The way forward

As the inevitable crisis approaches fast to devastate the economies of the world, countries such as Pakistan are at greater risk of being hit in a big way. The recession that is inevitable now has even prompted experts from the IMF and World Bank to scratch their heads. A World Bank report has projected that in South Asia, Afghanistan and Pakistan will be particularly in a bad shape in the aftermath of Covid-19. Amid all these doomsday scenarios, there is little expert advice about what is to be done apart from doling out aid packages to people and offering incentives to industries. How long can the economy sustain in this situation and what will be the outcome of a prolonged lockdown if it carries on for months to come? All these questions need not one but multiple possible answers so that at least some planning is in place if things really go out of hand. There are two possible trajectories for Pakistan. First is the rosy one, in that the number of deaths remains relatively low and the lockdown is lifted in the coming weeks. The second and more frightening path is the one that Italy and Spain are going through. It is the worst that we need to prepare for. Sadly, among all political parties – including the ANP, MQM, PML-N, PPP, and even the PTI – none has focused on an economic board of experts to formulate and suggest what needs to be done in the long run.

Most parties are just focusing on giving away aid and charities, but the potential for such generosity will soon exhaust. We need a panel of competent economists who can go beyond talking about doom and gloom and suggest some concrete measures to be taken in the coming days. There are a few steps that must be avoided: first a decision to print more currency notes is an easy but disastrous one. The more notes you print, the more able you are to hand out cash to the needy, but at the same time you create more inflation which is already running high. Second, more external borrowing is also not suggestible as we are already under a tremendous yoke of foreign loans. Third, you can’t carry on with an incompetent team. And finally, there is no need to create more rifts in society by targeting the opposition and the media which can be your potential ally in your fight against the Covid-19 crisis. So if these steps are to be avoided, what needs to be done that can alleviate the concerns of the people and offer us a way forward? An urge to print more notes must be curbed and the money distributed must be in line with what we have in the kitty. The government must stop all non-development expenses and divert them to heal the economy. Domestic borrowing – rather than external one – may be a way out. That means you utilize all funds available from the domestic sources, just like you do in a war-like situation.

Third, the government must prepare to take concrete action against pharmaceutical companies and private hospitals if they refuse to set aside the profit motive. Pharmaceutical companies and private hospitals are notorious for their unethical practices when it comes to earning more even if it comes from life-saving drugs and equipment. The same applies to the production and supply of essential commodities across the country. In a likely scenario of food shortages, the logistics needs to be ready and essentials such as cooking oil, flour, pulses, rice, and sugar must be supplied to the people, even if it requires taking radical steps. That’s what you do when it becomes an existential crisis for the people. Finally, limits to how much one can purchase must be imposed if food is in short supply. Ultimately, we need to set our essentials right. We need to develop a model for a welfare state, which are at the moment coping with the crisis in a much better way because they have more ventilators and medical professionals available. The model that we have been following for the past 70 years has not worked and it will not work unless we make some drastic changes in our policies. The fact is that, more than anything, it is defence of the people against disease that counts.