When, early this year, COVID-19 hit the ramparts of the country’s teetering political and economic structure — which have been beset by decades of decay and disarray, the regime had no clue how to deal with it. Almost reflexively, it started to seek refuge and support (on a transactional, rather than ideological basis) among the usual suspects that now include, besides China, the US, Russia, the Arab potentates, Iran, Turkey and Malaysia. During such crises in the past, these countries have provided Pakistan generous assistance without demur.
However, Pakistan’s luck seems fraught this time, as both donors and recipients are competing for acquiring the same arsenals to fight the war against a common slippery and invisible enemy – not fighter jets, missiles or sophisticated machines, but simple goods as soap, toiletries, protective masks, hospital beds, testing kits, ventilators and, above all, armadas of doctors, nurses and paramedics, the new war’s generals and foot soldiers. To borrow the title of a famous book about the 2008 global financial crisis: “This Time is Different.”
We should worry more about saving people’s lives and caring for their welfare, rather than their economy’s health
For one thing, this is a truly global crisis and, unlike past crises, it is a negative sum game at least in the short-run. This is evidenced by the scrum for supplies of protective medical equipment (PPE) from China to fight COVID-19: United States allegedly “hijacked” shipments meant for France, Germany and Canada. Most other EU members responded by arrogating themselves their own version of “America First” exemplified by the Dutch Finance Minister who castigated Italy and Spain for “not taking care of themselves,” echoing Mrs Thatcher’s famous dictum “there is no such thing as society.”
In Pakistan, where regional disparities have played a significant role in promoting divisive tendencies, Punjab and Sindh – roughly representing the richer and poorer segments of the country’s population – were playing from much the same playbook at the national level. Inter-provincial rivalries, fuelled by powerful lobbies and interest groups were surfacing on the issue of the timing and extent of the lockdown, with Imran Khan dragging his feet and obfuscating and prevaricating the articulation of a clear policy direction in three consecutive broadcasts before the lockdown was finally clamped, albeit with considerable bickering on key issues. This wayward dithering, which has become IK’s signature response in moments of crisis, popularly known as U-turn, has cost the country dearly in lost time and absence of preparation to meet the serious challenges facing the country.
What is even more disquieting is that after each such faux pas, instead of acknowledging his mistake and undertaking a course correction, IK tries to distract attention by launching a more outlandish venture – very often to aggravate and exasperate his foes (whose numbers keep rising) or to placate and patronise his friends (whose numbers keep declining).
It is fortunate, however, that the IMF, stunned by the ferocity of the raging COVID-19 storm that is engulfing poor and rich countries alike, has put on hold Pakistan’s one-year old EFF program, providing its economic managers some fiscal space and much-needed room for manoeuvre in these troubled times. It remains to be seen if they would step up to the plate and turn this challenge into an opportunity, which they have already missed on two previous occasions in the short period the economy has been under their watch. First, by dithering to reach the IMF and the second by their inability to meet the conditionalities of the IMF program, which was poorly negotiated in the first place.
COVID-19 covertly entered Pakistan – almost literally on the backs of passengers from abroad who had had some contact, directly or indirectly, with those who happened to be in China, Iran or some other affected country, since the eruption of COVID-19. Once it entered Pakistan’s borders it acquired its own dynamic that the inept border authorities, lacking proper and timely protocols, were unable to nip in the bud.
This put the government in a serious, existential dilemma: life versus livelihood.
Unless the government stopped the spreading of the virus immediately, its exponential growth would become uncontrollable and would far exceed the nation’s limited capacity to provide the needed health facilities. Perennial under-investment in social sector notwithstanding, the pioneering efforts of Pakistan’s most famous economist Dr Mahbubul Haq to put the issue on the global and national agenda in the 1990s and despite the hue and cry raised to demand an increase in such expenditures to at least 10 percent of GDP, successive governments, including the present, paid only lip service to the demand. However, this is hardly the time to lament the past, but to squarely confront the reality on ground zero.
The only tried and tested way – based on the successful experience of China, South Korea, Singapore and New Zealand – to counter the COVID-19 onslaught is to clamp a complete lock down by stopping all non-essential activities. However, lockdowns bring unbearable hardships on the extreme poor, such as the daily wage-earner and the self-employed, especially in countries with weak social protection systems, such as Pakistan.
Although the incidence of COVID-19 cases in Pakistan, as officially reported, has been contained to some extent, thanks to external help, especially from China, there is little room for complacency and the faux spirit of self-congratulation that characterizes the press conferences of official spokespersons on a daily basis. In the absence of sufficient tests to determine its likely potential spread, the current figures (8,175, as of 20 April) and the projections (which are estimated to reach 50,000 by 25 May) based on them results could well prove to be illusionary.
The somewhat fortuitous flattening of the curve has been temporarily achieved by the cooperation of the clergy in limiting the size and extent of religious congregations in large cities, as well as by the public awareness campaigns launched in the media. With the advent of Ramzan, the risks of more rapid spread of COVID-19 and clashes with public and the police are likely to increase. By caving in to the obdurate and anachronistic religious lobby’s demands for allowing taraveeh and other large congregations to take place in the mosques, even though they have been disallowed by Saudi Arabia and Iran, the government is putting the lives of hundreds of innocent people in danger through the inevitable increase in the ferocity of COVID-19.
The current temporary subsidence of the curve can’t be maintained for long, without firmly maintaining the lockdown, not only through the force of “sticks” (pun intended), but also the inducement of “carrots” in the shape of well-designed, well-implemented and generous income support programs, such as the BISP was originally intended to be, despite being under-funded. The government has endorsed, revamped and renamed several such programs, under the flagship of its Ehsas program and mobilised them for supporting the poor who are likely to have lost their livelihoods because of the lockdown. But these plans, which hardly represent any additions to previous allocations, are likely to fall considerably short of their needs and will lead to further public unrest. They need to be improved and widened in scope, both for conceptual clarity and timely implementation.
Now that the IMF has decided to loosen its leash, the government can afford to adopt a more aggressive posture in dealing with the twin challenges it faces: fast-tracking the 3Ts: testing, tracking and treating in order to flatten COVID-19’s exponential growth trajectory and providing cash transfers to those households whose livelihoods have been severely affected by the pandemic and the lockdown to contain it. If the economy is opened up prematurely in the hope of stepping up its growth rate, it would prove counterproductive and many more deaths would occur at the hands of the virus than would be saved by preventing hunger through abortive attempts to reclaim vanishing livelihoods of the poor.
There is no doubt that once the COVID-19 storm loses its steam – even if this may seem to be a rather distant possibility now – checked by the discovery of a vaccine or through some other Malthusian or Darwinian deu ex machina, human beings will have to refashion their life-styles in a manner more compatible with the sustainability of the environment. The present obsession with economic growth, material well-being and nonchalance for others, may have to give way to a more balanced and equitable pattern of development than in the past half century or so.
But that is in the long-run, for which Keynes didn’t care too much, as he rightly conjectured we will be all dead by then, pandemics or no pandemics. In the more immediate future, however, we should worry more about saving people’s lives and caring for their welfare, rather than their economy’s health, defined in terms of narrow macroeconomic fundamentals. We need to have more ICUs and ventilators in our hospitals, rather than to get our economy admitted as a terminal patient in the highly indebted countries’ ward of the IMF. We should forget about the demon of fiscal deficits and the mantra of fiscal responsibility, whose fear is preventing more money being put in the hands of the poor and providing our frontline warriors with “whatever it takes” to fight with vigour the twin battle against poverty and CONVID-19, which a Government of the rich can’t be trusted to win.