Emergence of the corona virus and its impacts on small scale business;

A case study of Hunza valley.

Farhana

1717151

BS Social Sciences

DR. Aziz Rasool

Contents
1. Introduction.........................................................................................................................................3
1.1. Research Problem........................................................................................................................4
1.2. Research Question.......................................................................................................................4
1.3. Objective.....................................................................................................................................4
1.4. Research Scope............................................................................................................................4
1.5. Limitations...................................................................................................................................4
1.6. Delimitation.................................................................................................................................4
2. Literature Review................................................................................................................................4
3. Research Methodology........................................................................................................................6
3.1. Data Collection............................................................................................................................6
4. References...........................................................................................................................................8
1. Introduction
The novel Corona Virus has emerged in December 2019 in Wuhan city of China. It has
severely affected the economies of the world especially the developing and
underdeveloped countries. The outbreak of Corona virus has affected all the lives of
people over the entire world. Pakistan has also witnessed the negative impacts of Covid-
19 and the cases are drastically mounting day by day. It has not only affected human lives
but also the social and economic lives of the people. Pakistan is also vulnerable due to its
geography, as it shares its border with Iran and China both of the countries has reported
large outbreaks. Due to increase travel between Pakistan and its neighboring countries for
educational, trade, tourism, pilgrimage and remittance movements have further worsen
the situation. Their economies have dropped drastically which results in decreasing GDP
and increase in unemployment. This ultimately is leading to greater poverty, food
insecurity and malnutrition. Micro and Small scale businesses are the back bone of
Pakistani economy they constituted over 90 percent of the estimated 3.2 million business
enterprises and contribute 40 percent of the GDP. They are experiencing significant
impacts of Covid-19. MSEs are more vulnerable than the large enterprises In terms of
financial and managerial, because of insufficient resources. These kinds of enterprises are
dependent on small number of customers and highly dependent on routine transactions.
Due to lock down in the country the Pakistani farms are facing unprecedented effects of
Covid-19. The unavailability of labor, slowdown of production, raw material shortage
and restrictions on transportation are also impacting these businesses.

Hunza a mountainous area which is not away from the impacts of Corona virus
pandemic, this area is already vulnerable to various environmental and climate change
effects and COVID 19 further add high risks to the lives and economy of the place. In
Hunza valley most of the small businesses are run by the local women, which plays
crucial role in their economic development. Now days they are highly exposed to the
pandemic and it restrained their business which leads to many financial problems.
Income of most of the uneducated people is dependent on this kind of business. The aim
of this study is to identify the risks related to the spread of corona virus and its impacts on
micro and small level business and suggest measure to mitigate the spread of the disease
 and also overcome the unprecedented affects on the economy. It will further help the
future business to deal with such kind of issues without compromising their income. This
study will provide baseline information to the policy makers and practitioners about the
problems facing by the small scale business and it will help in the formation of strategies
and policing accordingly.

1.1. Research Problem

The outbreak of Corona virus is the main threat for all types of businesses in the world now days.
Most of the income generation in Hunza is from small scale business but no one help these
businesses to get through these hardships. We are concerned with the different long term
strategies to cope with the problems facing by the small scale enterprises in rural areas.

1.2. Research Question

 What are the impacts of Covid 19 on the income of small and micro scale business of Hunza?
 What will be the long term affects on the small and micro scale enterprises?
 How the various small business get affected by the Covid 19 differently?

1.3. Objective
 To examine the impacts of COVID 19 on small and micro level businesses in Hunza valley.
 To identify the strategies to control further spread of Corona virus.
 To explore the strategies to promote small scale enterprises.

2. Literature Review
Outbreak of Covid was reported in December 2109 in the Wuhan city of China located in central
Hubei province. In the initial time 25 cases of pneumonia was registered and most the affectees
were sellers from fish markets (WHO, 2020a).The corona pandemic has rapidly spread throughout
the globe and the mounting number of cases forced the WHO to consider it a public health
emergency on 30th January 2020 (WHO, 2020b).

The first case of coronavirus in Pakistan was reported on 26 Febuary 2020 In Karachi by Health
department another case was confirmed by Federal ministry of health in the capital city (Ali, 2020). The
numbers of cases were drastically increased within fifteen days which was an alarming situation. Due to
this situation Pakistani government imposed lockdown in the initial time but when millions of
underprivileged people suffered from financial and economic crises the government decided to ease the
lockdown. All of the provinces and other territories get affected socially, economically and financially in
a very terrible way.

Small and micro sized enterprises are the back bone of most of the economies of developing countries.
Pakistan’s economy is also dependent on SMEs especially in rural areas. Hunza is a small village in Gilgit
which is also affected by this pandemic. The economy of Hunza is attacked and many of the small scale
business could not survive for a long time. Due to the lockdown all the economic activities has reduced.
The risk of closure is negatively associated with the growth of the economy. Already the pandemic has
caused the massive dislocation of SMEs and decreased the employment rate.

Shafi et al (2020) The outburst of Corona virus has affected all kinds of business likewise; Pakistan is
facing a lot of issues in different sectors such as Health, education, agriculture, industries, tourism etc.
with the outburst of Covid 19 it is forecasted that the global economy will contracted by 4.9 percent
which is far huge then the global financial recession of 2008-2009. A recent survey showed that the
primary cause of drops in consumption, employment and lower inflationary expectations is due to social
distancing. In Pakistani context, the informal sector which is cash based sector is likely to lose tens of
millions of jobs. Social distancing, self isolation and travel restrictions have reduced workforce across all
economic sectors.

Ali et al (2020) Hunza is significantly affected by Covid19 in various ways. This region is already prone to
different climate change, environmental degradation and disasters. This corona disease has further
worsened the conditions for the whole population but the small and micro level businesses are at higher
risk. According to a study it showed that the routine activities of these people are highly disturbed. The
most alarming situation is that the people are facing food shortage so the government should take a
very serious action to mitigate the impacts. The gap in this study is that they have limited sample size
and they interviewed those who have access to internet and poor class is still left out. Robinson and
Kengatharan (2020) in this research it is identified that the SMEs are more vulnerable to the pandemics
it decreased their income level and sometimes these enterprises are unable to survive. The study
showed that two third of the labor force have low income and are not formally registered. The workers
in the informal employment include poor and illiterate people; they face high risk of contacting corona
disease because of not having proper mitigation strategies which will probably leads to shut their
business. The gap of this research is that they have limited their respondents to a few enterprises and
their results cannot be implied on all of the small and medium enterprises in Sirlanka. Bartik et al (2020)
this study aims to explore four main issues related to the eruption of Coronavirus disease and its
impacts on small and medium scale enterprises. It is found that the closure of small business has already
happened just in few weeks of the crises, second point discussed here is that the number of closures will
increase along with the expected length of the crises, thirdly it is discussed that the small business are
unable to face such situations and are fragile while medium enterprises can survive for a greater
duration, the last point talk about seeking funding for their survival from various organizations. Aftab et
al (2021) the researchers found that the SMEs running in Pakistan are facing unfavorable conditions due
to the Coronavirus outbreak. The transfer of items and goods were limited, increase in unemployment,
reducing demand for goods, barriers in transportation and decrease in production, profit and sales. The
gap in this study is that the number of sample was not extensive and limited to a small number of
people. On the other hand some policies were presented to overcome the higher risk of the crises in
future.

Phillipson et al (2020) the study presented the effects of Covid 19 impacts on the rural economies of UK.
They have taken lessons from the previous crises faced by UK economy and how it had affected their
supply and demand. It has also discussed the rural economies their supply and demand patterns and
what factors affected their growth. The main focus was also on how different genders have been
affected by such crises especially ones who are working on frontlines such as nurses, doctors, teachers
etc. it has become a challenge for women who are running small scale business and performing
household chores to undertake the caring roles. They identified the long term affects of Covid 19 on
rural economies.

3. Research Methodology
This study is based on both qualitative and quantitative techniques of research. Primary data collection
is undertaken. Both methods have their advantages and disadvantages. In order to balance the
weaknesses and illustrate on the strength of both the use of mixed method research has become
increasingly common in recent years (Trochim, 2009). Adopting a mixed method approach helps
understanding complex data and gives a more complete and comprehensive account of the enquiry.
Two main methods questionnaires and interviews will be used.

Researchers always prefer to conduct their case studies on the basis of information-oriented sampling
instead of random sampling. Data collection for my study would be through primary and secondary
sources. For primary data interviews and questionnaires would be conducted while for the secondary
data previous studies will be thoroughly studied.

3.1. Sampling techniques

Convenience sampling techniques will used in this study because it involves drawing samples that are
both easily accessible and willing to participate in a study (Babbie, 2005). The study will be based on
cross sectional data, the views will take once and results are ascertained on data gathered. The collected
data will be analyzed using SPPS.

4. References
Robinson, J., & Kengatharan, N. (2020). Exploring the effect of Covid-19 on small and medium
enterprises: Early evidence from Sri Lanka. Journal of Applied Economics & Business Research, 10(2).

Shafi, M., Liu, J., & Ren, W. (2020). Impact of COVID-19 pandemic on micro, small, and medium-sized
Enterprises operating in Pakistan. Research in Globalization, 2, 100018.
Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of
COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of
Sciences, 117(30), 17656-17666.

Ali, A., Ahmed, M., & Hassan, N. (2020). Socioeconomic impact of COVID‐19 pandemic: Evidence from
rural mountain community in Pakistan. Journal of Public Affairs, e2355.

Aftab, R., Naveed, M., & Hanif, S. (2021). An analysis of Covid-19 implications for SMEs in
Pakistan. Journal of Chinese Economic and Foreign Trade Studies.

Phillipson, J., Gorton, M., Turner, R., Shucksmith, M., Aitken-McDermott, K., Areal, F., ... & Shortall, S.
(2020). The COVID-19 pandemic and its implications for rural economies. Sustainability, 12(10), 3973.