Prime Minister Imran Khan Friday said out-of-box solutions were needed to meet the present day economic challenges in the wake of COVID-19 situation. Chairing a meeting to review the economic situation and future outlook of economy in the wake of COVID-19 situation, emphasized that greater attention should be paid to supporting small and medium sector enterprises and the agriculture sector enabling them to create greater job opportunities for the people. He also called for expediting the process of reforming the public sector organizations to plug leakages of economy and revision of subsidies to make the interventions more effective and target-oriented.
The directions of the Prime Minister must form the basis for formulation of proposals for the budget for the year 2020-21 as in the given situation these seem to be only viable option to steer the country successfully out of blue waters. Revival of the economy is a major challenge in the face of Covid-19 and this would require innovative thinking on the part of the FBR and the Finance Ministry and not traditional approach of squeezing tax-payers further and that too at a time when the virus has affected each and every citizen as well as all sectors of the economy. World Food Programme is already issuing warnings about possible famine and food insecurity in most parts of the globe if the pandemic persists for a longer period. Agriculture is mainstay of Pakistan’s economy and focus on this sector could not only ensure food security for our own surging population but also surplus production for export to earn foreign exchange and meet requirements of other vulnerable countries. Prices of agricultural inputs and implements/machinery should be brought down through reduction of duties and taxes as well as targeted subsidy. Similarly, SME sector too has great potential to help stimulate the economy but despite repeated claims no government in the past could exploit this potential. We have all along been supporting large-scale manufacturing to attain self-sufficiency through import substitution and to develop the large-scale entrepreneurs since they have higher propensity to save, thus higher propensity to invest. Hence about 80% of the total deposits of the financial institutions were spent on financing large-scale projects but experience shows these investments become unprofitable due to a combination of reasons and DFIs have booked huge non-performing portfolios. Given the fact that SMEs contribute to over 55% of GDP and over 65% of total employment in high-income countries, the focus needs to be shifted to SMEs in Pakistan as well. Reforms and restructuring of the institutions known as white elephant are also overdue and the process should be undertaken on a fast-track basis and to begin with visionary brains should be appointed as head of these organizations, shunning the tendency of ad-hocism. Federal and provincial governments ought to hold intensive brain-storming sessions to deliberate on different aspects of the prevailing situation and the available options that should be refined and fine-tuned on the basis of input from relevant stakeholders. However, it is unfortunate that there seems to be lack of coordination even on decisions relating to measures aimed at curbing the spread of Coronavirus and stimulate the economy. A day after people were told that NCC has arrived at six consensus points for implementation with regard to easing of lockdown restrictions, Sindh expressed its inability to adopt those measures in full and even Punjab where PTI has its own government came out with a proposal for continuation of existing lockdown strategy for big cities of the province. The apparent change of mind is understandable as Pakistan’s position in the global ranking in respect of COVID-19 dropped from 24th to 22nd on Friday after the number of positive cases increased to about 27,000 with addition of 1,800 new cases. The country ranked 20th and 29th in the global ranking on May 6 after reporting 1,000 positive cases and 20 deaths daily in five days. However, the change of thinking highlights the phenomenon that participants do not come fully prepared for meetings of the NCC. It is because of conflicting approach and strategy that traders in Sindh, backed by some politicians, are hurling threats on the government, threatening to open their shops and markets at all costs. Confusion and infighting could lead to further deterioration of the ground situation and, therefore, all stakeholders should be taken on board in true sense of the word.
