Effect of Lockdown due to Corona in Businesses of all over the

World and Pakistan

Submitted To:

Ma’am Maryam Gull

Submitted By:

Rja Aqeel (32)

Date of Submission:

20st May, 2020

Department of Public Administration

Lahore College for Women University

 Contents

Coronavirus Disease 2019 (COVID-19).........................................................................................3

Effect of Lockdown in Business of Developed Countries...............................................................3

Effect of Lockdown in Business of Developing Countries.............................................................4

Effect of Lockdown in Business of Under Developing Countries..................................................4

Solutions to be implemented in Business........................................................................................6

Suggestions by Experts....................................................................................................................6

Managing the future.........................................................................................................................7

Loss of Business of Entrepreneur and Partnership in Pakistan.......................................................7

Coronavirus Disease 2019 (COVID-19)
An infectious disease caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-
2). The disease was first identified in December 2019 in Wuhan, the capital of China's Hubei
province, and has since spread globally, resulting in the ongoing 2019–20 coronavirus
pandemic. :

Effect of Lockdown in Business of Developed Countries

 The initial outbreak of the coronavirus in China disrupted global supply chains. A record
3.28 million Americans filed for unemployment benefits in the week ending March 21 as
coronavirus-induced layoffs surge around the US. Even when the short-term effects end, the
long-term economic impact will ripple for years.
 More than 99% of all businesses are small businesses, and they employ about half the US
workforce.
 Most small businesses lack the cash reserves to weather a month-long interruption, and
forecasts indicate more than 2 million workers could lose their jobs in just one week as a
result of the coronavirus pandemic.
 There is also the possibility of a "startup depression," wherein new companies don't enter
the job market because of the pandemic.
 Manufacturing and construction have largely held off on layoff decisions, as these industries
could suffer the strain as consumer demand drops
 Despite lower energy prices, weekly (workdays) electricity usage has been declining in most
European countries due to lockdown
 The coronavirus' horrendous impact on Europe's economy is growing clearer as GDP shrinks
3.8%, and Germany, France, and Spain report catastrophic data
 The Arab Tourism Organization, for example, is predicting losses of $40 billion in the
tourism sector.
Effect of Lockdown in Business of Developing Countries
 There is likely to be a sharp drop in domestic consumer demand in most developing
countries.
 Demand for food, medical assistance and other essential items may rise, but this would be
more than offset by lower demand for non-essential goods such as apparel and various
services.
 Demand would also fall due to other factors such as foreign buyers delaying or withdrawing
orders; tourists, both local and foreign, canceling trips; and the declines in the stock market
which erodes peoples’ wealth and their willingness to spend.
 For countries with large numbers of overseas workers such as Philippines, India and
Pakistan, or with large diasporas such as Somalia, remittances would slow down due to
layoffs and delayed salary payments in Europe, the Middle-East and USA where most of
these people live and work.
 Lower overall domestic consumer demand will have a negative impact on production and
employment.
 The On the supply side, there are also likely to be disruptions in developing countries, as
there may be shortages of imported raw materials and spare parts. However, this is likely to
be less of a factor than in developed countries, where long supply chains are now the norm
rather than the exception.   Moreover, lower fuel prices would help the developing countries,
most of who are net importers of energy.      
 In India and parts of Pakistan a lockdown has already been imposed. In such a scenario the
cut in GDP and incomes would be severe. It may even reach the 3-5% projected for many
developing countries do not have Government run social safety nets. .
 Central banks everywhere are trying to push money into the system and cut interest rate.

Effect of Lockdown in Business of Under Developing Countries

 As of 28 April 2020, the World Health Organization reported 16,469 confirmed cases of
Covid-19 and 472 deaths in LDCs, affecting all but six LDCs. Together,
 To limit the spread of the new coronavirus, LDCs have resorted to similar measures to other
countries: imposing states of emergency, prohibiting public gatherings, closing schools and
 universities, banning international and often also domestic travel, and closing non-essential
businesses.
 Covid-19 has caused a demand shock through a massive cancelation of orders as fashion
retail in developed countries collapsed. At the same time, the garment sector is undergoing a
domestic supply shock caused by mandated factory closures.
 Garments exports from Bangladesh declined by more than 80 per cent on a year-to-year
basis
 Reduced demand for migrant workers and travel bans imposed by receiving or sending
countries will drastically reduce remittances, which are essential in many LDCs. The return
of migrant workers who have lost their jobs due to the crisis abroad can put further stress on
limited social protection and health systems.
 Commodity exporters have been hit by reduced demand and resulting price declines. Oil
exporting
 Other commodities have been less affected than oil, prices for most metals and minerals have
declined by 20 per cent, slashing export earnings and potentially reducing (FDI) inflows.
.Effects of Corona Pandemic in Pakistan
 The preliminary estimates show that in case of a 2% decline in imports and nil in exports, the
fourth quarter GDP would be shaved off by 0.3% that will translate into Rs45 billion. If both
exports and imports decline by 10% each, the fourth quarter GDP would take a hit of 2.3% or
Rs345 billion. Similarly, a 20% decline in imports and exports in the fourth quarter would
cause losses of 4.7% of the GDP or Rs700 billion.
 Pakistan announced shutting all of its land borders and limiting international flights.
 The country borders China, where the coronavirus (Covid-19) originated, and Iran which is
one of the worst-hit countries.
 Movement between Pakistan and Iran is now blocked, and travel to or from India and
Afghanistan is very limited in any case.
 The impact on the economy will largely be dictated by government action and any impact on
Pakistan’s export sectors.
 Initial estimates show that in case of limited restrictions, about 1.4 million jobs will be lost,
which are equal to 2.2% 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.
 The government has assessed Rs9.3 billion losses for the aviation sector, Rs250 billion initial
loss in the stock market, Rs30 million losses being 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.
 Impact of trade contraction only on GDP could be up to 4.6% if combined imports and
exports go down by 20%

Solutions to be implemented in Business

1. Find leads and customers ahead of time
2. Adapt your services to the current situation
3. Market your solutions with COVID-19 in mind
4. Ensure your services will still be relevant at later phases
5. Identify the challenges to your business
6. Plan solutions with several scenarios in mind
7. Use alternative solutions to maintain daily operation
8. Implement tech upgrades to keep communication flowing

Suggestions by Experts
 A first crucial role for finance ministries and central banks is in helping provide the best
possible economic evaluation of strict containment measures versus managing the epidemic.
 Second, if large numbers of staff are required to work from home to manage the epidemic,
they have the lead role in doing whatever is necessary to ensure that financial markets .
 Third, they need to ensure adequate funding for the public health response. Steps that can
make an enormous difference to the success of containment strategies.
Managing the future
 The response to the immediate crisis will rightly take priority now, but economic authorities
must also play their part in ensuring the world finally takes decisive steps to prevent a repeat
of Covid-19 in future.
 Finance ministries and central banks therefore need to push hard within government to
ensure sustained long-term funding of research on prevention and strengthening of public
health systems. They also need to ensure that the right lessons are drawn by the private sector
on making international supply chains more robust.
 Critical to the overall success of the economic effort will be effective international
coordination. .However, to be effective, the US, as current president of the G7, will need to
put aside its reservations on multilateral economic cooperation and working with China to
provide strong leadership.

Loss of Business of Entrepreneur and Partnership in Pakistan

 This worldwide pandemic has gravely hit the small business and the growing
entrepreneur.
 The effects on the small-scale services sector are likely to be dramatic.
 It assess that under moderate restrictions employment loss could be up to 12 million, around
20% of the employed labour force.
 In case of a complete shutdown, the government has assessed that 18.53 million people or
30% of the labor force will be unemployed. These people will sustain Rs783 billion losses.
 In this scenario, two-thirds of workforce is daily wagers, 30% is working on the piece rate
and the rest are street vendors.
 Business loss amount at over Rs450 billion for the fourth quarter. This has led to cancellation
of many partnership deeds and closure of small businesses.
Remedies:
 Interventions may help improve the resilience of the economy in accommodating moderate
‘social distancing’ measures; for example, by providing assistance to small firms to help
them gear up for home working.