- A realistic way to cope with coronavirus’ impact
The most powerful economies on the globe are caving in under the pandemic’s pressure. In the US the economic slowdown has turned into a crushing recession with sharp increase in unemployment. It has been estimated that unemployment in UK also could rapidly rise to more than 6 million, around 21% of the entire workforce. The situation is worse in continental Europe which is paying a heavy price while fighting coronavirus
Nearer home, India which had for a while outpaced China in growth is hunkering down to a lowly 3.5 pc growth rate according to Standard & Poor’s.
Pakistan has got itself into a more horrendous pickle. Its growth rate ranges somewhere between World Bank’s 1 percent to ADB’s 2.6 percent. Two well-known independent economists have argued that the increase in the number of unemployed workers would be between 3.1 million and 5 million depending upon the severity of the crisis while the number of people slipping down the poverty line would range from 9 to 15 million. The lockdown would take toll of as many as 10.5 million daily wagers and contract/casual workers.
The notion that opening the housing and construction industry would initiate an industrial revolution is altogether unrealistic. For over a year and a half industrial construction has been in steady decline due to fall in the domestic purchasing power caused by increasing unemployment and millions more going below the poverty line. With demand suppression in Europe and the US there can be no expansion in Pakistan’s export industry either.
The only way to boost domestic demand is to divert a major portion of the budget to massive investment in the development of social sector including highways, roads, bridges, hospitals and educational institutions right up to the union councils’ level. There has to be more reliance on local manpower than imported machinery.
Both Pakistan and India have to heed UN Secretary General Antonio Guterres’ warning that the Covid-19 storm is now coming to all theatres of conflict requiring diversion of their resources to deal with the challenge.
While the world takes time to recover Pakistan needs to promote trade with all the countries in the region starting with neighbours including China, India Afghanistan and Iran.