The world we live in is constantly changing and it has deep consequences for ongoing global stability. What has made it difficult for economists all over the world is to ponder deeply into the convoluted economic environment in order to take preemptive measures to quell any possible economic threats. Sometimes the threats are inevitable and in those cases, measures are taken to mitigate the effects at a certain level so that they may not spiral out.
The economic crisis created by the COVID-19 is also of the same kind. It could not have been averted but there are remedies, if taken by care then the possible spiral out of the crisis could be diminished and even eliminated in the best-case scenario.
COVID-19 has been a massive blow on the economies of various countries. Some developed countries were able to provide their masses with enough amenities of daily life compounded with effective and prolonged lockdowns which really helped in alleviating some of the sufferings of the people.
Read more: How to run economy amid COVID-19?
The developing nations do not have enough funds to support prolonged lockdown which are already struggling to deal with issues such as malnutrition, inflation, and unemployment. Pakistan is witnessing a high inflation rate of 8.9 percent coupled with widespread unemployment. The coronavirus pandemic has exacerbated the situation. Thousands of people have lost their jobs in the past few months.
Uncertain times for Pakistan
The expectation of fast economic recovery is bleak and what has compounded the situation is the slow rollout pace of vaccinations. Pakistan has a target of vaccinating around seventy million people by the end of this year while currently only 1.6% of the population is fully vaccinated. Currently, India, Nepal, and Bangladesh all have attained a percentage of vaccinated people more than Pakistan.
Moreover, the majority of the population is fully vaccinated in developed countries. Thus, these countries would follow a faster track towards economic recovery while Pakistan would be playing catch-up and further lose competitiveness.
The situation in Pakistan is uncertain and it is forecasted that many more Pakistanis could fall below the poverty line as a result of the pandemic if the situation persists. The recent findings of the Gallup Pakistan study highlights reduced expenditure by the poor people to fulfill their basic needs and daily food requirements.
It has been estimated by economists that thousands of small businesses could be closed permanently with the prolonged lockdowns and restrictions imposed by the government. They have been advocating for a steady vaccine rollout program for rapid economic recovery.
With the ease of restrictions imposed on the third wave, there are tangible signs that economic activity is gathering pace. However, it cannot be taken for granted and measures to preempt the potential fourth wave should be taken. The deadliest Delta variant of the Novel Coronavirus is already spreading worldwide. The Delta variant has emerged as the biggest concern in Pakistan.
Lifting of lockdowns
Addressing the United Nations High-Level Political Forum on Sustainable Development on July 13, PM Imran Khan stressed that “universal and affordable access to Covid-19 vaccine is essential to defeat the virus and to revive global trade, investment and growth”. He also added that “the world must ramp up vaccine production, including in the developing countries, and ensure its rapid distribution. While the support offered by some major nations is commendable, more needs to be done”.
Here's the PM's full address with Urdu Subtitles: pic.twitter.com/XQd9F6PN3J
— Prime Minister's Office, Pakistan (@PakPMO) July 13, 2021
Delays in buying, transporting, and applying vaccine shots have left many of the developing countries like Pakistan vulnerable to new virus outbreaks and consequently more economic setbacks. Evidence suggests that rapid vaccination rollout is helping economic growth by allowing countries to relax lockdowns or any other restrictions on economic activities.
Swift vaccine rollout will have a positive psychological impact which will also contribute significantly to the economic activities as people would overcome their doubts. Lockdown as well as social restrictions have a direct impact on economic activities. In countries where the vaccination drive has been going at pace, life is starting to get back to normal.
Sports and other cultural activities are also critical for bringing back normality. Recently, the postponed UEFA Euro 2020 was held in various cities of Europe and stadiums had full capacity crowds after a long gap. It was only made possible due to wide-scale vaccination across the continent.
Despite facing the brunt of the COVID-19, the governments in developing countries like Pakistan have not taken tangible measures in order to stem the consequences of a slow vaccination drive. If Pakistan does not expedite the process then it will continue to lose out on tourism revenue from abroad and will also not be able to hold lucrative sporting events.
After establishing that there is a direct link between the rate of vaccination and economic recovery, it is of pertinent importance for governments to take concrete steps in order to provide easy access to vaccines for its masses. This would also ensure that the efforts made so far to contain the virus will not go to waste.
The author holds M.Phil in International Relations from National Defence University, Islamabad. The views expressed in the article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.