SOCIOLOGY HM 321

Chaudhry saad ullah (2018095)

SECTION B
2018095
CHAUDHRY SAAD ULLAH
"Analyze the current economic crisis in Pakistan in view of functionalist
perspective"

Functionalist perspective is one of the sociological perspectives that help us

better understand the working of an economy. According to this perspective
both work and economy have certain functions in a society that help in running
it smoothly and increasing the fulfillment for everyone. Work provides various
opportunities for people to earn their livelihoods and establish the kind of
lifestyle they want; while the economy is what gives any society its shape. It
enables the availability of various resources crucial to the society.

In view of this perspective at the start of 2020 Prime Minister Imran Khan
issued various press releases and statements declaring that the year would be
filled with economic progress and that the economy was on its way towards
stabilizing. According to his ministry’s statements the CAD had decreased by
73% and the fiscal deficit was around 1.6% of the GDP. Though after close
observations it was revealed that the 73% decrease in CAD was because the
value of the Pakistani Rupee had declined sharply and there had been a lot of
import compressions. These things have their own implications for the society
and negatively impact the growth of an economy.

Alongside this the extremely high taxes on import items and the high interest
rates have slowed down the production at the industrial level. The
manufacturing of cigarettes decreased by almost 36%, that of cars dropped by
around 43%, petroleum products by 14%, and steel products by 30%. This was
the case with many other industries too. As textile is one of the main industries
of Pakistan a decline in the production of cotton hugely impacted the economy.
As instead of being produced locally cotton would have to be imported to fulfil
the needs. This can be a major issue.
Because of the Covid-19 situation the whole world was facing a global
recession there were major economic downturns. Many businesses went
completely out of service reducing the employment opportunities for people and
taking away the livelihoods of many. Work being one of the primary functions
of the functionalist theory affected the society a lot. The GDP growth reduced to
3%. Current account balance and trade balance both went negative. Inflation
rate went higher than 12%. Fiscal balance that was already negative increased
even more.

The pandemic further highlighted the many loopholes in our healthcare system.
Majority of the already less in number ventilators weren’t even working. Bulk
buying working new equipment incurred additional costs. Almost 50 billion
PKR was kept for this purpose. If the healthcare equipment had already been up
to the mark Pakistan would have been able to save many additional costs.

During the lockdown the supply chains were totally disrupted there was a huge
gap between the supply and demand in the market. Due to many areas being
blocked and many companies going out of business the transport and logistics
services were either slowed down or completely disrupted in certain areas. The
inter provincial and international cargo was often blocked for weeks and months
on end. The market deficit further increased the prices of many commodities.
Inflation rates went quite high again.

All in all the government is trying to do what it can to take the economy back
on track. The healthcare sector got a huge budget allocated. A lot of support is
being given to small businesses in the form of financial subsidies and tax breaks
etc. The state bank introduced various packages to leverage the manufacturing
industry like giving them loans at really low rates to allow for them to get back
on track. The packages that it introduced will increase the investments. The
government is working on many other similar vulnerabilities exposed.