Pakistan’s ruling party Friday vowed to double healthcare spending as it unveiled a new budget which dramatically slashed other expenditure with the coronavirus pandemic wreaking havoc on the economy.
To a chorus of boos from the opposition, the government announced plans to cut the overall budget by 11 percent compared with last year, as revenues dried up and deficits soared in the impoverished nation.
Pakistan increases healthcare budget amid economic strain
“We have prepared this budget keeping the coronavirus pandemic in mind,” said Hammad Azhar, the minister of planning and industries, during a speech to the lower house of parliament.
Pakistan’s economy was already on life support before officials began shuttering large segments of the economy in March as an array of lockdown measures were rolled out in effort to fight the spread of the coronavirus.
The country has since called for debt forgiveness from international donors and the IMF as tax revenues cratered, inflation soared, the currency was devalued, and fiscal deficits widened.
“It is difficult to say anything with certainty about the coronavirus’s impact … but there is no doubt that our GDP — which we thought could grow around 3 percent — will now go down by around 0.4 percent,” Azhar told parliamentarians.
Pakistan has struggled for decades to collect sufficient taxes, piling pressure on successive governments over the decades to provide ample funding for the country’s ailing healthcare and education sectors.
Estimates suggest that only around one percent of the 200 million population filed a return in 2018.
As written in an op-ed for Global Village Space, as the new fiscal year began, the economy started to witness a remarkable turnaround which confirmed the government had taken appropriate policy recourse to address the macroeconomic imbalances. The stabilisation effort paid off with a sustained adjustment in current account deficit and continued fiscal prudence. As Pakistan was on its way to make a slow recovery to 2016 levels, the pandemic struck.
Read more: Economy of Pakistan and the coronavirus
The impact of the pandemic has been widespread in Pakistan as well. Private consumption due to depressed consumer demand has decreased to 78.5% compared to 82.9%. On paper this may seem a small 4.5% decrease but if one were to do simple mathematics that’s a substantial $11 billion loss.
WHO warns Pakistan about importance of lockdown
The unveiling of the budget came just days after the World Health Organization called on Pakistan to implement “intermittent” lockdowns to counter a surge in coronavirus infections that has come as the country loosened restrictions in recent weeks.
“As of today, Pakistan does not meet any of the pre-requisite conditions for opening the lockdown”, the WHO said in a letter confirmed by Pakistan officials on Tuesday.
Read more: Pakistan lockdown lifted: WHO warns that it must be reinstated
Many people have not adopted behavioural changes such as social distancing and frequent hand-washing, meaning “difficult” decisions will be required including “intermittent lockdowns” in targeted areas, the letter states.
Some 25 percent of tests in Pakistan come back positive for COVID-19, the WHO said, indicating high levels of infection in the general population.
The health body recommended an intermittent lockdown cycle of two weeks on, two weeks off.
The coronavirus cases spread through local transmission showed a dangerous upward trajectory in a recent report published by the World Health Organisation Pakistan chapter in May.
PM Imran Khan unwilling to impose lockdown
Prime Minister Imran Khan has repeatedly lambasted the lockdown measures, saying the moves are disproportionately hitting the poor who are unable to absorb the economic damage.
With the novel coronavirus rapidly spreading across the country, Prime Minister Imran Khan on Thursday said he was already aware that the number of Covid-19 cases and deaths would increase with the passage of time but smart lockdown was the only option for Pakistan to deal with the disease.
In his address to the nation, the prime minister said strict monitoring would be done to ensure that people follow standard operating procedures (SOPs), adding that the government would get tough on the violators. He warned of sealing all such premises that caused the spread of the deadly virus. He said the number of Covid-19 cases would increase if the masses did not take precautionary measures.
The prime minister said Pakistan survived because of opening of economy and distribution of cash amount among the poor. “I want to inform you that in Pakistan the number of deaths will increase in coming days, but in India patients are not getting beds in hospitals and now it [India] has also reached a conclusion that the lockdown is not a solution,” he added.
Pakistan’s increase in healthcare budget dire necessity; system in shambles
Hospitals across Pakistan, however, say they are at or near capacity, and some are turning COVID-19 patients away.
Government officials claim the situation is “under control,” but health authorities believe the already stretched health system is unable to handle the lurking influx of COVID-19 patients.
In the country’s two most populous cities of Karachi and Lahore, hospitals are already struggling because of a sharp increase in COVID-19 patients in recent weeks.
Read more: Coronavirus impact on Pakistan’s hospitals increasingly negative
“Most of the hospital beds have already taken by patients, limiting our ability to handle the influx of COVID-19 cases, mainly in the big cities,” said Dr Faiyaz Alam, an office-bearer of Pakistan Islamic Medical Association (PIMA), a nationwide body of medical professionals.
The prime minister said healthcare providers were doing jihad and the government would introduce a special package for them. “Today we have the capacity to conduct 1.2 million tests in a month; initially, we had 2,800 ventilators, but now we have 4,800 vents and 1,400 more have been ordered. There were 600 ICU beds, but now we have 1,300. We are holding crash courses to train staff as we lack the trained staff to run the [ICU] beds,” he said.
Pakistan increasing the healthcare budget is a dire necessity as hospitals and their staff is struggling under the steadily increasing number of coronavrirus patients in the country.
AFP with additional input by GVS News Desk
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