Frank Islam
COVID-19 has wreaked human and economic havoc around the world. To date, it has affected more than 200 countries, infected over twenty million people, and cost over 800,000 lives. It is estimated that its economic damage has been around $90 trillion. A recently published Congressional Research Service report on the ‘Global Economic Effects of Covid-19 states: “Estimates so far indicate the virus could trim global economic growth by 3.0% to 6.0% in 2020, with a partial recovery in 2021, assuming there is not a second wave of infections,”
The report warns of heavy human costs in terms of ‘lives lost’, rising levels of poverty, derailed careers and increased social unrest. It projects that, global trade could drop by 13% to 32% and especially harm trade-dependent emerging markets and developing countries. There is no doubt, as some experts title it that we are living in the “Coronavirus Era.’ The lockdowns in countries appear to have had a positive effect in retarding the spread of the virus. As countries such as the US, Brazil and India have reopened, however, the spread has accelerated again. Given this new normal, what needs to be done to promote economic recovery in response to the disastrous conditions that have been created by Covid-19? With that in mind, I believe there are three fundamental requirements for facilitating an economic recovery: Defeat Covid-19 and Eliminate the Health Crisis – The US Federal Open Market Committee (FOMC) in a policy statement says, “The path of the economy will depend significantly on the course of the virus. The major obstruction to economic recovery will not be removed until there is a vaccine that has been clinically trailed and demonstrated to be successful in treating patients and then administered to a broad swath of a nation’s citizenry.
Revive Stimulus Packages for the Unemployed and Small Businesses–After the breakout of the pandemic, many nations established stimulus packages with an emphasis on the unemployed and small businesses. Most of these packages have now expired but the need remains great. These packages should be revived because they will boost the economy from both sides: spending and trading I agree with that perspective. What the developed world can do is come together to outline and implement a Marshall Plan which includes stimulus packages and sustainable economy programs. I suggest the following things to consider for a Marshall Plan:
Charting a mechanism for smooth flow of trade across the globe with special incentives for exports from developing countries. Expanding funding assistance, relief in debt, establishing an international fund – jointly by developed countries and giant companies earning during pandemic. Developing a trustworthy and advanced healthcare system and sharing best practices to effectively face such pandemics. China is already engaged in large scale in-kind medical donation, financial assistance and infrastructural reforms to several nations. The United States, European countries and ally states should unite to do the same.
Taking all of this into account, where does Pakistan stand economically because of Covid-19 and what can and should Pakistan do now? Khurram Schehzad, an investment banker and risk analyst expect, “Pakistan’s economy to shrink by $15 billion as a result of the pandemic”. He also predicts a 10% decline in gross domestic product (GDP) in the fourth quarter of the financial year 2020. As with all the nations of the world, the economic impact of Covid-19 has been devastating.
Pakistan also has a huge potential to take advantage of booming software industry, tech start-ups, cyber security and online trade. Last but not the least, the government should consider social protection programs for disadvantaged classes and a comprehensive small business support package. In conclusion, Covid-19 is the enemy of the world. It is an equal opportunity killer and offender. Recognizing this the nations of the world must embrace and reach out to each other to terminate Covid-19 and make the whole world healthier and economically stronger in the future.
—The writer is an Entrepreneur, Civic Leader, and Thought Leader based in Washington DC.
