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Thursday, July 11, 2024

A Coronavirus guide to fixing Pakistan’s economy

How can Pakistan cope the challenges that the Coronavirus pandemic poses. What are the opportunities that the country can use to recapture its economic growth.

Sana Jamal & Muhammad Ahsan|

In the pandemic era, every day we learn about new cases, new fatalities but every new day also brings us closer to new studies and potential cure. The element of uncertainty is evident, but what is certain is that the post-corona world will not be the same. Which raises a question: How and what will coronavirus change? How will Pakistan cope with the challenges? The answer to the second part of the question is everything. It will change everything from how we interact to how we eat, work and shop.

What is noteworthy is the fact that the pandemic is waning the era of globalization and reinforcing nationalism. Instead of looking towards UN, WHO, US or UK, every country is playing by its own rules. As the outbreak of novel coronavirus has now overwhelmed nearly every country, it calls for both immediate and long-term measures.

For a country like Pakistan, the catastrophic situation also offers a much-needed push into the future with an opportunity to set priorities straight. Every challenge is an opportunity. It is, however, only possible if right decisions are made at the right time for the right people.

Read more: How is Coronavirus outbreak affecting Pakistan’s economy?

How to jump start the economy?

It is no surprise that the pandemic is a shock to both demand and supply. We should be prepared for the human as well as economic impact as production falls and unemployment rises. But the biggest economic lesson from the 1918 Spanish flu is: Social distancing not only saves lives but also help recover economy as the cities with swift and aggressive response were the ones that recorded growth once lockdown was over.

In the current scenario, Canada’s example is most relevant. It’s spending $2 billion to fight the pandemic by revitalizing factories to manufacture medical supplies (PPEs, masks, ventilators) as well as essential items (soaps, toilet papers, pampers, sanitizing pads). By doing this, Canada is meeting three critical needs at once: treating COVID-19 patients, protecting medical workers and keeping the economy moving. This is the right time for ‘Make in Pakistan’ vision to be made a reality.

Pakistan should first focus on the urgently needed goods and equipment including PPEs, masks, respirators, hand sanitizers, disinfectants, and hazmat suits to meet the requirements within Pakistan. Once local requirements are met, surplus can be exported. Focus of the industries should be shifted biannually or yearly to meet the local need and finances for imported items.

Production and processing of food items, fruits and vegetables as well as canned foods, should be accelerated for local use first and later for export after meeting standards to be tagged “certified” or “virus free and healthy products” to reach foreign customers. A small carton should be sent free or at low cost to meet the quality requirements. The price should be lowered for local customers to increase the sales.

During the early stages, international investments would be difficult to attract. Later, special infection free zones and trade zones can be designated for local and international investments with special access, privileges and trade opportunities.

China is now restarting its economy and reopening schools, offices and shops, which was only possible after a strict curfew and making hard economic choices. Now, they are returning to normalcy with a strong online, tech and manufacturing sector. In some areas, rents were slashed and lending loans was made easier.

Pakistan government should also announce and support “national champions” – powerful private companies that represent the country. Huawei, Samsung, Airbus are some of the examples of national champions supported by their states.

How and why shift focus to online businesses?

The coronavirus crisis is the best time to accelerate online businesses to reach both local and foreign customers. The foremost focus should be quality of product, delivery time and access to wide areas, and efficient customer service (This is where Pakistani online businesses lack).

Online platforms, with quick deliveries, better services and a system solely categorized upon customer satisfaction can be developed or modified. The most relevant example is China’s Alibaba online platform, which became famous during the SARS virus crisis when people relied upon online shopping. In the same way, Pakistan can utilize the COVID-19 crisis to enhance its online shopping platforms for delivering all kinds of products. This would promote many local businesses and create more jobs, and also provide customers with cheaper, safer and better service options.

To boost exports, Pakistan can reach foreign online shopping portals and set up online platforms in the Middle East, Europe, and Asia. This can be simply done by setting up shops in the platforms and deal with the legal, customs and shipment hurdles through government support. Afterwards, promote “Made in Pakistan” products, primarily all the essential items and secondarily food, clothing on foreign platforms.

To ensure standards, the Economic Ministry must keep a check on the quality and services of online businesses and set up a 24/7 customer care center to report substandard goods/services.

How to respond to return of millions of Pakistanis from Middle East and elsewhere?

During the pandemic, restaurants, malls, hotel chains are some of the hardest-hit businesses. Learning from China’s experience, the employees of these businesses (and foreign-returned workers), who may face layoffs, should be provided other occupations such as delivery service, online business, education, medical, tech, farming.

Keep looking for opportunity amid adversity. For instance, China’s two online giants, Alibaba and JD.com, both trace back their success to the 2003 SARS crisis when people stayed at home. Pakistan must initiate and simplify processes for online businesses urgently.

Utilize local and foreign-returned workforce into local manufacturing industries and Pakistan’s key sectors (such as agriculture, textile and food) to improve quality and yield for imports.

Engage semi-skilled workers in industries by offering them subsidized training and utilize both their vocational and language skills.

Encourage businessmen and exporters to hire foreign-language-expert Pakistanis to improve interaction with the foreign traders and enhance business.

Involve fresh graduates and foreign-returned workers to synergize their capabilities to modernize local industries.

Work from Home

Self-isolation and lockdown have made remote working indispensible and desirable. COVID era is being called “the world’s largest work-from-home experiment”, and it is working. This approach should be continued even after the crisis is over to involve more people to work from home. Pakistani organizations can utilize the semi-skilled workers and focus on their online training.

Read more: Global coronavirus death tally crossed 100,000 mark: What lays ahead?

How Pakistan can utilize technology and encourage startups?

Pakistan was among the first countries to devise a space program in 1961. However, lack of will, funds and support from the government, universities and research organizations resulted in brain-drain and waning skills and resources. However, the COVID-19 offers an opportunity of a lifetime. But how can the country benefit from it?

Instantly identify and collaborate with the startups and organizations, specifically working on health and tech. Dozens of youth-led companies have already designed prototypes of medical equipment and are open-sourcing their designs during COCID crisis. However, not all are working on practical and effective solutions, which requires experts’ scrutiny.

Engage potential students in their final-year of college/university to make the best use of their capabilities to suit country’s needs. This can be done by assessing the list of final-year projects by students at top engineering/science universities. Cyber security, Artificial Intelligence, drones and robots are the focus of global institutes.

Government must offer incentives to young minds at early stage to develop their skills and utilize their knowledge for technological development. For instance, offer cash prizes and help to set up businesses, startups to students with the most innovative ideas.

Providing special government funds for new startups, innovative products. Government should encourage businesses, people to fund promising startups that can help improve social wellbeing.

Big companies and industries can offer opportunities to promising startups. Researches and inventions based on criteria can be connected with relevant tech firms, industries and government agencies which should encourage the inventors and researchers with prestigious job opportunities and better incentives.

Big data and information technology are crucial

China’s “science-based, risk-informed and phased approach” with a readiness to immediately react to any new cases or clusters even after life returns to normal, offers key lessons for the world. Speed and accuracy to identify and detect cases are the keys to control the pandemic. The Chinese city of Hangzhou reacted swiftly and used big data and technology, like QR codes, to track and stop the spread.

Moving towards digitalization and cashless economy

In light of the pandemic, people are being advised to choose cashless payment and avoid using paper currency to contain the spread of infection. The virus is actually pushing us into the future by cutting red tape and enforcing ideas that would have otherwise taken months or years to implement.

There are plenty of benefits of cashless transaction. Digital payments are convenient, faster, a recorded proof of transaction and valuable for online businesses. Mobile banking or digital wallet offers huge opportunity to both financial and telecom sectors. For the government too, the benefits are numerous, as it would help keep a track of transactions, curtail money laundering, theft and tax evasion. It will boost financial inclusion, as more people would open bank accounts.

Why and how to improve and modernize agriculture industry?

Smart farming may sound like something from the future but it is not. In some regions of the world, robots are helping the farmers. Innovations such as GPS-guided harvesters and robot-assisted machines are aiding to improve crop efficiency. Agriculture, being the highlight of Pakistan’s economy, must be given the due attention to manage some of the biggest farming issues such as low yield, low quality of crops and seeds, water scarcity, outdated practices.

Pakistan needs to urgently embrace technology in both farming and livestock operation to improve efficiency. Special incentives to the farmers and agricultural industry should be provided to help them setup small business with production capacities, necessary and modern equipment, and subsidized items and loans. During the crisis, farmers and villagers should be duly recognized and motivated for their duty. There should be campaigns (TV, radio commercials, loudspeakers) for each village and town, to deliver the correct knowledge during the pandemic on how to protect the community and farming facilities as well as incentives on how to maximize their capacity.

How to revive tourism after collapse of industry?

The tourism sector, such as hotels, travel and food industry, are among the hardest-hit and would continue to suffer in the coming months. After the situation is under control, the focus first should be on local tourism. In the touristic areas, local residents, students, youths, online communities, councils as well as business community should be given tasks by the government:

  • Properly clean and disinfect the area on daily basis.
  • Initiate local tourism campaigns to attract first the locals and then other cities and provinces
  • Encourage investments from business companies and create competitive market to improve the local facilities.
  • Promote native products through online platforms by involving youth and students by instilling competitive strategies to make their city/town/area better than others.
  • Offer rewards to the individuals, businesses, promotion to government officials of the top-ranked tourist region.
  • Offer incentives to local food and travel businesses.
Online education

Hundreds and thousands of students worldwide are switching to online education as learning shifts from classrooms to cloud. Pakistani universities too are working on the online curriculum. But the Internet penetration of 35% indicates a huge digital divide and education gap for low-income households. The crisis has compelled global academicians to rethink education and transform the outdated curriculum. But what can Pakistan do now to reach more students?

In 2014, Sierra Leone launched radio and TV programs to reach more than a million kids denied education after Ebola outbreak. Pakistan’s education ministry should work closely with tech and telecom sectors to stream lectures in three formats (audio, video and text) for online, TV and radio. There are a hundred educational apps available that can be utilized for the purpose. Installation of affordable remote satellite for Internet is another option. Meanwhile, the crisis has brought home the reality that the power of vocational education and skill-based learning must not be overlooked.

Read more: Coronavirus outbreak: Is Punjab government going to extend the lockdown?

Acknowledge and syndicate efforts of volunteers

Pakistani youth-led volunteer organizations and individuals are already doing impressive work. This spirit of generosity and volunteerism must be respected and rewarded by the government to encourage more people. The government can syndicate their efforts with national initiatives to give them a selected task such as promoting awareness in their communities, disinfecting a region, providing educational, health, or other services.

Special certificates and volunteer cards which can later help in finding jobs, setting up businesses or applying for loans. Awards can be announced for health workers, individuals, relief organizations, and media persons who contributed immensely during the crisis. Awards and medals could be named after Sattar Edhi, Dr. Ruth Pfau, and Dr. Usama Riaz and those who lost their lives in service of humanity.

Water and climate change

The critical COVID advise to “wash hands with water and soap for 20 seconds” is a privilege and a luxury not everyone can afford in water-scarce countries like Pakistan. There is no better time than now to address Pakistan’s water crisis and implement smart water practices to ensure that people have access to good hygiene and clean water in future.

It is also a good time to invest in brief yet powerful public awareness messages (on water and climate change) such as how to conserve and reuse water at homes and stop water wastage. Building small dams and reservoirs to preserve water should be the priority of all provinces. Because water security is national security.

Rethinking national security

The pandemic has pushed back the threat of nuclear war and terrorism as the United States is also realizing that inadequate healthcare system puts national security at risk. Meanwhile, the pandemic has also been described as nuclear war and terror attack. We know what happened and where but we are still reeling from the effects while identifying sources to stop the next attack. What is needed now is to make health security and climate change a central part of national security.

The pandemic will also shape the world order in which China is emerging as a superpower. It could also lead to political instability and leadership crisis especially in states with weaker institutions and where leaders or top officials have contracted the virus such as Iran, Nigeria and the UK. Internal threats such as economic hardship, poverty, hunger, may lead to collapse of governments. Pakistan must remain aware of both internal and external threats (such as intrusion by enemy drones, border clashes, terrorist attacks) at this crucial time, by rethinking its national security.

Sana Jamal is based in Islamabad and Muhammad Ahsan is from Shanghai.