MALIK ASHRAF
CORONA Virus is not only an unprecedented threat to human lives across the globe but it has devastated the economies of almost all the countries affected by it. Trillions of dollars have been wiped off from the global stock market and industries shut down creating widespread unemployment. The impact of the pandemic is so severe that even the most affluent and developed countries are finding it difficult to contain the spread of the virus to save lives and insulating their economies against total collapse. In regards to containment of the virus they are strictly enforcing social distancing and even complete lockdowns. They have also come up with huge stimulus and relief packages to enable their industries to absorb the impact and also helping the people who have lost their jobs because of shutting down of industries and businesses. However the dilemma with the developing nations like Pakistan faced with scarcity of resources is that they are not in a position to emulate the model and approach adopted by the rich countries. Notwithstanding the international assistance trickling in, maintaining balance between allocation of resources to contain the virus and saving their economies is an inescapable imperative for developing countries like Pakistan. Prime Minister Imran Khan is right on money when he says that we cannot afford a complete lockdown as 25% of our people live below the poverty line and complete lockdown would prove to be a disaster. The country at the moment is not in a position to reach out to all the poor people and compensate them for their job losses, particularly the daily wagers, although a stimulus and relief package of Rs.1200 billion has been announced. The effort needed to be supported by the wealthy and affluent segments of the society, throughinvestmentin some vibrant sectors ofthe economy to save jobs and enabling the daily-wagers to support their families in these difficult times. In this regard, the amnesty given for investment in the construction sector, giving it the status of an industry, lifting the withholding tax on construction as well as the constitution of Construction Industry Development Board are a very imaginative and prudent initiatives indeed. The construction sector is probably the biggest avenue of employment for the daily-wagers besides being the most productive economic agent. It really requires huge resources to keep it afloat and contributing to the economic health of the country, which the government at present neither has nor can afford to make available for the purpose. There are surely hundreds and thousands of people who own billions which they have not declared even in the previous amnesty schemes.They would be encouragedto whitentheir money because no questions are going to be asked regarding the source of those funds and no tax will have to be paid like the previous schemes. The decision to open construction sector and allied industries is timely and sagacious move. Hopefully huge investment will be forthcoming as a result of this measure. Construction industry is connected to at least 29 other industries and investment made in this factor will also spur economic activity in those industries. The multiplier effect will lead to an exponential increase in investment in all those industries besides creating new jobs. The abolition of capital gain tax on selling properties is also a very positive measure to give boost to the real estate sector. Besides the foregoing steps, the government has also given tax refund of Rs.100 billion to the exporters which is an unprecedented step by it to support business and employment. This stimulus package aims to address liquidity challenges faced by the industry. Improved cash flow position of the companies will ensure that workers get their salaries on time. The government is also contemplating to open some other sectors to save the economy from collapse and stagnation. No doubt that the fight against Corona Virus is a global challenge and it can be overcome through solidarity and collective efforts of all nations with the affluent nations assisting and helping the poor and developing countries by providing equipment as well as financial resources required to deal with the situation and putting them in a position to absorb the economic impact. But dilemma is they are also facing their own challenges on internal front and could not afford to spare much for developing nations. There is also a limit to the assistance that the international monetary institutions can afford to make available. Ultimately much of the burden will have to be borne by those countries themselves by tapping all possible avenues. These are extraordinary times and need extra-ordinary responses. Under normal circumstances giving amnesty to illegally earned money or money stashed away by avoiding state taxes would be considered morally and legally wrong step but when there is a national emergency and the question involves greater good of the poor masses, such steps are justifiable by all means. The flak being hurled at the government by some opposition parties regarding amnesty given to the construction sector is not only misplaced but also ill-intentioned, considering the fact that they also have been giving amnesties to stem the economic rot and also justifying them with all sorts of logic. Now when the country is faced with the worst challenge of the century they find the move as unjustified. The regrettable aspect of their tirade is that they are not presenting a better alternative to achieve the desired objectives. They are better advised to leave politics to better times. — The writeris freelance columnist basedin Islamabad
