Pakistan’s quest to understand the impact of Covid-19 on SMEs continues. From what it appears, everyone seems to be grappling with it – hanging on to whatever strands of information, proxy analysis or surveys one can get their hands on. This is what happens when the federal and provincial statistics bodies have been catching rust for decades, and when the academia and research community isn’t adequately funded by the government and the civil society.

Anyhow, latest estimates by Karandaaz, a not-for-profit promoting access to finance for SMEs, somewhat suggests that things weren’t as bad as SMEDA’s first wave of Covid survey led to believe. Although Karandaaz report was released last week, both surveys were conducted in April 2020. SMEDA’s between Apr 3 and Apr 14, whereas Karandaaz’s during an unidentified “two week period” in April 2020.

But if 59 percent of respondents to SMEDA’s survey said they won’t survive beyond one month of lockdown, Karandaaz’s survey reports that 31 percent said there are highly unlikely to survive beyond one month.

If 92 percent of SMEDA’s respondents said they faced supply chain disruptions, in the case of Karandaaz’s survey the number stands at 79 percent. Likewise, if 83.7 percent of Karandaaz’s survey respondents said that they needed financial assistance, in the case of SMEDA’s respondents, that number was 89 percent.

In the case of reported layoffs, however, estimates from Karandaaz’s survey are higher than SMEDA’s survey: 58 percent as against 48 percent respondents who said they had already laid off employees.

Considering that both the surveys were conducted online around the same time, these variances, some of which are material in nature, may be because of methodological differences. Karandaaz’s survey only has 123 respondents from about 15 cities. SMEDA’s had about 920 respondents from about 67 cities. But neither survey can withstand the tests of statistical robustness.

If the purpose of these surveys is to inform the debate and make headlines, it is a job well done. But if the purpose of these surveys is to provide a basis for policymaking, then as argued earlier in this space, SME-related stakeholders – such as SBP, Karandaaz, SMEDA, PIDE – should join expertise and resources to conduct reliable surveys that can withstand backlash from business and political community. Read BR Research’s: Crude estimations of SMEs revival, May 5, 2020

Lockdown or not, Covid-19 is here to stay. The PM now states that Covid-19 will peak in Pakistan in July or August. This means that the economy will continue to take hits for a foreseeable future, and in turn there will be an increasing number of demands for various types of endowments from the state.

In a country where trust on the state’s statistics already runs thin, and anecdotes and biased surveys often trump reason even in the case of otherwise reliable estimates such as the CPI, the failure to base the state’s endowments for SMEs on robust surveys can and will invite backlash. This can be mitigated by means of better coordination and management of SME surveys. Hope sanity prevails! (Relevant reads: ‘Is SME finance really at historic high?,’ Feb 22, 2019 & ‘Covid-economy: Big Data should be Pakistan’s New Deal’, Apr 16, 2020)

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