A new world. How and when will the Corona virus pandemic end in Pakistan is an open question. It may end with hundreds of deaths and thousands of infections. Or the crisis may end with vast devastations of families, institutions and businesses. We do not know what it will be.
Yet, one way or the other, the pandemic will end as did the past plagues, famines or wars. Apart from the pandemic, like the rest of the world, Pakistan is also facing an unprecedented economic downturn. These challenges will have to be dealt in a changed world, where the old ways are unlikely to be viable.
The world has changed in just three months. All the countries, the US, UK, the Middle Eastern oil kingdoms and Europe, on whose aid and loans Pakistan has historically relied upon are in severe economic recessions themselves. The US, the UK and Europe have soaring unemployment (39 million newly laid-off in the US) and have resorted to the deficit finance of trillions and billions of dollars, just to sustain their economies and workers.
For years, they will be looking after their own needs and paying for debt.
Oil prices have plummeted, and the Middle eastern oil wealth is eroding. The expat Pakistani labour is being shipped back.
China is Pakistan’s new saviour, but it also has both the virus and the economic downturn.
Furthermore, its export-propelled-economy is confronting nationalistic hostility of the western world, particularly of the US.
Pakistan’s historical asset of its strategic geographic location that it cashed for foreign aid will not serve it anymore, as its patrons have their own houses to look after
It may help Pakistan but will not have the largess that we have been counting on. All in all, Pakistan’s historical asset of its strategic geographic location that it cashed for foreign aid will not serve it anymore, as its patrons have their own houses to look after. Pakistan will have to reimagine its national goals.
The realistic option for Pakistan is to squeeze maximum benefit out of its internal resources, primarily by increasing efficiency, which is not only a matter of economic policy but also a question of reorganising social and moral life. The point of changing social and moral system is central to both the fight against the virus and reforming the economy. Inculcating values of mutual trust, equal rights and common welfare is a prerequisite for social action. Presently, my focus is on the economic crisis.
Import substitution as a strategy
The economic crisis requires Pakistan to turn inwards. It has no choice but to follow a strategy of import substitution for the production of essential goods and services. Almost overnight, the US and the European countries have begun producing their own masks, medical protection equipment, ventilators and medicines to reduce dependence on global supply chains and outsourcing of production. The limits of unqualified free trade have been laid bare by the pandemic.
Pakistan should also give priority to making goods and services of daily use and high value such as organic food, solar panels, wind turbines, medicines, electric motor bikes, composting toilets, low-cost homes.
The government should not only give incentives but also lead by linking national science and technology institutions and universities with corporations, farmers, small industries and businesses and even hawkers to provide technical guidance and improve their production. It has to adopt a strategy of reasonable self-sufficiency, which can then be the base for the global trade.
Basic needs approach to development.
A common formula for countering economic recessions is to invest in infrastructure, public goods and people’s welfare. Pakistan has little room to borrow heavily to invest in these sectors. It is already greatly indebted (both external and internal debts of about 34 trillion rupees). Its financial resources are limited but the administrative and social capital could substitute for the shortfall. Shunning the glamour of mega-projects that burden the country with foreign debt is essential. Hold back for now from building motorways, big dams and ‘world-class’ suburbs.
The basic needs strategy means changing the priorities of development, tilting them towards community sanitation, affordable housing, low cost transport, health care for the poor and increasing efficiency of small businesses. Examples of projects could include universal garbage disposal and drainage, flood control, forestation, policies to promote affordable housing, building sidewalks and bicycle lanes to improve mass mobility (instead of investing billions in freeways for cars), commercialising composting toilets (Gates foundation for one has developed a universal prototype) for homes, simplifying land laws and records, streamlining rental housing markets, seeding new industries, etc. They may not require large financial resources but extensive legal, administrative and technological investments. This strategy will also be labour intensive, producing jobs and thereby spreading prosperity.
Conservation as a source of resources and environmental preservation
Conserving existing resources and maximising their outcomes is also a way of creating resources. By reducing wasteful use of natural, financial and human resources, Pakistan can prosper. Water use is an example of how conservation can generate new resources. Pakistan only has 1017 cubic meters of water per capita now but is heading to absolute scarcity by 2025. If water was to be conserved by changing the culture of its use, adopting practices such as not soaking the farmland, controlling leakages, water treatment and reuse, reducing evaporation by piping the distributary channels, the available water will increase.
Briefly, other examples include controlling air pollution that will pay in the savings from reduced health burdens. Both governmental and private organisations have a very large slack in the form of low productivity arising from antiquated, corruption-prone procedures and rules. Extensive procedural, regulatory and cultural reforms in these organisation can liberate many resources—again, a task steeped in social and moral change.
In conclusion, the world has changed.
Pakistan has to choose a new path for national development and the control of the pandemic.
Given the international situation, an inward-looking strategy is needed for transformative changes in the development goals and strategies as well as restructuring of the socio-cultural and institutional systems. It can be done. Will it be done? l am not sure because we have no history of diverging from international development fads and the path of dependency. Yet, a promising alternative is possible.
The writer is a professor emeritus at Queen’s University, Canada, and the author of the book, “Pakistan-social and cultural transformations in a Muslim nation.”