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Policies and pandemics

Previous research on plagues and pandemics ranging from 14th century to the recent Spanish flu has established that pandemics greatly reshape how a society functions. As initially, the pandemic strains the health system, however, the stress becomes apparent in other parts of the society rather quickly.

If we look at the Spanish flu, in addition to the inherent biology of the virus, it was also the state of the world at that time that made it so lethal. And many things changed profoundly in the wake of it as the crisis led a move to a revolution in public health, improved healthcare research and systematic availability of data on healthcare. The Spanish flu gave a stimulus to reshape the concept of socialized medicine and healthcare as the pandemic was recognized as a global health crisis that had to be dealt at the population level. The policymakers realized that the pandemics are a social problem and not an individual one.

Unfortunately, in the developing countries at the population level, there is a clear disparity that the poorest, the most vulnerable, have the least access to healthcare, live in the worst conditions and are most exposed given their working conditions. Therefore, likely that developing countries bear the brunt the most while developed economies tend to bounce back relatively quickly.

In case of Pakistan, the immediate challenge while dealing with COVID-19 was to find a balance between averting a health crisis by limiting the spread of virus while also minimizing the economic losses and protecting the most vulnerable. Around 40% of the households in Pakistan live below poverty, hence, a complete lockdown could potentially lead to a humanitarian crisis in addition to the health crisis. Here an interesting question is how would COVID-19 reshape our world as we know it?

There is no doubt that Pakistan is in dire need of structural and institutional reforms. The required reforms and the development projects announced and initiated by the current government are in some of the key priority areas such as climate change, social enterprises, food security, tourism, water and sanitation, energy sector, employment generation, regional connectivity, youth and women empowerment among others.

However, the pandemic has been successful in pushing out some of these development sector projects and reforms sooner than later as it has highlighted what are the baseline conditions, which are the most pressing challenges, what resources are available and what should be the optimal pace and sequencing of the reforms and development projects mainly given their economic, social and political impact.

Pakistan has suffered a significant fiscal shock from the economic fallout and the sudden spending on crisis response caused by the pandemic. Government of Pakistan announced a special program in response to COVID-19 with an outlay of PKR 70 billion and made some policy decisions to achieve macroeconomic stability.The quick crisis response has included spending on emergency healthcare services, investment in social protection and economic support programs to create and sustain livelihoods.

 

Some of the noteworthy interventions during COVID-19 are:

  • Government prioritized the Ehsaas program, the single largest social safety program in the history of Pakistan, to serve almost 12 million households that is almost 67 million people through direct cash transfers worth PKR 150 billion.
  • In the health sector, the government has built a 250-bed isolation hospital and Infectious Treatment Centre with the state-of-the-art facility in record of 40 days.
  • Ministry of Information Technology has developed an app for self-help that assists with screening at home to prevent unnecessary hospital visits.
  • The Federal Government of Pakistan amidst the COVID-19 established a high-level decision-making body called the National Coordination Committee (NCC) with the sole purpose to articulate and implement a unified national response to COVID-19 between federal and provincial governments. The committee is responsible for collating, analysing and processing information.
  • To ensure education continuity, Ministry of Education has also launched a dedicated Education TV Channel,‘Tele-School channel” to teach students of classes 1 to 12.
  • The State Bank of Pakistan has maintained a tight monetary policy keeping the policy rate at 13.25% and then further reducing it to 11% in March 2020 to dampen the inflationary impact.
  • The state Bank of Pakistan also provided temporary relief through financing to industries as well as ease of loan repayments.
  • The government has hired tens of thousands of out-of-work labourers to plant trees across the country to deal with climate change threats under its Ten Billion Tree Tsunami program while also creating jobs for at-risk daily wagers and ensuring that the economy stays afloat during the pandemic.
  • On the international front, the PM and IMF have negotiated a limited time amnesty and fixed tax regime for his construction package.
  • Furthermore, Prime Minister Imran Khan also initiated global discussion on debt relief for developing countries.

However, good intentions are sometimes not enough and policymakers need to avoid quick fixes. Thus, over the long run, policymakers need to formulate and implement comprehensive reforms to tackle the fundamental drivers of socio-economic growth. In the medium to long term, the government should also ideally focus on implementing structural reforms that ensure sustainable private sector investment. Simultaneously, the economic challenges from COVID-19 further emphasize the importance of public investment to trigger job creation and reviving economic activity.

In conclusion, the pandemic itself and the political response to it will inevitably determine the future of the economy. As it presents a need and an opportunity to start fixing the underlying problems based on their socio-economic significance and sustainability. The development projects and reforms are critical to ensure fiscal resilience and stimulate recovery from the consequences of the COVID-19 pandemic.

The writer is Product manager Viamo

Views expressed by the writer are her own and do not reflect Viamo’s official stance

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