FeaturedNationalVOLUME 15 ISSUE # 17

Coronavirus in Pakistan: Soft on lives, hard on livelihoods

The coronavirus is still under control in Pakistan. Though the number of infected people is rising, yet the death rate from the pandemic is one of the lowest in the world. It may not be as harmful to Pakistani lives as it has been in other countries but it is feared it can be more devastating for the economy and livelihoods of people of the country than the rest of the world.

Calculating losses on the basis of the impact of the restrictions on business, tax revenue, international trade and the cost of unemployment for three months, the Ministry of Planning has estimated that 12.3 million to 18.5 million people in the country will lose their jobs and the economy may sustain Rs2 trillion to Rs2.5 trillion losses due to moderate to severe shocks from the coronavirus outbreak. The preliminary estimates, which are based on information received from various government entities and initial research conducted by the Pakistan Institute of Development Economics, show losses in a limited, moderate and complete lockdown. The ministry has assessed losses at Rs1.2 trillion in a limited lockdown scenario, Rs1.96 trillion in moderate and Rs2.5 trillion in case of complete restrictions on movement.

According to government estimates, about 1.4 million jobs will be lost in case of limited restrictions, which are equal to 2.2pc of the employed workforce. In monetary terms, the three-month wage loses will translate into Rs66 billion. In a moderate scenario where private offices and most shops are closed, but essential shops are open, the government has worked out 12.3 million people becoming jobless. It will be around 20pc of the employed labour force. In monetary terms, the loss of wages will be Rs561 billion for three months alone. In case of a complete shutdown, the government has assessed that 18.53 million people or 30pc of the labour force will be unemployed. These people will sustain Rs783 billion losses. In the scenario, two-thirds of the workforce are daily wagers, 30pc working on the piece rate and the rest street vendors, according to the ministry. The government has assessed Rs9.3 billion losses for the aviation sector, Rs250 billion initial loss in the stock market, Rs30 million losses sustained by the Ministry of Maritime Affairs, Rs136 billion by the Ministry of Energy, Rs55 billion by the agriculture sector and Rs8 billion by the Ministry of Railways.

Over 10,000 Pakistanis have lost employment in the United Arab Emirates after the outbreak. If the situation does not improve, most of over one million Pakistanis will have to return home and the number of jobless people would swell. Out of around 8.51 million migrant workers in Pakistan, some 3.78 million are facing direct threat of layoffs and the process has already kicked off in major urban centers of the country, according to a report released by the Pakistan Institute of Development Economics (PIDE) — an Islamabad-base research institute.

The report highlights the plight of Pakistani workers who travel in the country, especially to big cities, to earn a living. “With the calls for social distancing and lockdown, the Covid-19 outbreak has shut down business operations across the country. As projected, millions of people are facing potential layoffs but the situation is doubly bad for internal migrant workers who are staying away from homes to earn a livelihood,” the report noted.

According to official statistics, based on the Labor Force Survey 2017-18, Pakistan has around 8.51 million migrant workers and 45pc of them are engaged in informal activities, including labour, construction work, domestic help or factory work. More than 65pc live in 15 districts across Pakistan, with over a million workers just in Karachi, followed by Lahore, Faisalabad, Rawalpindi and Islamabad. It is feared the closure of business activities would force the owners to lay off their employees. Informal workers, which comprise 45pc of the total migrant labour force, would be the first to be laid off. It means around 3.78 million migrant workers would be left without their source of livelihood. They also face eviction from their places of living. A large majority of them work in wholesale and retail, manufacturing, construction, transport and communication sectors, which may be hit the hardest. Many of them live in factory dormitories, which being shut now, leave them without a place to live. With the bus and train services halted, they are left stranded with no place to go.

The International Labour Organization (ILO) has warned that the rapidly intensifying economic effects of Covid-19 on the world of work are proving to be far worse than the 2008-9 financial crisis, with cutbacks equivalent to nearly 200 million full-time workers expected in the next three months alone. The warning came after the UN labour agency had predicted that 25 million jobs were threatened by the new coronavirus. According to the agency, the latest dire assessment reflects the full or partial lockdown measures affecting almost 2.7 billion workers – four in five of the world’s workforce. At the start of the year – before the pandemic spread worldwide – global unemployment already stood at around 190 million.

Workers in four sectors that have experienced the most drastic effects of the disease and falling production are: food and accommodation (144 million workers), retail and wholesale (482 million); business services and administration (157 million); and manufacturing (463 million). Together, they add up to 37.5pc of global employment and this is where the sharp end of the impact of the pandemic is being felt now.

The situation paints a gloomy picture for the world and Pakistan in no exception. It is feared the pandemic could be more harmful to it than the rest of the world in terms of economic and job losses. The fatality rate from the virus in Pakistan is less than 1pc so far, which is far better than the world average of 3.4pc and unbelievable against Italy’s 20pc. Over three dozen patients die daily from natural causes at Lahore’s Mayo Hospital alone. So, Pakistan’s death toll from Covid-19 is less than the number of patients, who die from complications at one hospital of the country in a week. The situation requires the government to take urgent steps to save people from losing their jobs besides protecting them from the pandemic.