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Wednesday, July 10, 2024

Can we take “advantage” of the coronavirus crisis?

In every crisis, there is an opportunity. And the Coronavirus crisis is no different. Pakistan may be uniquely placed to come out of this crisis as it's better prepared to face its challenges. Policymakers in Pakistan should leverage the Covid-19 pandemic to get the best terms for the debt servicing.

“You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things that you think you could not do before.” – Rahm Emanuel, Former Mayor of Chicago

This adage dates back to the Second World War i.e. to never let a good crisis go to waste. Crises create the conditions and the social and political capital to get unpopular things done which otherwise might not be on the agenda, or not be prioritized or simply unthought of before.

Winston Churchill is believed to have said something similar when the alliance between the Soviet Union, the United States and the United Kingdom arose out of the need to fight a common enemy. This created fertile ground for the formation of the United Nations.

Read more: COVID-19 pandemic: 2 best ways to win the fight!

Pakistan in a better position to avert the crisis

In every crisis, there is an opportunity. And the Coronavirus crisis is no different. In the aftermath of this crisis, Pakistan has taken some innovative steps in just a few weeks which otherwise would’ve taken much longer. Pakistan may be uniquely placed to come out of this crisis as it’s better prepared to face its challenges.

With life in Italy and Spain almost paralyzed and the United States failing to contain the spread of the virus amidst a rapidly rising death toll, many feared that a cash-strapped country like Pakistan could face much worse. However, there are reasons Pakistan might not get affected as badly. The median age in Italy is 47 years. The median age of the UK is also 40 years. And about half of Americans are obese which carries health risks.

According to a study published last month, when the coronavirus began spreading in Italy, 99% of all deaths in Italy were of people already suffering from other illnesses. The virus disproportionately affects older people.

Pakistan, on the other hand, has a youthful population that is not obese. Despite that, we shouldn’t relax measures to contain the spread. The point is that it’s useful to understand how we might be uniquely positioned to suffer less from this outbreak as far as deaths and cases go. Gilgit-Baltistan, for instance, seems to have managed to bring the pandemic well under control already.

Covid-19: Opportunity in crisis

Coming back to opportunity in this crisis, the Federal Government has already managed to convince international and bilateral donors to provide debt relief-possibly well until 2022. The G20 has also agreed to include Pakistan in the list of developing countries that will get debt relief or debt rescheduling in the wake of Covid-19. The technicalities of this relief and rescheduling are being worked out.

Policymakers in Pakistan can leverage the Covid-19 pandemic to get the best terms for the debt servicing. There’s a real chance that a vaccine is developed in the first half of 2021, but we should not let this opportunity slip away. We must extract favourable terms for loans from donors. Notwithstanding the effects of the pandemic on Pakistan’s economy, this could give Pakistan some fiscal space once this crisis subsides.

Another area worth focusing on is the agreements that include capacity charges with independent power producers (IPPS). These are companies that sell electricity to the government of Pakistan via the Central Power Purchasing Agency (CPPA). The electricity is then transmitted across the country through the National Transmission Despatch Company (NTDC) and subsequently distributed to domestic customers through Distribution Companies (DISCOs).

Consumers then pay their dues and the money goes back the same chain to the IPPs. When agreements were made with the IPPs by the previous governments, capacity charges were part of it. Without going into technicalities, what this means is that essentially we pay the IPPs a fixed amount of money whether or not we use all of the electricity they produce. In other words, electricity is more expensive than it needs to be in the country.

With the economy nearly grinding to a halt due to the Covid-19 pandemic, there is a realization that it’s not feasible to keep paying the IPPs the fixed capacity charges especially when the Industry is not using much electricity on account of the lockdown. The amount totals nearly Rs. 600 billion.

Prime Minister Imran Khan has appointed a committee to attempt to renegotiate the terms of agreement with the IPPs. Regardless of the results of these negotiations, it’s painfully obvious to policymakers now that future agreements with power producers must be on terms that don’t put such an unnecessary burden on the consumer. Another lesson we have learned because the pandemic forced us to confront this reality. We could ignore it no longer.

Read more: Covid-19: Pakistan must redefine its national security

Prospects of distance learning

Another positive development is the announcement of the Teleschool after an agreement was signed between the Education Ministry and PTV, initially for 3 months. Educational programs on TV is something Pakistan has sorely lacked till now. Although the Teleschool is meant to make up for lost school time for children on account of the Covid-19 pandemic, once the infrastructure and human resource is in place, it can be repurposed and expanded to continue providing quality education to children as well as adults via TV.

The Prime Minister is right in expressing the hope that the Teleschool may continue even after Covid-19. It’s a lot easier to buy a TV set to educate kids instead of constructing buildings for schools and hiring teachers and staff. India has experimented with this to increase the literacy rate. Pakistan can do the same. Learning through the classroom environment has its advantages but once we manage to effectively educate children through distance learning programs, the same can be used to expand outreach and educate children whom we have not yet reached.

According to the UNICEF, there are nearly 23 million out of school children in Pakistan. This pandemic has forced us to adopt new modes of learning and teaching. We can give use these modes to give every one of those 23 million children a chance at life.

The next step for Teleschool could be producing rich documentaries about culture, art, history and travel in Pakistan. The UK has the BBC. The United States has the Public Broadcasting System (PBS) for this. Pakistan has lots of talented videographers. Why not put them to work within Pakistan for Pakistan? Similarly, it can be hoped that state practice evolves through this crisis to focus on being productive instead of merely being dependent upon government officers. With officers on rotation and only skeletal staff present in Ministries, work is still being done.

At the same time, e-office suites are being installed on personal laptops to allow officials to work from home. The present government has prioritized improving IT infrastructure in government offices but Covid-19 is forcing us to adopt these measures much faster than we otherwise would have. It’s something that should have been done much earlier.

Read more: IAEA provides nuclear based covid-19 testing equipment to Pakistan

These are just some of the way we can take advantage of the Coronavirus crisis and not ‘let it go waste’, as Winston Churchill might have put it. If a forward-thinking approach is adopted by policymakers, we can convert this crisis into an opportunity and come out with a head start once this pandemic subsides.

Saqib Manzoor is an Engineer and a CSP officer. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.