COVID-19 TOTAL DAILY
CASES 324,744 667
DEATHS 6,692 19

Center for Global Development (CGDev) in partnership with the Consortium for Development Policy Research (CDPR) organized a webinar, ‘Coping with COVID-19: The Pakistan Experience,’ bringing together a panel of experts to discuss Pakistan’s experience with COVID-19, its impact on the country’s health sector and economy, and the lessons learned from the evolving national response. It also explored the impact of social safety nets and digital ID systems on the pandemic response and recovery. The webinar was moderated by Masood Ahmed who is the current President of the Center for Global Development and former Director of the International Monetary Fund Middle East and Central Asia Department.

The webinar panel consisted of prominent policy makers including Asad Umar (Federal Minister for Planning, Development, Reforms and Special Initiatives), Dr. Sania Nishtar (Special Assistant on Poverty Alleviation and Social Safety Nets for the Prime Minister) and Dr. Reza Baqir (Governor of the State Bank of Pakistan) as well as CGD experts: Kalipso Chalkidou and Alan Gelb. Although, COVID-19 pandemic has led to disastrous health and economic outcomes for both developed and developing countries, Pakistan has reported better outcomes in terms of both controlling the spread of the virus and managing its economic consequences as compared to other emerging market economies.

According to Asad Umar, the government’s approach to dealing with COVID-19 was based on balancing the need to protect both lives and livelihoods. The National Coordination Center, headed by the Prime Minister, and the National Command and Operation Center were also created to ensure a national cohesive effort and South Korea’s strategy for tracking, testing and quarantine was used as an international benchmark.

In addition to creating a cohesive administrative structure, sophisticated technology was used to track the contacts of positive cases, after which that data of ‘index persons’ (referring to positive cases) was geo-tagged according to population segments to identify hot-spots. This contact tracing and modeling technology was also used to obtain live data on patients and occupied beds in 750 hospitals dealing with COVID-19 patients across the country. Moreover, a mobile application was created to inform people about the nearest hospital with the relevant facilities. A software was also introduced to fast track incoming air travellers, while telehealth and tele-education was also used extensively all over Pakistan. Furthermore, Artificial Intelligence (AI) played a huge role in monitoring SOP compliance, where videos from the safe city cameras and news coverage were used to calculate the percentage compliance of SOPs.

Overall, the government followed a targeted or hot-spot based lockdown strategy that initially began with broad lockdowns, which were made more specific into micro smart lock downs with time. This led to a fall in positivity ratios, which went from a peak of 22% in mid-June to below 2% since mid-August. Furthermore, mortality numbers, which had peaked at 124 daily deaths in the middle of June, were now in single digit numbers for the past five weeks.

In contrast to Pakistan, per capita mortality numbers in neighbouring countries have remained high - they are 5.5 times higher in Bangladesh, 17 times higher in India and 46 times higher in Iran as compared to those in Pakistan. Data on patients who are hospitalized or on ventilators indicate the same trends as well. The next big step for Pakistan is to open up around 300,000 schools across the country in three phases - this means sending more than 50 million children and 2 million teachers back to school.

Dr. Sania Nishtar also stressed that the social protection aspect of the government’s COVID-19 response strategy was as critical as the health aspect. The micro-analysis of Pakistan’s labour force survey showed that there are 24 million breadwinners in the country, who either work as daily wagers, at piece rate remuneration or as self-employed in the very large informal sector. Multiplied with family size, this represents more than 160 million individuals, which form two-thirds of the country’s total population. The pandemic had left to these daily wagers stranded in major cities, depending on send outs. As a result, the government increased the ehsas emergency cash from Rs. 144 billion to Rs. 200 billion to support the vulnerable population. The Ehsaas program was mandated to support 16.9 million families, offering a subsistence allowance of US$ 75 to each family. Moreover, there has also been an active focus on developing a digital backbone to run this massive Ehsaas program. Three major developments took place over the last year. First, an end-to-end biometrically enabled payments system was introduced in January, 2019, and two commercial banks were also brought on board. Second, an SMS-based request seeking mechanism was also created, which allowed those affected by the pandemic to request assistance by sending a code at 8171. A repository of 139 million SMS requests was created, out of which 66 million requests were unique. Third, the government also developed data analytics mechanisms, where the national identification number, tied to the Federal Board of Revenue (FBR), immigration database, credit history, employment status, ownership of assets, was used to identify vulnerable families and individuals were identified to provide mass-assistance. This data analytics system was used for eligibility ascertainment using wealth proxies and existing survey data; 0.8 millions beneficiaries were filtered out of the social protection list, when this system was tested last December.

According to Dr. Sania Nishtar, the government adopted a hybrid type targeting approach, which not only offered emergency assistance for the ‘known vulnerable’, but also opened up opportunities to provide demand based support for the ‘new poor’.

The Governor of State Bank, Dr Reza Baqir addressed the webinar and said that usually when Pakistan is discussed around at the international level, it's usually about the country’s boom and bust cycle which is not very positive but finally there’s a very positive story about Pakistan and the credit goes to the good work done to handle the Covid19 crisis especially the work done by Asad Umar and Dr Sania Nishtar because there are very few countries who have flattened the curve so quickly and have provided and scaled up social assistance in such a way.

The Governor said that the Covid19 pandemic had two dimensions, a public health crisis and an economic crisis and both of them were handled really well by Pakistan. Dr Baqir added that in terms of the economic crises due to the pandemic, Pakistan was well prepared to handle that because the country had started a very ambitious economic reform program before the pandemic to tackle very difficult challenges caused due to the misgovernance in the past. He also gave credit to the Prime Minister who gave a go ahead to go with the tough adjustment program and empowered his economic team so that they can take difficult decisions. The governor spoke about the problems which were inherited by the current government, a towering current account deficit which was around two billion dollars a month when the Prime Minister took office. The governor spoke about the measures that took place to almost eliminate the historically high current account deficit. These measures included the changing of the exchange rate regime from a pegged exchange rate to a market based exchange rate. According to Dr Baqir, the second key problem of Pakistan was a large fiscal deficit and a public debt burden that was growing. However due to the ambitious and a strong economic reform program which was well managed by the Ministry of Finance. Pakistan's revenues began to grow in the range of 15-25% well above the nominal GDP growth and Pakistan’s primary balance was in surplus for nine months in the fiscal year after several years. The reduction in the current account deficit and the fiscal deficit demonstrated that Pakistan had begun to implement the economic reform program and that’s what allowed the country to prepare well and give an economic response when Covid19 struck.

The governor illustrated with the help of a slide that the preCovid19 economic reforms allowed a significant build up in the central bank’s foreign exchange reserves buffers which is one of the metrics that show how well prepared a country is to give an economic response. The country saw a noticeable rise in the foreign exchange reserves between the summer of 2019 till about February’2020. At the same time, Pakistan had a big short position on its forward books and that short position was also reduced significantly before Covid19.

The second sign that showed that the country’s economic reform program was paying off was the appreciation in the markets in the form of the increase in stock prices. Not just that but the business confidence which was once shrinking rapidly had begun to improve at a quick rate.

The governor also spoke about the measures taken by the Prime Minister and central bank to address the unprecedented Covid19 crisis by introducing a comprehensive package in the form of the Ehsaas cash emergency plan, tax refunds for the exporters in order to create liquidity and an aggressive and a historical response by the central bank in the form of the highest rate cut amongst the emerging markets.

Dr Baqir said that alongside with the rate cut, the central bank had to ensure that the exchange rate has an orderly movement. The governor showed a chart of the currency depreciation in the emerging markets during the Covid19 crisis which showed that Brazil had a 22% depreciation whereas the Pakistani rupee stayed somewhat stable and depreciated by around 7% and stayed broadly orderly.

Dr Baqir also gave the details of the impact of the measures taken by the central bank in order to support the people, businesses, micro creditors and hospitals. According to him, the central bank was able to inject a liquidity of approximately 1.6 trillion which is 3.8% of the GDP in the system.

He also showed a graph that showed the proactiveness of the central bank during the Covid19 crisis.

The governor ended his talk by giving the future outlook. The governor said that although Pakistan’s debt to gdp ratio is high due to which there is limited fiscal space available but due to the reforms carried out by the Central Bank, the public debt despite some fluctuations during Covid-19 is expected to continue on its downward path.

He also said that despite having a high debt to gdp ratio, Pakistan’s external debt compares well to other countries.

Dr Baqir also said that due to the measures taken by the government especially the NCOC which was led by Asad Umar, Pakistan’s business confidence and large scale manufacturing according to the State Bank’s survey saw a considerable rebound.

According to Dr Reza Baqir, other real economic indicators were showing a good recovery as well.

The governor finally gave a medium term growth projection and said that he’s confident and hopeful that Pakistan can resume the medium term growth trajectory of about 5%.

Towards the end of the session Kalipso Chalkidou who is a Professor of Public Health at Imperial College London and Director of Global Health Policy at the Center for Global Development expressed her views on Pakistan’s Covid19 story. According to her despite the global uncertainty about the pandemic, Pakistan’s Covid19 story is a success story and this achievement is due to the commitment and perseverance shown by Pakistan’s political leadership by using measures such as technological innovation, efficient coordination and effective implementation strategies especially the smart lockdowns. She also said that Pakistan’s model is one that the UK should follow in terms of tracking and testing and smart lockdowns.

Alan Gelb who is a senior fellow at the Center for Global Development and the former director of development policy at the World Bank also expressed his views and said Pakistan’s Covid19 story is eye opening and a lot of countries can learn from what Pakistan has done on the health side and on the social protection side. He also said that Pakistan’s social protection measures offer many key lessons that can be emulated by other countries. He labelled Pakistan as a leader when it comes to utilising its assets to carry out social protection measures.