PAKISTAN

A job-killing pandemic

Afshan Subohi

Updated 07 Dec 2020

DAWN.COM


While horrors of the rising number of Covid-19 cases and sudden painful deaths in isolation wards instil fear into the bravest of hearts, the pandemic-induced economic insecurity is now pushing families to the edge in Pakistan.

Like elsewhere, the protection and creation of jobs is perhaps the second biggest challenge after the health crisis in Pakistan. The neglect of this issue in the current environment may prove to be suicidal as dismissing the coronavirus as a sham.

Learning from the lessons of the first wave, Prime Minister Imran Khan’s government has decided in principle not to impose a complete lockdown during the current rising wave and instead identify Covid-19 hotspots for a smart lockdown. The premier pronounced categorically that factories and businesses must follow standard operating procedures (SOPs) to keep the wheels of the economy turning for shielding both lives and livelihoods.

During the first lockdown in April that stretched for three months, businesses were offered incentives via cheap loans to cover wage bills and retain workers. Beyond that the government at all tiers seems to have done little in the way of keeping itself abreast of the labour market situation for apt policy interventions.

PIDE projects job losses of up to 18.5m depending on the intensity of Covid-19 and the government’s containment strategy

In the absence of credible data on employment, the Pakistan Institute of Development Economics (PIDE), for a change, made a commendable effort to project Covid-19–triggered unemployment. In a series of Covid-19 bulletins using modern research techniques on occupational employment counts based on data from the Labour Force Survey 2017-18, PIDE dissected and deduced valuable trends. It tried to capture the transformation in the labour market during the pandemic, identified vulnerable sectors, projected probable job losses at different levels of the health crisis intensity and extrapolated findings to share province-wise expected job cuts besides other dynamics.

In an earlier bulletin, PIDE projected Covid-19–triggered job losses of up to 18.5 million depending on the intensity and the containment strategy. The latest addition of the PIDE bulletin projected higher job losses in Punjab and Khyber Pakhtunkhwa than Sindh and Balochistan.

The exercise provided valuable insight into the changing labour market dynamics. The government hierarchy, including labour secretaries and ministers, were too busy to dwell on the findings of PIDE research or use it for better informed interventions.

Talking to Dawn from the United States by phone, PIDE Vice Chancellor Dr Nadeem ul Haque expressed frustration over the lack of seriousness in society and the government towards vital issues. He blamed the under-utilisation and misallocation of precious human resources for the under-performance of the economy. “We are lazy and delusional. We wish to succeed without working systematically towards this end. The flawed system of nepotism is deep-seated and often efforts and resources are misdirected. The low productivity rates in the country are not accidental. Unless we get serious, the future will continue to elude this country,” he said.

He believes that charity by individuals, businesses or the government can at best provide a temporary relief to the poor. Only the gainful employment can break the poverty trap for employable teeming millions in Pakistan.

Attempts to obtain formal comments from provincial labour ministers and secretaries did not succeed. Insiders in Sindh and Punjab privately told Dawn that the relevant political leaders and officers are innocently ignorant of the work been done by PIDE or others in this regard. A senior in the Sindh government pointed out that the Planning Commission is not releasing the Labour Force Survey 2018-19 as numbers suggesting rising unemployment were found to be politically embarrassing.

The office of Minister for Planning and Development Asad Umar promised a response to Dawn queries but it did not arrive till the filing of this report.

“It is painful to watch a party that assumed power on the platform of rooting out corruption, vacating the elite siege of the state and creating 10 million jobs in his tenure is commanding retrenchments from state-owned enterprises and watching helplessly as cartels play the market.

“The government doled out precious billions to woo the private sector without binding them to reward workers fairly and generate new jobs and more tax revenue. Historically, easy money from the government lands in speculative trading in the capital and property markets for quick returns with zilch job or revenue gains,” commented a market watcher, hinting at General Musharraf’s era when barons, bankers and brokers colluded to multiply their wealth several folds at the cost of the industry and agriculture.

As the economy stagnated and the GDP growth rate plummeted from over 5 per cent in 2017-18 to 1.5pc in 2018-19 to negative 0.4pc in 2019-20, former finance minister Dr Hafiz Pasha raised a red flag about job losses on multiple occasions. Even before the pandemic struck, he projected the impact of economic deceleration on the working masses. He estimated 2.2m job losses over the next two years after 1m were rendered unemployed in the preceding year.

According to the sixth edition of the International Labour Organisation monitor titled Covid-19 and World of Work, “… as widespread and severe labour market disruptions have continued, the global working-hour losses are projected 8.6pc instead of 4.9pc projected earlier in the fourth quarter of 2020 compared to the same period last year, which corresponds to 245m full-time equivalent jobs”.

Published in Dawn, The Business and Finance Weekly, December 7th, 2020