ECONOMY OF PAKISTAN (COVID’19)

Introduction:
In January 2020, PM Imran Khan addressed that this year would be a growth year for the county. In feb,
Pakistan was closely introduced to the corona virus through travelling, which has affected society, private
sectors, education, daily wage earners, closure of business, GDP(said Asian development Bank), most
important import/export business, in a result the economy of Pakistan is facing a loss as already burden
by heavy debt and will continue till the pandemic ends, the situation can be worsen as the PM addressed
on national TV and appealed for debt relief as the country has a population of 220 million approx. and
could barely afford is $8bn. Approval of G20 and further precautionary measures are being taken for any
uncertainty on the economy.

Summary and Theoretical Relevance:

Pakistan qualified for debt relief G20. It is a sign of relief but it’s not enough for the country. The
country was already dealing with the existing debts which is now completely off the track because of the
pandemic situation. The country needs relief for a longer period to deal with the global cause which is
leading towards downfall of economic condition as the ADB estimated that Pakistan’s economy tolerates
the loss of up to 1.5pc in its GDP growth rate, Pakistan’s traditional exports (such as garments) demand
will also be affected, fall in the value of oil related stocks interprets the deprive of OGDC plans will be
delayed and the private programs will need to be on shelf as the global buyers are not in positivity to
extend their stakes while the riskiness persists.

An IMF report shows that Pakistan has $12.731bn of external debt repayment commitment. It seems like
new loans are being taken continuously to pay back old loans, which is obviously not in favor, it won’t
give fruitful results as we are going through the same situation, there is no difference seen. Tens of
thousands of human lives are living under poverty, according to the IMF: Pakistan reported debt servicing
is $28bn in the next three years excluding deposits by friendly countries. Approximately one-third is
Chinese, UAE, Saudi Arabia and similarly, one-third of loan servicing is due to IMF, WB and ADB. The
point is that these sectors will also follow the same line of G20.

● Conflict perspective: For a conflict perspective theorist, the economy is not a source of stability
for society as it reflects and reproduces economic inequality in a capitalist marketplace. This
perspective is Marxist with the bourgeoisie “the ruling class” accumulating wealth and control by
misusing and may be persecuting the working class proletariat and controlling those who cannot
work (the aged, the uneducated) into the incredible mass of unemployed.
● Conflict theory highlights the control of the economy by the economic elite. During the current
situation of the country, people who are the elites (government, upper class, wealthiest people)
they all have enough sources to rule, they have the power to sit back and eat for a long term, they
are taking decisions but what about the lower class? they are starving, the people who are on
daily wages, the lower class that work just for the basic needs and salary based employees, they
 all are suffering right now because of the decisions taken (lockdown) which is the inequality of
economic situation, that's leaving behind the lower class helpless.

The cycle of G20 is from the multilaterals. The point is IMF is giving $1.4bn to Pakistan around
$800million each is to come from ADB and WB in a couple of weeks. These will be sufficient to cover
the dissipation of hot cash. Presently the money is likely to gradually come back to its balance esteem of
155-160, moreover the current account is to be seen in excess whereas Pakistan is in lockdown. Both
sends out (due to lockdown of buyers) and imports (due to lockdown in Pakistan) will drop significantly,
there is a window of relaxation for Pakistan. The Government is making strategy and taking all the
actions to fight with the virus and its negative impacts on the country’s economy. The PM held extensive
consultations with the economic team and said guaranteeing continuous financial exercises and job
security were the highest needs of the government.

● Convergence theory explains that as a country’s economy develops, its societal organization
changes to end up more like that of an industrialized society. Here, Pakistan rapidly working for
its economy since 2019 till now, is the relevance showing with convergence theory.

Conclusion:
Pakistan’s primary half of the financial year had been so solid that expansion was anticipated to decrease
as the stun caused by sudden depreciation had subsided. It is unfortunate that no government till date has
received an arrangement which may give relaxation to the masses and society, their arrangements are
continuously implied and supply more extravagances to the elite class of this nation but PM’s statements
seem promising towards the lower class recently. The IMF mission has concluded that Pakistan had been
effective in completing the “structural benchmarks” as well as in meeting “all end-december performance
criteria” which had been set for the usage of a $6 billion extended fund facility programmes. Still, a part
depends on how the fiscal numbers turn out and how steady the reserve accumulation that has taken place
in this way remains. The economy was confronting a slowdown but trusting the enhancement would be
seen in upcoming days as claimed approaches are running within the right direction in the relevance of
converging theory, the coming economic years will be seen promising just after the covid ends.

Recommendation:
● Pakistan should pay attention to create its new businesses, industries and advance/promote its
rural items in the worldwide market.
● All stakeholders must give their inputs and work together to produce the best results for the
nation.
● The youth projection ought to be addressed, as the unemployment among the youth is rising.
● Encouraging the female workforce, as is much more compliant and restrained.
● Improve health sectors and education.
● Implementations of new technology is an important variable of economic growth.

Articles:
https://www.dawn.com/news/1549599/pakistan-included-in-g20-debt-relief-plan
https://www.dawn.com/news/1534459

https://www.brecorder.com/2020/04/17/589976/g20-loan-relief-much-needed/.