The government has done the right thing by introducing a relief package and reducing fuel prices so people know and understand that they have a financial cushion going into the lockdown. The state bank, too, reduced interest rates twice to make money more easily available for businesses as they readjust to ride out the pandemic.
Let’s not forget that Pakistan is not alone in facing such a difficult situation where the entire economy is slowing down considerably and putting the incomes of millions at risk. And, just like much of the world, Pakistani authorities have also made sure that credit markets are solvent even as they continue crashing and there is enough of a relief package to keep the economy running for now.
That said, it must also be appreciated that there’s only so much the government alone can do in the given circumstances. The economy was already pretty badly hurting well before the coronavirus crisis. And if it hadn’t been for the $6 billion IMF program, we could well be negotiating conditions of default with some of our many lenders by now. Yet such is the magnitude of this crisis that losses expected to the local economy are being calculated around $10 billion – with the figure sure to bloat further with time – which is much greater than the entire bailout program.
The government’s initiative will only work properly if the civil society joins in. Already there are encouraging reports of volunteers providing food and essential items to poor families, which will go a long way in meeting this crisis. Of course all people lending a helping hand should coordinate very closely with relevant authorities to make sure all safety standards are adhered to.
This moment of trial calls for the perfect example public-private partnership. If the government provides the leadership and people do as they are told and provide support expected of them, this crisis will not get out of control here as it has in other countries. The government does not have endless resources, of course, so it will be imperative that the virus doesn’t spread any further.
That will reduce the burden on the centre when time comes for further relief packages, and more healthy people will be around to help the more vulnerable sections of our society. So far, with people isolated and some relief for the common, things are moving in the right direction.