Daily Times

There needs to be increased venture capital funding to accelerate growth of technology-based startups that can absorb this talent to become part of the formal economy, and scale to enterprise level in short time scales. The government is finally taking this sector seriously and implementing its Digital Pakistan Policy to accelerate and transform the IT sector. It is expected that the combination of organic growth and the boost from government’s initiatives will help the sector take off with steeper growth trajectory.

Pakistan has signed up for the United Nation’s COVAX Facility, a global initiative aimed at equitable access to safe and effective COVID-19 vaccines worldwide. The government has approved procurement of vaccines, and vaccination is expected to start by March 2021. As this is successfully rolled out across the country for the vulnerable members of society the worst fears from the pandemic will be gradually allayed and the country will fully move towards complete normality.

However, the persistent threat of ever-mutating viruses has been highlighted by new variants of COVID-19 in the UK. A universal coronavirus vaccine needs to be developed to avoid a repetition of what the world has had to undergo in 2020. It is hoped that the World Health Organization assembles a consortium of the willing and gives impetus to research-and-development efforts to create a universal vaccine. The world needs it more than anything else at this point and global collaborative efforts are in evidence already.

Tourism could not only provide large numbers of jobs and valuable foreign exchange it will also shape the soft image of Pakistan, which has spin off benefits in terms of trade linkages and foreign direct investment.  Pakistan is endowed with natural beauty, historical sites, religious pilgrimage, offering a rich tapestry for sight-seeing as well as experiences not possible anywhere else in the world.  With British Airways and Virgin Atlantic starting direct flights to the country, and other airlines expected to follow, Pakistan is increasingly being seen as a destination for adventurous tourists. It is highly affordable and the current government is full committed to building infrastructure and capacity to offer winning experiences. The only threat is continued impact of COVID-19 in the world which may hamper international travel.

Despite widespread pandemic fatigue likely extending into 2021, the patchy distribution of vaccines in developing countries and the threat from new variants is likely to mean that international travel restrictions could continue well into 2021

The combined opposition under the banner of PDM is trying its utmost to destabilize Prime Minister Imran Khan’s government claiming that the 2018 election was stolen from them and that the PTI led government is illegitimate. The trump card of submitting en masse resignations from the national and provincial assemblies is likely to cause some inconvenience for the ruling party, but falls short of a constitutional crisis and does not provide any justification for preventing senate elections from being held. It provides even less justification to force the government to resign. Talk of a third force intervening appears to be no more than wishful thinking on the part of the opposition.

Although unlikely, such a black swan coming to pass would have severely disruptive implications for the incipient economic recovery. Political instability in an already Covid-19 pummeled society would not only have economic consequences but also adversely impact an already fragile security situation. All bets at that point would have to be off.

The United Nations (UN) has warned the World faces worst food crisis for at least 50 years ( https://www.theguardian.com/society/2020/jun/09/world-faces-worst-food-crisis-50-years-un-coronavirus ). The pandemic has disrupted global food supply chains. Countries have already been stockpiling wheat and other food staples, and consequently food inflation is exacerbating the misery of the poor already challenged by hardships imposed by the lockdown. Even in advanced economies, the poor are suffering from higher food prices at a time of high unemployment. The Pakistani government has been stocking up on grain supplies and other food commodities. Better planning must also be in place by provincial govts of Punjab and Sindh for wheat procurement in April when the next harvest is ready.

The International Monetary Fund (IMF) expects “a long and difficult ascent” from the COVID-19-induced recession in its biannual World Economic Outlook (WEO) report

( http://sdg.iisd.org/news/imf-anticipates-difficult-economic-recovery-from-pandemic-unctad-data-reveal-scale-of-downturn/ ).  The situation could become worse for the West if there’s inadequate fiscal stimulus.

This could be further exacerbated by another global financial crisis in  developing economies who will struggle to meet repayment schedules of $7trillion debt due by end of 2021 ( https://www.reuters.com/article/us-global-debt/global-debt-to-hit-record-277-trillion-by-year-end-on-pandemic-spending-splurge-iif-idUKKBN27Y239 ). Zambia is the sixth nation to default in 2020. The Group of 20 (G20) has created a “Common Framework” (including China) to manage debt relief, but US congressional reluctance to approve any new resources for the IMF could undermine G20 efforts.

The darkening prospects over global economy could have adverse repercussions for Pakistan’s exports. Although the country has experienced a much faster recovery in its international orders for its textile products than regional competitors after falling sharply earlier in the year, this could be stymied if household spending in developed countries is curtailed.

Amidst the rollout of the vaccine in developed countries, the Covid-19 virus continues to spread and mutate. There is concern that the recently developed vaccines may not be effective against new emerging variants.  Despite widespread pandemic fatigue likely extending into 2021, the patchy distribution of vaccines in developing countries and the threat from new variants is likely to mean that international travel restrictions could continue well into 2021

Should Israel’s suspected assassination of Iran’s head of nuclear program result in the Supreme Leader Ayatollah Khamenei following through on his vow to retaliate—against Israel, the United Arab Emirates, or Saudi Arabian oil facilities, it could spark regional confrontations whose possible outcomes are impossible to predict. However, what is almost certain is such an escalatory cycle between Washington’s allies and Tehran would spike global oil prices. An already fragile global and Pakistan economic recovery would be severely jeopardized.  That scenario however is far from certain and there is hope sanity will prevail.

Javed Hassan has worked in senior executive positions both in the profit and non-profit sector in Pakistan and internationally. He’s an investment banker by training.

Twitter: @javedhassan