“Wisely and slow; they stumble that run fast…” These words by William Shakespeare in the romantic tragedy of Romeo and Juliet are perhaps more relevant today than ever before, as we struggle to balance between the nightmare of death-by-disease and the looming danger of death-by-deprivation. It is not an easy choice. There are no easy solutions. The best, most advanced economies of the world are struggling. The decisions we take would reflect our moral judgements as a society.
Covid-19 has ripped asunder the many wounds that we have historically been able to live with, wounds that we always thought were not urgent enough to be addressed, wounds that we conveniently hid under makeshift bandages. The feebleness of our public health infrastructure is one such wound. There are many others, all well known, all at an almost cliché-status. Many are putting together elaborate frameworks for an economic recovery plan, some more equal than others, but it is urgent that we agree on certain broad themes that must define the new post-pandemic business and economic life.
To begin with, our recovery plan must follow a traffic light approach i.e. it must have phases, a red phase, a yellow phase, and hopefully an eventual green phase. Each phase must mark a different mindset, a different level of economic activity and a different level of public health alertness. As well-known scientists are putting it, there will be no light switch. We would not all of a sudden enter into a post-Corona world as the clock strikes twelve one night. There would be lots of greys, patches of dark times and bright times, vacillations back and forth; it is safe to assume this, because there is so much that we don’t know about Covid-19. Is it around for a couple of years? Would there be a second, a third and a fourth wave? The same ignorance that man once felt as he stood on the shore thinking he could sail to the final edge of a flat world has creeped upon us; wise that we humble ourselves before this fact, instead of trivializing the threat with a certain dismissiveness.
Ease of doing business, the cliché that pops up so frequently in every commentary on business, must become a core focus. A detailed process re-engineering, and nothing less, is urgently required to clean up the pile of known and unknown, published and unpublished rules and regulations that infect our regulatory framework. The Punjab Board of Investment and Trade (PBIT) has submitted several proposals to this end at several competent forums, and is ready to begin work on this; but it must be given the necessary support to push it through, now that this has become a matter of life and death. Pumping liquidity alone in the market is not going to fix all issues, we must make it easier for businesses to start (re-start), operate and grow.
Public health, alluded to above, is certainly top of the agenda; but it requires a deep re-think that stretches beyond the political horizon of any government. Quoting lack of financial resources is generally an easy show-stopper, as it cuts any discussion in the very outset, but we can’t let it happen this time. Public health has been defined as the “science and art of preventing disease.” A thoughtful look at this definition makes it amply clear that this means clean drinking water, that this means cleaning up our slums, that this means a waste management solution, a waste water treatment urgency, that this means a massive public awareness effort, that this means manufacturing vaccines (nearly all imported right now) locally for strategic independence, that this means manufacturing injection needles locally and stopping needle re-use, that this means easing regulatory procedures in DRAP and other places…
There are those who have quickly reimagined a completely changed global economic reality post Corona, especially a reconfiguration of global supply chains. Localization of supply chains, to the extent possible, seems to be the new recipe on the show. Such a reconfiguration, not unimaginable, would require massive improvements in competitiveness, in underlying cost structures; it would also certainly create more domestic jobs. Proponents of this point of view predict an end to globalization, a retreat back into our individual caves. We simply don’t know, but it seems unlikely. The economic world order we have become used to has created massive interdependencies, and too much money is at stake. Those interdependencies were not created overnight; they happened because of fundamental economic forces that cannot merely be overwritten by will. However, it is not to say that we would go back into the same world. Strategic independence in key sectors such as food, agriculture, pharmaceutical / health and so on is most likely to become a top agenda. This requires incentivizing the private sector to come forth and invest heavily in food storage, food / fruit processing, preventive health related manufacturing etc. Punjab has several special economic zones and industrial parks, any of them could be declared as sector specific zones for instance.
The bottom-of-the-pyramid, as the poorest socio-economic stratum of the society is often referred to, has as expected felt the brunt of this the most, because of the disease and the deprivation, worsened by the slowdown in economic activity. The word ‘Cooperatives’ is not a favorite in our country. Cooperatives have a tainted past in Pakistan; corruption, lack of regulatory oversight and weak governance structures have brought much heartache and failure. Let us juxtapose this with the fact that 40% of the agricultural commodities produced in the EU are marketed through cooperatives. We have sufficient successful examples in Africa and other emerging markets. They are increasingly being looked at as the new solution to provide social and economic dividends to small farmers and industrial SMEs. PBIT has started work on this front, and is in the process of developing a detailed business plan around it.
Another key attraction to developing successful cooperatives at the bottom of the pyramid is that it lets the government channelize liquidity support and financial assistance in a more structured form. A pandemic led crisis is a demand side, a supply side, and a credit crisis at the same time. Pumping liquidity into the market is important, but there is a need to balance handouts with more sustainable injections that heal as opposed to being mere temporary pain relievers. Structuring cooperatives would take a while, so this is certainly not a solution for next week, but it is perhaps the right step to take for fixing some of those structural wounds.
As Lenin famously remarked, “There are decades where nothing happens, and there are weeks where decades happen.” We are living through those weeks.
The writer is Jahanzeb Burana - CEO Punjab Board of Investment & Trade