Coronavirus cases have thankfully plateaued to a manageable level. Markets are buzzing. Restaurants are full. Ratings are stable. Headline economic indicators also show some rebound. No wonder the ruling party is having an easy time selling a feel-good factor. And yet, there has been no serious government attempt to objectively assess socioeconomic damage that the pandemic has caused so far. There is only reference to traditional economic indicators going down and then making a recovery of sorts since June.
In its latest economic bulletin, the finance ministry expects economic activity to “rebound strongly within the first quarter of FY 2021” and to “recover at least around the level observed in Q1 of FY2020”. In a data fog vis-à-vis Covid impact, if indeed an economic recovery is happening in the agriculture and manufacturing sectors, it is not clear if the relief is reaching the households who have been hurt the most.
Of the Rs1.2 trillion relief package, perhaps the only measure of consequence was direct cash transfer to vulnerable families and daily wage workers. Per finance ministry data, as of August 2020, about 15 million beneficiaries were receiving equivalent of Rs1,000 per month under the blanket BISP/Ehsaas program. Without a proper Covid needs assessment, however, this social spending, which has its benefits, may be both untargeted and inadequate in these times.
Even the IMF or the SBP have not made public their impact assessment of the pandemic on Pakistan’s economy, if indeed they did some kind of exercise. The issue of objective evaluation is now obscure because the country did not fall badly into the spiral of continually rising Covid cases over a long stretch. In fact, the anti-virus progress has been recognized by leading Western media publications, although it is not quite clear which social, demographic, hygienic or enforcement measures did the trick.
In terms of a comprehensive Covid impact analysis, the policymakers seem to be in denial on the key remittance front as well. Anecdotal evidence suggests that mass layoffs in the Gulf due to pandemic may in fact be provoking temporal spike in remittance numbers of late. Workers are sending home their savings for good, which is captured by banking channels as personal couriers cannot fly in like they used to. But the record inflows in recent months are expected to carry on by the finance ministry.
The situation on the trade account also demands that complacency should not set in after Covid control, eased lockdowns, and initial green-shoots of economic recovery. The upcoming flu season is expected to worsen the Covid situation in Europe and North America, Pakistan’s major export markets. Even at home, virus gaining intensity cannot be ruled out in the winters. Do not bury head in the sand. Take stock of what has passed and prepare better.