Pakistanis suffered an ‘unprecedented shock’ during first COVID-19 wave: Study

The first wave of coronavirus pandemic had an ‘unprecedented shock’ on the lives of Pakistanis with the unemployment rate skyrocketing and income declining revealed a new study.

As per the study conducted by Mahbub ul Haq Research Centre at LUMS titled COVID-19 Pandemic's Economic Burden in Pakistan, which took data from the Pakistan Bureau of Statistics’ Special Survey for Evaluating the Socio-Economic Impact of COVID-19.

“The evidence shows that Pakistani citizens experienced an unprecedented shock because of lockdowns during the first wave. We find that the unemployment rate increased by 34.1 percent between the pre-lockdown and the first wave lockdown periods and mean income fell by over 42pc."

However, the survey highlighted that not all types of citizens experienced a shock of the same magnitude. “Citizens engaged in the urban and rural non-farm economies faced a bigger income and employment shock than citizens engaged in farm activities.”

The unemployment rate increased by 42pc in urban areas and 38pc in the rural non-farm economy. The average income of these citizens fell by 48.7pc and 47.2pc respectively. As opposed to this, unemployment rose by 4% and income declined by 6.5% for respondents engaged in farm employment.

As per the study, the PBS survey shows that the biggest loss of income and jobs was experienced by causal labour, however employers and the self-employed also experienced a sizeable shock.

The study pointed out that “the period of respite after the first wave resulted in robust recovery for citizens.” However, the recovery has been incomplete it highlighted as around 3 million citizens were unable to recover their jobs a quarter after the end of first wave lockdowns and average income in November 2020 remained 5.5pc below its pre-lockdown level.

On the lessons learnt from the first wave, the study said that there are large livelihood costs associated with even short duration lockdowns in low-income economies. It said that Pakistan’s low infection rates allowed it to avoid making the hard choice between closing the economy and reducing the burden on health services except for short periods.

However, with the much lethal third wave “the government will need to keep coming back to this ‘hard choice’ unless actions are taken to overcome the pandemic. The key to this is an expeditious roll out of the vaccine program.”

Secondly, the economic shock associated with pandemics like COVID-19 requires the institutionalization of emergency social assistance with much broader coverage that includes the lower-middle and middle classes.