Imran Khan’s Strategy to take Pakistan out of COVID-19

The outbreak of COVID-19 has massively impacted densely populated countries of South Asia. Pakistan is one of them. It is also confronted by the challenge of economic plans that Imran Khan’s government should pursue to uplift the already vulnerable economy amid the global pandemic. This analysis looks at the economic policies and how these policies will impact Pakistan’s economy.

Pakistan’s fight against COVID-19 started with the question of evacuation of Pakistani students from the Chinese city of Wuhan. Additionally, the government had to bring back Pakistanis stranded in Iran in February, when a mass outbreak was reported in Pakistan’s western neighbourhood. Following the reporting of the first COVID-19 case, National Security Council held an emergency meeting on 13 March to lay out a road map to deal with the deadly virus. Consequently, the government decided to close the border with Iran and Afghanistan along with suspending flights from Iran.

The International Monetary Fund (IMF) has announced US$ 1.386 billion to help Pakistan fight COVID-19.

A national action plan was put forward by the National Command and Operational Centre, which is responsible to undertake measures against COVID-19 in the country. Large scale public gatherings were prohibited and the practice of physical distancing was instructed to be observed all across the country. Educational institutes were closed and college dorms in large cities were converted into quarantine centres. The military was called in by the government to deal with the deadly virus. Amidst the  pandemic, Pakistan’s major battle is to manage public health facilities, a vulnerable economy and reach out to poor segments of the population.

Imran Khan has urged international organisations to introduce global initiative for debt relief, in support of developing countries that are fighting against COVID-19.  The International Monetary Fund (IMF) has announced US$ 1.386 billion to help Pakistan fight COVID-19. This will help mitigate the impact that COVID-19 will have on a fragile economy. The World Bank has forecast the economic situation in South Asia as terrible. A 1.5% billion contraction in Pakistan’s economy is estimated by the IMF. Pakistan’s weak economy is under a great burden. The stock market has shown a 10% drop with $610 million flown out of the country.

Human suffrage will increase in the coming weeks. It is expected that the poverty rate will increase from 23.4% to 58.6%. Astute planning is required to keep the uncalculated damage under control. A major blow to Pakistan will be in the form of people living below the poverty line doubling and reaching around 125 million.

A 1.5% billion contraction in Pakistan’s economy is estimated by the IMF.

Imran Khan was not in favour of a nationwide lockdown as undertaken by several developed countries. Pakistan cannot afford a shutdown of its economy since it is already in recession. Even a complete lockdown of a single province is not possible since its aftermaths will be catastrophic for a state like Pakistan.

Imran Khan’s government has decided to open some key industrial areas which are the need of the hour. Restrictions on cement, e-commerce, fertiliser, chemical, and glass manufacturing were lifted to stem economic fallout, as announced by Hammad Azhar, the current Federal Minister for Industries and Production. By doing so, the daily wagers will be able to secure jobs, since they are the ones who are suffering the most. The debate is still ongoing about the future consequence of the opening of small industrial complexes to support individuals who are part of Pakistan’s substantial informal economy.

To boost the economic prospects, Imran Khan has given incentives for the ones who will invest in the construction sector. They will not be asked to declare their sources of earning. The taxation policy is made too steady for the industrialists. 90% leverage on fixed tax is announced for the investors who will invest in Naya Pakistan Housing Authority. Rs30 billion subsidies for the Naya Pakistan Housing project have been announced. Withholding tax is lifted from construction-related industries except for steel and cement. Capital Gains Tax is no more applicable for those who will sell properties. Moreover, Imran Khan has announced that a Construction Industry Development Board is to be set up for promoting the construction industry. Along with this, the government has allocated Rs200 billion for those who have lost their jobs.

To boost the economic prospects, Imran Khan has given incentives for the ones who will invest in the construction sector.

Ehsaas program is another major initiative taken by Imran Khan during the prevailing crisis for poverty alleviation. The government allocated funds worth Rs144 billion for Ehsaas program. By this program, the deserving families are receiving Rs12,000. These selected families are chosen through a proper mechanism to ensure that the system is kept transparent. It is expected that around 67 million people will receive these funds.

The Corona Relief Tiger Force is established by Imran Khan which will help in understanding the ground situation in all parts of Pakistan. Currently, more than six lac volunteers have registered. The Force will be used to implement SOPs at mosques, management of quarantine centres, and distribution of ration to the deserving people. It comprises of teachers, students, doctors, medical workers, and other social workers. These volunteers will work under a code of conduct. This task force comes under a district committee that encompasses deputy commissioners, district police officers, and all members of the national assembly.

The current line of action regarding economy is to keep the businesses afloat. The decision of opening a few industries will be appreciated as it will help the industrialists to start taking decisive measures to restrict economic losses. Although the current incentives will act as a stipend for the industries, it still requires further support from the government.

The Ehsaas program will help to support the vulnerable but the question is: To what extent? For how long will the government keep this program? A large population in the slums of Pakistan is not even registered to the Ehsaas program since they don’t even have a registered CNIC, so how will they be reached.

Imran Khan’s decisions will be criticised. Why would anyone invest at such a time when the uncertainty of the current economic situation exists. The investment will be at a halt for at least six months, since every investor will be focusing on the current losses. So, how will the tax leverages in the construction sector be beneficial, if the amount is not invested? Even if investment in programs like Naya Pakistan Housing Scheme are aimed at the vulnerable, the question remains, what will be the obligations on builders and developers? And how will the government keep a check on them?

In the coming days, Imran Khan’s decisions will be tested by the changing dynamics of the industrial sector, the health sector, and the daily wagers after the lifting of the nationwide lockdown. It is to early to predict how successful has Prime Minister been in providing an economic ventilator to Pakistan. For Pakistan, it is important to bolster its efforts to counter the uncalculated implications of the pandemic. The next 2-3 months are crucial for Pakistan’s economy, and it is important to keep an eye on further development, at both the domestic and global levels.

Ali Zafar

Ali Zafar

Mohammad Ali Zafar is currently pursuing a degree in International Relations from the National Defence University, Islamabad.

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    Shaheer Ahmad Reply

    May 28, 2020 at 8:52 pm

    It’s a good piece of work done by author

  • Avatar

    Sanaa Reply

    May 29, 2020 at 10:21 am

    Great analysis 👌

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    Hiba Khan Reply

    May 29, 2020 at 10:38 am

    A thorough explanation of Imran khan’s initiatives. well-versed analyses. Although the current steps seem convincing, the prospect of Tiger force is seemly blurred as for now no update can be is seen regarding how useful Tiger Taskforce is.

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