All over the world, almost all countries are ramping up their efforts to confine people in their homes to contain the deadly virus as the global death toll has exceeded 120,000. Situations of lockdown in some countries are reminiscent of curfew-like restrictions. Economic activities, schools, private and public sector institutions are shut down. Soaring inflation, unprecedented surge in unemployment rate, steep decline in sales in every commercial sector, sharp rise in poverty level, and shutting down of industries have made situation the worst from worse in Pakistan which was already struggling to keep its crippling economy afloat and to bring the 39 million poor out from the shackles of abject poverty.

When it comes to tackle the pandemic challenge, the incumbent federal government deserves applause by rightly enforcing incremental lockdown in the country in contrast to the USA, whose president didn’t bother the danger of Virus and even in our neighboring country India hastily imposed 21-day nationwide lockdown which resulted in chaotic movement of thousands of people to their hometowns from big cities. Likewise, Prime Minister Imran khan has announced a historic emergency relief package of Rs.150 billion in the cash support for the poorest 12.5 million families; and Rs.100 billion relief package for the business support in the country.

According to a World Bank’s recent report, Pakistan may face recession — for the first time when the country had endured immediately after its creation. The bank also warned that the economy might shrink by 2.2 % and projected national output might stand at 1.3 % with sharp decline in per capita income. For Pakistan, shutting down the country is a very complicated choice to avert the health crisis as about 39 million people are below the poverty line. Prolonged Coronavirus lockdowns can escalate the food insecurity, malnutrition, and poverty in marginalised sections of society who are mostly daily wagers, laborers, and factory workers.

Amidst coronavirus lockdown, the textile sector is in shambles as their international orders have been cancelled and the sector has been asked to suspend the shipment for at least three weeks. Textile retailers and outlets are closed and there is a complete disruption in the entire domestic textile supply chain, putting at risk the jobs of thousands of factory workers. Pakistan has two main sources through which it is able to replenish its foreign exchange reserves: one is exports, and the other is remittances. Pakistan’s exports during the period July-April (FY 2019) stood at $20.01 billion. Textile sector has a share of 59% of our total exports, and it contributes 8 % of the country’s GDP. Most importantly, the textile sector employs 40 % of the total workforce in Pakistan.

According to the commerce ministry estimate, exports could either plunge to by 25% ($1.336 billion) at the minimum or by maximum 50 % ($2.672 billion) at the maximum. It mainly depends upon the containment of fatal virus, and on the longevity of lockdown in the country. Immediate and direct impacts of the pandemic will be long-lasting and an economic recession can span a year or even more than it. The longer lockdown is continued, the deeper the debilitating impacts to the economy will be and the slower the recovery will be.

Unusual times entail visionary leadership, bold decisions, cooperation and patience on the part of the public. Public in general, and business in a particular need to brace themselves for the long-term fallout of the pandemic, and they need to understand what government can do is to moderate and cushion the effects of a downturn as almost the whole world is ensnared in a catastrophic recession delivered by the Coronavirus pandemic. Even after the virus is tamed, financial hangover will persist for years to come.

Government needs to formulate such a strategy as it should prevent the economic slump from turning into an immense financial crisis. The government should immediately come forward to rescue the textile sector by issuing special concessions and relief packages. For this, the government will have to immediately take the following urgent steps. First, it should urgently release the sales tax refunds under the Rs.100 billion relief package for the textiles exporters to resolve cash-flow problems. Second, utility bills need to be waived for three months. Third, turnover tax and sales tax should not be charged for a year.

Fourth, the government should support the sector in paying the salaries of their employees for at least three months as it will help prevent large-scale layoff. Fifth, there is a need to waive interest on past loans taken by the sector from banks, and the interest rate should be cut down to 7.5 % as low interest rate will help the sector to survive in this crucial phase. Sixth, the government should revive the zero-rated policy which was withdrawn in June 2019. There is an urgent need to make a textile supply chain smooth and running by timely importing raw materials such as dyes and chemicals. For a smooth supply chain, the government would have to partially relax transportation restrictions.

Prime Minister Imran khan has rightly allowed certain construction and textile industries to partially operate them. Similarly, partial opening of textile outlets with extreme care should be allowed. Restriction on the movement of the textile workers should be eased to reach them to factories. Similarly, there is also a need on the part of the textile sector to evolve and adapt themselves with the changing circumstances as well. They should introduce online shopping facilities through android mobile apps and website orders. Businesses need to understand that the future is for those who are working with the pace of time. Digitalisation has become a need of the hour and in these unusual scenarios, it has become even more inevitable to use digital tools in our businesses to keep them afloat.

The writer is CEO of Premium Group.