine whether Pakistan has shown similar resilience or not. In the past it did, but recently it did not.

Unfortunately, our polarisation started when the world was already going through the pandemic turmoil. According to the International Labor Organization projections, a pre-Covid-19 recovery will remain elusive in 2023.

The outlook is the most negative for Latin America and the Caribbean and for South-East Asia. All regions face severe downside risks to their labour market recovery that stem from the ongoing impact of the pandemic.

Moreover, the pandemic is structurally altering labour markets in such ways that a return to pre-crisis baselines may well be insufficient to make up for the damage caused by the pandemic.

The ILO in its 2022 report also stated that the large informal economy in many developing countries (Pakistan included) is impairing the efficacy of some policy instruments, since informal enterprises have been less able to access formal lines of credit or Covid-19-related government support.

Thus, relief measures did not reach those in need, and inequities within countries have worsened. Smaller businesses have experienced greater declines in employment and working hours than have larger ones.

Moreover, the ILO report adds that in developing countries, in the absence of comprehensive social protection systems that can provide adequate benefits to stabilise incomes, this has compounded the financial stress of already economically vulnerable households, with cascading effects on health and nutrition.

Given the asymmetric nature of the recovery, policy tightening would hit low-income households particularly severely, meaning that attention will need to be devoted to maintaining adequate levels of social protection.

Informal wage employment still trails its pre-crisis level by 8 percent. Own account and contributing family work, which are often characterised by poor working conditions, as per the ILO outlook.