As I sipped my evening chai with family in Lahore a few months ago, someone pointed to the television screen showing scenes from Wuhan under lockdown.
"It's a city as big as Lahore, if not bigger. I can't imagine how they locked down such a large city."
In August, that memory is fleeting, lost in an almost forgotten era as COVID decimates livelihoods, healthcare capacities, lifestyles, and news cycles. As experts point to a possible end of the pandemic in Pakistan, it is time to reflect and learn from the mistakes made and the approaches employed to get where we are. To predict the future, I would return to the night of that memory.
Imran Khan had claimed at Davos that 2020 would be the year of economic growth for Pakistan, SBP had hit a 21-month high at $11.586 billion, KSE recorded a 16-month high, and the country was listed as one of the top emerging tourist destinations. After years of international isolation and internal turbulence due to terrorism, Pakistan was at the cusp of re-entering economic relevance. Fate ordained another speed-bump as panic gripped the nation, policemen begged worshippers to pray at home, and millions of people lost their jobs. There was no revival of tourism this year as the hospitality industry laid off hundreds of people like droves while the aviation industry lost the profitable summer.
If Pakistan truly sees COVID in the rear-view mirror, as indicated by Asad Umar's announcement to open multiple sectors in the coming weeks, the time has come to evaluate the damage, and take inventory of what is salvageable. The former President of the Overseas Investors Chamber of Commerce and Industry (OCICCI) remarked about remaining COVID challenges that may shift sentiments around business confidence of foreign investors that collectively contribute Rs. 1.2 Trillion in tax revenue. It is no longer just a business equation, but an economic one as the bullwhip effect decimates market demand, elasticity, and supply chains.
Yet a bullish market trend, successful monthly FBR tax collection targets, and marginally rising exports indicate an arguably sustainable economic recovery. With a small economy comes agility and with a Pakistani economy comes several institutionalized challenges that do little to catalyze growth. Given that much of the world is focusing on combatting COVID, an early end of the pandemic in Pakistan produces an opportunity that could not only help mitigate the Rs. 2.5 Trillion economic loss but help level the playing field: a dire need given national geopolitical ambitions.
If there were ever a time to overhaul select economic policies that would incentivize the growth of the services sector and allow for an increase in non-Chinese foreign investment, this is it. Idealistic speeches from 2018 about inviting Paypal to operate in the country do little to spawn independent industries when receiving a small international package or setting up a VPN requires a litany of formalities and paperwork. Pakistan has improved its rank to 108 on the Ease of Doing Business Index, but that may not be enough given the sheer potential of the fifth-youngest nation. Unfortunately, the only news on this front in the past few weeks involves threats of banning various platforms that 'are being used to incite hatred.'
The tourism industry, too, can benefit significantly by standardizing experiences, building independent institutional capacity, and placing safeguards for visitors rather than organically asserting its own trajectory. Pakistan has lost over a decade of tourism to terrorism and wars that were not ours to fight. It would be a shame that when faced with an opportunity to play catch up, the government allows the sector to lose a season, and then to not utilize a global grace period where it could generate attractive long-term sustainability. Thousands of people will attend the Annual Global Tourism Forum in Islamabad next year, and it would wise to direct recovering sectors like construction towards hospitality and tourism.
Policy needs to be driven by the driver, not the passengers. These are the same passengers attacking special advisors to the Prime Minister (SAPMs) one week and mourning their resignations the next week. There is a clear mismatch between the ambitions this government has and the economic leverage required to satisfy said ambitions. At some point, universal economic growth will need to trump internal lobbies and partisan warfare. Pakistan will need to wait while it builds international confidence regarding foreign investment, but it is not feasible to wait for somebody to walk through a closed door.