Earlier this year, as COVID-19 forced countries to shut down, developing economies with weak healthcare systems like Pakistan were affected the most. The United Nations had already warned about the impact of lockdown on developing countries’ vulnerable populations and termed access to healthcare in such extraordinary circumstances a matter of utmost emergency. The question remained as to how Pakistan could contain the pandemic while maintaining the competence of healthcare facilities.

Two of Pakistan’s neighbours had taken different approaches to deal with the pandemic. China put 60 million people in Hubei into quarantine and employed state machinery to provide much-needed relief, sanitise the whole area and build spacious healthcare facilities in a surprisingly short amount of time. If official figures coming out from Wuhan are to be believed, the authorities have been successful in flattening the curve. Meanwhile, India initiated a complete lockdown, bringing the $3 trillion economy to a halt and unleashed an unintended migrant and hunger crisis, resulting in a decline in access to healthcare by the migrants.

Pakistan, on the other hand, followed a hybrid approach but took much time before considering suitable policy options. The initial reaction of the government seemed to underestimate the effects of the virus and business went on as usual. Only, after the cases spiked to more than 3000, did the federal government announce a limited lockdown. However, high-risk contact events such as congregational prayers along with weddings and shopping bazaars (markets) were not regulated and as a result, the lockdown could not be strictly enforced. As of today, COVID cases in Pakistan have crossed 230,000 and as expected, the country’s healthcare system is bound to face severe capacity constraints.

With regards to the fiscal approach, however, the government was quick to provide cash transfers to the severely affected. Under “Ehsaas” welfare programme, the state aimed to give $71.86 to about 12 million individuals. According to Dr Sania Nishtar, Special Assistant on Poverty Alleviation and Social Safety to the Prime Minister, till 7th of July, $1 billion had been disbursed to 10 million beneficiaries. Such fiscal relief was necessary to sustain the country’s poorest and is highly commendable through its sheer scale, planning and execution. Along with providing much-needed financial relief, the programme will pave a way to increase financial inclusion as well, which is expected to result in having access to private healthcare by the poor. However, such a policy can be deemed a demand-side intervention. There needs to be a similar supply-side intervention focusing on public healthcare reforms.

Pakistan is no stranger to negative supply shocks. With more than $9.7 billion damage to infrastructure, the floods of 2010 devastated $500 million worth of wheat and slashed nearly 3 percent off GDP growth in the subsequent year. Furthermore, more than 5 million people instantly became unemployed with consumption and investment falling drastically. The 2005 Kashmir earthquake and the drought in 2000 were other major negative supply shocks in the past two decades. Such events put the state’s healthcare system under extreme pressure again and again and yet somehow, healthcare does not seem to become a top priority for the government (in terms of budgetary allocations).

What is interesting to note is, however, that during such shocks, Pakistan remains dependent on external fiscal injections and healthcare assistance. But, in the case of COVID-19, every country is looking inwards to counter its effects. Thus, even the traditional allies, China, Saudi Arabia, and Turkey do not have the luxury of coming to Pakistan’s rescue. Although sanitisers, masks, and protective gear for medical professionals have been provided by Beijing, the constraints of providing fiscal relief are extremely high. Thus, in order to be prepared for a similar supply shock and limit the exposure of vulnerable segments of the society, Pakistan must devise alternate long-term strategy i.e. invest in its healthcare system and reduce its dependence on external sources of aid and funding.

With the life expectancy of 67.1, Pakistan ranks lower than Laos, Senegal, and Iraq. Bangladesh with an average life expectancy of 72 is 20 places ahead. According to the Food and Agricultural Organisation, the global percentage of undernourished people has declined from 37 percent in 1970 to 13 percent in 2014, with China and India leading the way, whereas Pakistan saw an increase of 8 percent between the years 2010 and 2016. The under-5 infant mortality rate in Pakistan stood at 69, far ahead of India and Bangladesh with 36.1 and 32 respectively, implying for every 1000 children born, 69 die before turning 5. On top of that, as of 2017, Pakistan only spends only about $44 per person on health, far behind China, India, and Afghanistan, which spend $440, $69, and $67, respectively. In terms of percentage of GDP, the country still lags behind its neighbours. In 2018, the country dedicated 2.9 percent of GDP to the health sector, whereas, China and India spent 5.5 percent and 3.5 percent respectively.

While it is true that as an emerging economy, Pakistan lacks the fiscal space, policymakers must take the long-term view instead of a short-term. Along with disbursement of much-needed cash to economically vulnerable groups, the state should announce an “investment package” for the public health sector. COVID or no COVID, Pakistan urgently needs healthcare reforms and a higher dedicated share of the state’s resources to increase the capability and capacity of the country to be able to tackle supply shocks.