Imran Khan’s government seems have to have done the prudent thing in gradually starting the process of re-opening the economy while side by side trying its best to ensure people’s safety. Pakistanis in the meantime are playing their part well by remaining patient, keeping essential national services running at great personal risk, opening up their purses in helping the government to take care of poor families with no real income to sustain themselves, and then there are others who are contributing by just staying at home, away from friends and extended family, and more importantly by agreeing to not congregate inappropriately at mosques and critical social gatherings such as funerals. It has not been easy for anyone by any stretch of imagination. However, in return of its support, the public has always just wanted the answer to a simple question; post COVID-19, what is the government’s plan to economically take Pakistan forward?

On a positive note, this has somewhat been answered. Things finally seem to be falling into place and perhaps for the first time in two years, this government appears to be making the right policy choices. Employment generation activities are being resumed, albeit after partnering with the private sector to keep working environments safe. Prime Minister Khan has acted proactively by securing a debt moratorium for at least a minimum 12 months (cushion of $12 billion in returnable + accruable interim interest) and a supporting loan of $1.40 billion on easy terms. The Pak Rupee has started to stabilise again (if last week’s Friday closing is anything to go by). The stock market has resumed an upward trend. Interest rate finally moves down in to single digits with expectations that it will drop further. Inflation is declining; and last but not least, despite a global lull, the economic mood (perception) within the country is beginning to lift.

So what next? First and foremost, the focus in the coming days on controlling the disease needs to remain, so that not only the number of COVID-19 cases come down significantly, but also that the trend starts to show a negative trajectory. The efforts to: make testing as widespread as possible, to develop a homegrown vaccine to the pandemic, to establish a contact and tracking strategy in coordination with telecom service providers nationwide, to keep on boosting the capacity of our hospitals and healthcare services and to ensure social distancing, all have to continue on a war footing – no letting down of the guard! This is of paramount importance, since our success rate in achieving all these measures is going to ultimately determine our real readiness to tackle any flare-ups of the disease that may occur when economic activity starts to expand again, because re-opening by itself – even if it is in the right way – will still not be completely safe. The provincial administrations will need to conduct effective surveillance and help out by working closely with employers and businesses for the due carrying out (in letter and spirit) of the laid down health and safety protocols to combat COVID-19 from spreading during operations. Second, make no mistake that only an effective plan to beat the virus is the ultimate answer to how we get our economy back on track. Meaning, we should stop thinking of the health and economic responses as separate. They are not. As we go along and feel more confident, we should begin to open more businesses and put more and more people back to work.

Things will not go back to normal right away and we should expect activity to return gradually, with places like offices and stores reopening before we go to areas like cinemas, shopping malls, sports arenas, restaurants, etc. This is why this government now needs to think ahead in determining the precise conditions going forward under which the Pakistani economy will have to work as the country goes back to work, and that the financial support the poor families and the SMEs (small and medium size enterprises) need is fully in place. Third, it is by now evident that as long as there is a significant risk that the virus can start spreading again, we will have to do things differently. The direction in this needs to be spearheaded by the federal government by convening top experts from the private sector and from the sectors of industry, to come up with new practically do-able ideas on how to operate more safely vis-a-vis re-organising space, re-designing factory floor lay-outs, seating and dining arrangements, etc. in order to lessen the risk. And this goes for all businesses, including the smaller ones. Finally, the fourth and perhaps the most important from an economic sustainability perspective, we will have to go back to the drawing board to work out a strategy on how to effectively mitigate the risks arising for the Pak economy from now quite imminent global supply chain disruptions in the days ahead. Global trade growth had already slowed last year to its lowest level since the financial crisis, bogged down by a trade war between the United States and China and slowing economies in Europe and Asia. Now the WTO has issued a rather stark warning that global trade in effect could shrink further by as much as 32% (nearly one third). Ironically, Pakistan still remains an economy dominated by imports where even the most robust of our sectors, for example in the Fast Moving Consumer Goods (FMCG) sector, some of its leading companies tend to operate at an average imported input level of as high as 40% or more. Other key sectors like pharmaceuticals, automobiles, communications, electronics, footwear and edible oils come across as being even higher in terms of percentage of overall imported content.

Some would argue that this presents a perfect opportunity to start looking inwards and to rely more on homegrown solutions – and they would be right – but the thing is that realigning the direction of domestic manufacturing takes time and is not always possible in the short-term, since manufacturing invariably requires a certain minimum lead time to change. So, for now, our immediate problem is likely to be the inability of our companies, on a wide scale, to be able to source input requirements and thereby having to close down operations; in-turn leading to possible nationwide shortages and resurfacing of inflation. With the WTO’s myth of high moral ground on free and fair trade now almost shattered, more and more countries are taking matters into their own hands to counter such risks by forming their own bilateral and multilateral arrangements. Their initiatives, amongst many others, primarily include signing product specific agreements, say on medicines, health equipment, fuel(s), food essentials, key spare parts to keep domestic industries operational and on a more wider level cooperation in the areas of travel and tourism to facilitate their people in being able to undertake relatively risk free vacations and business trips. For example, some European countries are proactively endeavouring to form groups that will tie them in mutually beneficial arrangements, based on essentially the commonality of having similar threshold on COVID-19 cases or having a similar level of risk from the disease, while avoiding the ones where the incidence of the disease is higher.

For example, the Czech Republic, Croatia, Hungary and Austria are working jointly in combining to open tourism, business trips and movement of some essential food supplies, initially only between themselves. As the world increasingly turns protectionist and gets fragmented, Pakistan will also have to think of such out-of-the-box endeavours that safeguard its interests and protects its people from looming supply chain disruptions by forming new prudent partnerships in its close proximity. Also, in a new post COVID-19 world, some countries have begun to limit food exports. Vietnam has already barred exports of rice, Thailand has blocked eggs and Russia has restricted the outward movement of grain, while Kazakhstan has prevented grain, potatoes and other agriculture products from leaving the country. As we move in to the post COVID-19 era, it will be important to remember what this crisis has taught us and what we have to do. Dispensing innovative economic management is a skill that requires the right tools, expertise and some hard-won experience, and can often get to be quite different from the typical winning strategies in a sports field – in fact the very opposite in many ways. The quicker we realise this and assemble a dedicated team with the sole purpose of innovatively guiding the economy through some very troubled times ahead, the better it will be for our chances to survive what is by now being billed as the mother of all global recessions, the worst since the 1850s. The Prime Minister has to ensure that this time he gets it right!