Economic crises and global Health

UNEMPLOYMENT, DEFLATION
Saqib jawed, Macroeconomics II, 10-JULY-2020

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Economic crises and global health (22345)

ABSTRACT The world is facing an unprecedented global economic crisis, with many countries
needing to reconsider their level of health care spending. This paper explores the many
consequences of the global economic turndown on Pakistan’s health, including reduced
government and donor spending and increased poverty with the consequent diversion of funds
away from health. Nevertheless, these challenges may provide opportunities not only to mitigate
the adverse effects of the economic crisis but also to institute some much-needed reforms that
may not receive political support during more affluent times. Our suggestions focus on setting
priorities based on the national disease burden, prioritizing prevention interventions,
demanding results, curbing corruption, experimenting with innovative funding mechanisms,
advocating for increased funding by presenting health spending as an investment rather than an
expense and by selected recourse to civil society interventions and philanthropy to bridge the
gap between available and needed resources

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History:
Past trends
There are various pandemics that hit the world and changed its economy created
unemployment deflation and devaluation of money for the whole globe the pandemics that hit
the world like ebola,HIV aids these deadly viruses has cost a lot of damage for the country and
the Spanish flu that hits the world in 1918-1920 had the similar measures that are taken today
during this pandemic 1919 28 January the authorities and health minister restricted to close all
the school,colleges,mosques and gathering of the masses they are avoided to have a close
contact and to wear mask the street were sprayed by phenyl. Drawing an international case
study of influenza. The progress in the infectious diseases and prevention, control and treatment
has improved our ability to respond to such outbreaks but in the world of today that we are
living the question is how the graph of the covid 19 has gone with such a fast pace? And that is
due to Globalization relating to the human behavior and mobility have increased the threat to
the transmission to the pandemics.

Smart lockdown

And some states of the Spain it was made to seal the border and smart lockdown in the state
as the mortality rate was increasing the economic effects were similar of Spanish flu at that time
of corona in a newspaper October 1918 and for that reason it was reported 30% decline in the
sales of groceries

SHORT OUTCOMES

At the time of Spanish flu GDP/capita was decreased by 6% of the state same as the case of
corona virus it was also noted that the countries who has taken the necessary precautions and
measures at the end the pandemic there GDP has got more economic boost and growth as
compare to other countries with late measures they struggled.

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Current status:
INCREASE IN THE SOVEREIGN DEBT

Today we are facing the era of deep recession of due to pandemic. Many of people have been
died many of them are suffering people are highly concerned to invest in the health care
according to economics people are better off to take necessary measures to take care of
themselves and their family due to this pandemic situation. Current estimates that corona virus
is less deadly than the other viruses like (SARS, and Ebola) but covid 19 has the highest
transmission rate of affecting others than previous viruses. lower investment on education,
infrastructure has been made according to the economic intelligence unit (EIU).sovereign debt
that are continuously received by developing countries would lead to a double recession.
According to survey before the crises that shock in the world 6M people were unemployed but
due to the current status of covid 19 16M people are tend to unemployed earlier this week the
international labor organization (ILO). An agency warned the pandemic posted the most severe
crises it was said that outbreak was expected to wipe out 6.7% across the globe the equivalent of
195 million full time losing their jobs.

Resource management

On the economic front the sudden closure of large industries, small and medium enterprises
ports airports have jammed the economy of the country as a whole although many “charity
organizations” ( like JDC CHIPA SYLANI)have jumped into to provide the essential food to all
the deserving people but the number is quite too large. After the lengthy deliberations the
government has started to ease the lockdown so that industries and other small enterprises can
run with the strict SOP’s https://tribune.com.pk/story/2202021/covid-19-impact-economy

Objectives:
How the massive unemployment has affected the GDP?

How the output of the nation could be increased?

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How can we maintain such a stability in the price level?

How the government is financing the public needs?

As a result due to the situation of quick response of government to inject the money supply in
the market to support the households they have made about 7 billion US DOLLARS in terms of
liquidity to support the households biggest challenge for the countries like Pakistan Bangladesh,
Nepal, india all the countries that doesn’t have the enough resources to meet the daily need of
kitchen money there are given incentives to them as governor state bank of Pakistan and the
prime minister said that the “lockdown are the luxury for a rich”
https://www.cnbc.com/2020/07/02/pakistan-central-bank-governor-on-economic-challenges-
during-coronavirus-pandemic.html

Expansionary monetary policy:

Pakistani government is using the monetary policy to lower the interest rate to 7 %and increase
the money supply in the market as to relief burden from people.  (i) supporting hospitals and
medical centers to purchase equipment to detect, contain, and treat COVID-19 (\33 hospitals,
PKR 5.9 billion, to date (ii) stimulating investment in new manufacturing plants and machinery,
as well as modernization and expansion of existing projects 13 new projects, PKR 8.8 billion, to
date (iii) incentivizing businesses to avoid laying off their workers during the pandemic (1,700
Small business enterprises , PKR 113 billion, to date). https://tradingeconomics.com/pakistan/interest-
rate

Protecting business

Setting the right foundation to start the economy is imperative for the government. The
economic boost package contains a whole range of fiscal measures (tax breaks, financial support
via utilities, fuel and transport subsidies, concessions and tax refunds) to protect exporters and
businesspersons. The government has also announced a separate package worth PKR 100 billion
$600.42 million just for small business enterprises, which form close to 90% of all enterprises in
Pakistan

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Using technology to create awareness:

Pakistan is coming up with innovative solutions and exploring the use of technology to create
awareness, overcome the risks, and contain the shock created by such pandemics. To promote
public knowledge, the government has, in collaboration with the telecommunication industry,
(PTA) replaced ringtones with an awareness message to the caller about the dangers of Covid-19
and measures that can be taken to remain safe. The government regularly sends an SMS to
encourage people to wash hands and practice social distancing and also help line is also given for
each province that they can call and get the consultation. Authorities are also contacting
suspects of confirmed cases through mobile tracking and pushing them to get their tests done.
https://www.theigc.org/blog/covid-19-pakistans-preparations-and-response/

Flow of study:
As earlier we talked about the smart lockdown were imposes in the past to prevail the deadly
viruses we would the graphical representations of how the demand effects has changes the
economy has a whole. As in the case of the pandemic stock markets are going in the loss.
Investors are looking forward for future to save the money and sell the assets which are liquid to
overcome the crises and help the economy to grow. But the health sector has got number of
investment in the infrastructure, paramedics and the shares of drug of drug selling companies
like (GSK),(SEARLE) have got the highest numbers of shares throughout the market. People are
bound to purchase the drugs they can’t risk their lives for that reason govt of Pakistan, and many
others have taken a high debt from foreign and IMF. This is the the one case of scenario on the
other hand there are the use of the technology for the awareness of the current situation. We
have also discussed the statistics on working from home.which everyone doesn’t have a
flexilibity Pakistan. The government of paksitan has also taken many steps to not die the poor in
the lockdown in previous current situation and objectives also we talked about the America
unemployment ratios which is highest in numbers further we would the number of beds,
infrastructure and spending on the total GDP of Pakistan in the health sector and the whole
statistics

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Unequal access to healthcare combined with a lack of social protection

Unequal access to healthcare is a problem, since this disease does not differentiate between the
rich and poor. Yet the poor are far away than the rich in having tools such as access to private
health care, better education, and option to work from home, and access to insurance to lessen
the shock of such outbreaks. In fact, this particular coronavirus can be up to 10 times more
deadly for the poor
The need for social protection is also almost always underline during an emergency. In Pakistan,
social protection expenditure is just under 2%, far lower than the global average of 11.6%. Most of
the informal sector is not covered by such schemes despite its contribution to the GDP almost
1/3 a) grossly unprofitable The Pakistani equivalent of a public distribution system, the Utility
Stores Corporation, is and unlikely to plug gaps if food supply chains are disrupted

.
Methodologies:
Major occupations 1st 2nd 3rd 4th 5th
quintile quintile quintile quintile quintile
Manager 2.86 1.91 3.02 10.65 81.56
Professionals 17.13 9.61 7.52 15.98 49.76
Technicians and associate professionals 5.71 9.44 13.10 28.33 43.41
Clerical support workers 3.08 6.06 10.64 31.61 48.61
Service and sales workers 15.01 22.43 23.26 22.48 16.82
Skilled agricultural, forestry and fishery workers 10.46 17.65 22.22 32.03 17.65
Craft and related trades workers 26.71 15.21 18.20 25.96 13.92
Plant and machine operators, and assemblers 7.99 20.96 27.10 32.49 11.47
Elementary occupations 29.16 28.15 23.65 14.48 4.55

During the crises To work from home to keep safe during a pandemic is a luxury not all can afford.
When it comes to earning from home, the inequality of two kinds, first being the economic inequality
and second the geographic inequality. the opportunity to work from home is less than 10 percent for
those who lie in the poorest quintile while the same opportunity for the richest quintile is almost 44
percent. While dissecting Table 2 into major occupation groups in the country, the highest paid
employees have almost 89 percent opportunity to work from home in comparison to 0 percent in the
least earning occupations. These tables represent that white-collar jobs are only not highest paid but also

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are likely to protect their health and economic stability in the household because of the opportunity to
earn from home. During the lockdown that is the major issue that daily wage worker cannot work online.
This is related to development economics and sustainable growth due to the Pakistan has other health
issues and in the race of technology Pakistan is way backward as compare to the other developed nations
daily wagers of Pakistan cannot earn through working hours online they have a traditional way if the
lockdown on the country is imposed more than a month according to some economists SME’s small
business enterprise could shut down that could cause a high danger

Chart Title

Manager
Professionals
Technicians and associate professionals
Clerical support workers
Service and sales workers
Skilled agricultural, forestry and fishery
workers
Craft and related trades workers
Plant and machine operators, and
assemblers
Elementary occupations

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Chart Title
1400.00%

1200.00%

1000.00%

800.00%

600.00%

400.00%

200.00%

0.00%
total unemployment women Nevada’s state unemployment ,  % labour force:

The total unemployment in (UNITED STATES OF AMERICA) today is 14.7% which was released
on may 2020. That is the highest number due to closure of shops,industries,cinemas, NEVADA
state of America has the highest hit of unemployment of 28.2% of 3 million population that
means every fourth person in NEVADA is unemployed. NEVADA relies highly on the tourism
which brought 67.7 billion US$ but tourism is not going on so it has a high lost.

Current statistics Pakistan health care, expenditure,

facilities, total number of beds, recovered, deaths

cases 243599

deaths 5058
recovered 149092
critical care per person beds 1681
6,664.0
total beds 0

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Since the lockdown was ended, right after the Muslim festival of Eid we saw the cases rising
rapidly," said Baig. "We saw our first 1,000 cases [in the province] in 50 days, and now we have
seen 1,000 cases in just the last three days.

We need a lockdown, nothing else. People are coming into the hospitals, we don't know who is
infected and who isn't," he said.

On June 7, in a letter to provincial authorities in Pakistan, the WHO warned that if a new
intermittent lockdown was not imposed, the country could see cases rise to more than 800,000
in July before beginning to level off. So this is the whole threat arises people are not taking
serious precautions and doctors are afraid that more cases will arise and death rate would
increase there would be a high rate then Pakistan would come out of such crises.

The beds in Pakistan are very less the study found that more that thousand people are claiming
single bed (population per bed 1063) and (population per doctor is is 963) that shows each
doctor has to treat 963 patients in the urban area on the rural area every doctor has the
responsibility to treat more than 25,000 patients. Out of total beds in Pakistan only 18% beds are
available in Pakistan in the rural areas

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GDP EXPENDITURE ON HEALTH SECTOR

Chart Title
1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2007-2008 0.56%
2008-2009 0.56%
2009-2010 0.53%
2010-2011 0.23%
2011-2012 0.27%
2012-2013 0.56%
2013-2014 0.69%
2014-2015 0.73%
2015-2016 0.77%
2016-2017 0.91%
2017-2018 1.12%

Source: who

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The current situation of America number of bed, hospitals

deaths and recovered:

Chart Title
Total Staffed Beds in All U.S. Hospitals
Number of Federal Government Hospitals
Number of State and Local Government Community Hospitals
Number of U.S. Community 1 Hospitals

Recovered:

Deaths:
corona cases
0 2,000,000 4,000,000

corona cases 3,222,123

Deaths: 135,869

Recovered: 1,426,613

Number of U.S. Community 1 Hospitals 5,198

Number of State and Local Government Community Hospitals 965
Number of Federal Government Hospitals 209
Total Staffed Beds in All U.S. Hospitals 924,107

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Comparative analysis of Pakistan vs. America

X Pakistan America
  243599 3,222,123

deaths 5058 135,869

recovered 149092 1426613

critical care beds 1681 7419
total beds 6,664.00 924107
 

Chart Title
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
0.5 1 1.5 2 2.5 3 3.5 4 4.5

pakistan 243599 america 3,222,123

Pakistan is doing a way good job then the America as the America has the most powerful
healthcare unit their staff and paramedics is known to be the the best of all countries but they
cant manage to stop the spread as shown in the above red line on the other pakistan is way
better the america

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Recommendation:
My own point of view:
In the world of today the disaster doesn’t looks like this

But it in fact it looks like this

Not the missiles but microbes

This days that in some countries the paramedics that have controlled the spread are not ready to
go far and beyond in other nations due to less mobility as the plasma theory of blood but never
tried but in fact that is the case we can build a really good response system like we have all the
benefits of science and technology we got cellphones where we can get information that from
public and get out to other we have the satellites we have an advances in biology that we can
build the vaccines and help them easily spread in the market the previous failure was it was not
a global outreach in the world but today we have all access to it.

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1. We need strong health care systems

2. We need to create a best possible medical corps

3. We need to pair the medical corps to military so that they can go on helicopters and secure
the area

4. Setup the advancement in research and development

http://TED.com with bill gates founder of Microsoft

ECONOMIC point of view: T he motivation for further fiscal expansion is deeply

Rooted in the macroeconomic literature on business cycles. Research indicates that the
impact of a fiscal expansion on the country’s economy tends to be amplified during a
contraction or recession, as opposed to when the economy is growing. [vi]  If Pakistan is in
the mid of a recession, cash transfers and other fiscal measures may have an outsized
positive impact on the macroeconomic

https://www.tabadlab.com/publications/first-response/pakistans-second-covid-19-lockdown-fiscal-and-
monetary-policy-for-when-infections-spike/

Conclusions:

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Although the unemployment is increasing but in USA soon as the pandemic hit in march 2020 more than
50,000 people got the job full and part time which were the newly graduate students of the universities as
in the stock market the shares for drug, antibiotics and different companies like (Searle,) they have a up
going trend of graph there shares are increasing.source(https://www.drugtopics.com//pharviewmacy-
job-demand-could-grow-because-covid-19).

The government has already started a cash transfer of Rs12, 000 per family to 12 million households. An
overall relief programme of Rs1, 200 billion has been implemented by the federal government. The SBP
has announced special subsidized credit programmes for private businesses to sustain their operation and
maintain their workers over the next three months. These initiatives must be implemented successfully
and up scaled if necessary. We all pray for an early recovery.

As the whole point of the study is that there are closure of the business and the production
houses, hotels, restaurants and many education institutions are closed only few of them have
them have access paramedics and general stores on the one side there is no production but there
is also on the other side from the households there is a decrease in some of commodities due to
less demand which means there is “deflation” in the economy which is very dangerous for the
economy.

We need a high level of management in the country as there is unemployment and it can
unemployment can be reduced like the companies in the America(new jursey) have a large
building and there is no concept of social distancing and for this reason if any person is positive
of corona 19 there should be possibility the whole management would be affected so the

solution is “we work” organization its Chinese based company they make offices on the
flexible working hours with the social distancing and make their own offices with the need of the
client for this reason the company could not stop the working due to corona

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Best strategy made by Pakistan is doing ease on lockdown smart lockdown and officials are
checking reports and in some areas of Pakistan if the cases are more they tracking the areas and
closing some of the streets so as to prevent the spread

1. Government of Pakistan has made a package of 100 billion

2. Government has lower the interest rate to 7%
3. Lockdown is a luxury for a rich
4. Lack of infrastructure of hospitals
5. The expenditure on the health sector of GDP has increased to 200 billion rupee that 1.12%
in the year 2018-2019
6. Not the missiles but microbes are the disasters

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