Laraib Nisar
The global virus pandemic is profoundly affecting the whole World in different ways. With the unavailability of an appropriate antiviral or a vaccine, non-pharmaceutical precautions were the only way to restrict the spread of COVID-19, but since the SOPs were not followed properly by all and sundry across the country, a second wave of COVID-19 is on the go in the Pakistan. The Government announced a second spell of COVID-19 in Pakistan on October 28, 2020, when a daily increase in cases reached 750 compared to 400 to 500 a few weeks ago. Sudden increase in active cases from 6,000 to 11,000 and hospital admissions with critical cases requiring ventilators were recorded across the country. The data released by the National Command and Operation Centre (NCOC) indicates that the current positivity rate has surpassed 5 percent as compared to the previous figure of less than 2 percent since the last three months, and the average number of deaths is exceeding 11 per day.
With the revival of the deadly virus, the Government is turning back to the model it used earlier to stop the spread of the pandemic. With the Government’s announcement of closure of educational institutions, limiting business hours, imposing localized lockdowns in the hotspots, and makings masks and social distancing mandatory, the strict implementation of a comprehensive lockdown across the country is expected in the coming days.
The lockdowns result in mass closures of sales outlets in the export markets and factory shutdowns in Pakistan. With the clogging supply line, exports are likely to slide down in the approaching months. Amid the likely economic downturn, a ray of hope lies in the fact that some of the product categories of Pakistan’s export interest, especially clothing and bedding, have a high potential of picking up in the medium to long term.
However, if we focus on the brighter side, all the above-mentioned challenges associated with lockdowns have created some opportunities for Pakistan’s fragile economy. The global recession and mass unemployment has largely contracted the disposable incomes leading to a huge change in the consumption patterns. With the deepest economic recession in history since World War II, the consumers are more attracted towards buying less costly luxury goods. This has created sustained openings for Pakistani suppliers as production of goods for lower and lower-middle income class is their strength.
The interruption in global supply chains has made different companies realize that over-relying on only a few suppliers for essential goods is risky. Such businesses are working on expanding their supply chains, generating opportunities for Pakistani enterprises to enter some of the global supply chains. Though agility and effectiveness will be essential for successfully seizing such opportunities.
The Food and Agriculture Organization (FAO) of the United Nations has predicted a disturbance of global food markets, interruption of regional agriculture cost chains, unavailability of food supplies in the world, hence the prices of food commodities are escalating globally. Pakistan being an agricultural country has huge potential in this sector. Rice being the second main export item of Pakistan and chiefly an export-oriented crop of the country is likely to get a positive impact on the average unit value, increasing the dollar yield.
With social distancing and other lifestyle changes becoming the new normal, the product and services domain has completely transformed. Pakistan can benefit from its exceptional textiles and leather industry by introducing new product ranges including fabric masks, protective gears, and personal care products. Moreover, Pakistan can venture into new goods, e.g. paper products and disinfectants, utilizing the indigenous raw material base of ethanol.
Since the trends and opportunities of physical retailing have been being put off due to the pandemic, the Pakistani exporters have a chance to perform overseas export by utilizing e-commerce platforms. This can be done only if they develop functional shopping platforms, appropriate payment solutions and swift delivery mechanisms.
COVID-19 spreads majorly through human to human interaction, so almost all government and private offices have been pushed to adopt the work-from-home model. This has opened settings for Pakistan’s ICT industry to provide its services, especially fintech, business process outsourcing, consultancy and software development.
With all the above-mentioned possibilities and opportunities, it is certain that Pakistan’s economy can take the blow posed to it by the second wave of the pandemic. But the government should keep in mind that the above mentioned opportunities are generally for the financially stable firms and individuals. The government still needs to provide a basic income support program to address structural problems and disparities at the grass root level. This will help reduce abuse, lessen poverty, and discourage labor misuse in terms of lower wages. Moreover, the government should keep in mind the SMEs while making business and financial policies, so that all sorts of businesses can flourish in the face of the global pandemic.
The author Laraib Nisar is a Defence and Strategic Studies’ graduate, working as a Researcher at Center for Research and Security Studies (CRSS).
