Buckling under pressure

Originally published in The News on Sunday, May 17, 2020

Prime Minister Imran Khan has announced a gradual lifting of the countrywide lockdown from the coming week. The announcement followed a high-level meeting in Islamabad on May 7 to review the impact of Covid-19 on the country’s already weak economy. The PM’s emphasis was mainly on providing benefits to small traders and daily wage workers suffering economic losses due to the preventive lockdown.

Since then, the provincial governments have allowed a conditional easing of the lockdown, asking traders to follow the standard operating procedures (SOPs) formulated by the authorities. The SOPs include wearing of masks, using hand sanitisers and keeping a safe distance to avoid the spread of the virus.

In Sindh and the Punjab, the businesses and shopping centres are now to open for general public from 9am to 5pm, four days a week. On Fridays, Saturdays and Sundays the businesses are to remain closed and the lockdown in place. The governments have warned that in case of violation of the SOPs, the relaxation may be reversed.

This seemingly abrupt decision to open markets amid growing cases of Covid-19 has worried medical practitioners, who have been demanding continuation of the lockdown for another couple of weeks.

On Wednesday (third day of lockdown relaxation), the government-released data of Covid-19 cases indicated the single largest daily jump in confirmed coronavirus cases with 2,255 new cases bringing the total number of infected people to 34,231 with a total of over 700 deaths.

Massive crowds and open flouting of the SOPs was witnessed at congested shopping centres in downtown Saddar area in Karachi. On Wednesday afternoon, the District South administration had to seal Zainab Market, the famous shopping centre known for selling garments, and Gul Plaza on MA Jinnah Road, where imported textiles and other items are sold.

In Lahore, the provincial government warned shopkeepers to follow the SOPs failing which easing of restrictions would be withdrawn.

On the first day of the relaxation (Monday), people were seen with children riding on bikes in Karachi while others were sitting very close to one another in rickshaws without any precaution, says Dr Sher Shah Sayed of the Pakistan Medical Association, Sindh.

A group of concerned citizens including professional doctors, civil society and women rights activists held a press conference at the Karachi Press Club on Tuesday and demanded that the government re-impose the lockdown. Earlier, doctors’ bodies in all four provinces had warned the government not to ease the lockdown as the virus spread had reached an alarming level in Pakistan. Even though the death rate is still low in Pakistan, the healthcare services in Pakistan are already scant and testing facilities are limited to major cities.

The government had been under immense pressure from various quarters, including the powerful business community, to ease the lockdown as shopping activity ahead of Eid ul Fitr would be affected. The gradual lifting of lockdown was an attempt to release that pressure. However, this poses grave risks to public health.

Workers have faced a big squeeze in their earnings as many industries have started letting go of their workers, most of whom were employed on short-notice contracts. These unemployed workers are desperately looking forward to the opening of industries. Some industries, especially factories producing export textiles, have started their operations.

In the last week of March, the federal government had announced an emergency relief cash grant to lockdown-affected poor in the country. The scheme under the PTI-government’s flagship Ehsaas programme provided an amount of Rs 12,000 to each registered citizen divided over three months. According to the Ehsaas programme website, the government has distributed an amount of Rs 91.611 billion among 7.512 million beneficiaries so far. An overwhelming majority of workers has thus remained deprived because they were unable to fulfill the stringent conditions attached to qualifying for the scheme.

According to the latest Labour Force Survey (2017-18), the total workforce of the country is more than 65.5 million. The beneficiaries of this special scheme are therefore only 11.5 per cent of the total workforce. The prime minister had earlier admitted that the data of informal or daily wage workers was not available which is why his government was not able to reach the entire workforce.

Workers’ bodies have demanded unemployment allowance under the universalisation of social security. Currently, 58 million workers out of 65.5 million are registered with the government’s social security institutions, including Employees Old-Age Benefits Institution (EOBI), according to data compiled by an Islamabad-based research institute, the Centre for Labour Research.

Economic experts believe that the pandemic has hit Pakistan’s economy hard. The IMF has already predicted that the overall GDP growth rate by the end of the current fiscal year would be 1.5 per cent as against State Bank’s projection of around 3 per cent. However, some economists say the coronavirus pandemic has also provided a cushion to provide a substantial relief to the people.

Dr Shahid Hassan Siddiqui, chairman of the Research Institute for Islamic Banking and Finance, says that because of reduction in oil prices and stabilisation of currency rate, the balance of trade and current account deficit have eased out. The IMF and Asian Development Bank have provided Covid-19 economic package and it is expected that inflation would be further reduced and imports would come down during the coming months.

He says that to provide relief to the poor the government may print currency notes worth Rs 300 billion and distribute it among the poor. This should be in addition to the amount the government is distributing under the Ehsaas programme. Dr Siddiqui says that such distribution would generate economic activity and the overall economy may revive by September this year. 

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The writer is a senior journalist currently working as a development communication professional in Karachi

4th time cut in policy rate @8%

For the 4th time in a row the State Bank of Pakistan (SBP) on Friday announced another cut of 100 basis points (bps) in the Policy Rate by fixing it at 8%, a press release said.

The SBP has reduced the policy rate by a cumulative 525 bps since 17 March 2020.

According to the central bank, the Monetary Policy Committee (MPC) at its meeting on 15th May 2020 made the latest adjustment in the Policy Rate. This decision reflected the MPC’s view that the inflation outlook has
improved further in light of the recent cut in domestic fuel prices.

As a result, inflation could fall closer to its lower end of the previously announced ranges of 11-12 per cent this fiscal year and 7-9 per cent next fiscal year, the press release added.

It was a long-standing demand of the traders to reduce the interest rate to facilitate their borrowings from banks. The traders have been demanding to reduce the Policy Rate to 2-3 per cent.

To facilitate the businessmen from the economic shocks of the Coronavirus (COVID-19) related lockdown in Pakistan the central bank has already announced a special scheme to provide soft loans to the private sector so that they can retain and pay salaries to their employees during the lockdown closure of the offices. On April 10, 2020, the SBP announced an incentive scheme entitled Refinance Scheme for Payment of Wages and Salaries to the Workers and Employees of Business Concerns.

The SBP enhanced its refinance limits to finance up to 100% of wages and salaries of businesses with an average 3- month wage bill of up to Rs 500 million. This can be used for the onward payment of wages and salaries in April, May and June 2020. Earlier, 100% financing was available up to a wage bill of Rs 200 million only. Similarly, for businesses with a 3-month wage bill exceeding Rs 500 million, State Bank will now finance of up to 75% with maximum financing of Rs 1 billion. Earlier, 75% financing was available up to a maximum of Rs 375 million and 50% up to a maximum of Rs 500 million.

The profits on bank deposits, term deposits and fixed deposit schemes would further be reduced as the commercial banks including National Saving Centre have already reduced their rates to a minimal level and pensioners and widows who have been investing in various schemes to earn regular income would receive less amount. Currently, term deposit profits range from 7 to 7.5 percent when the discount rate was 9 per cent. These banks will certainly reduce it further to bring to the level of 6 yo 6.5 percent.

Locust attack: Pakistan may face food shortage this year

Last year swarms of locusts had attacked many parts of Sindh and other parts of the country by the end of May and destroyed about 15% of the standing crops. The locust initially came from Iran and other Gulf Arabian countries via Balochistan. They spread over upper Sindh’s districts and also in some areas of Southern Punjab. The areas right from the Nara Desert in Khairpur district in Sindh to the Cholistan Desert in Rahimyar Khan, the Punjab province attacked crops. In Sindh districts like Sanghar, Umerkot, and Tharparkar were also hit hard by locust swarms.

Sindh government raised hue and cry and sought support from the federal government in a vain.

Finally, the federal government had to declare a “national emergency” on January 31, 2020, to eliminate the attacking swarms of the desert locust, which have destroyed crops on a larger scale. The federal government had also approved a National Action Plan (NAP) with an estimated allocation of PKR 7.3 billion to overcome the crisis.

But this year the swarms have come to Sindh quite early (in April) with severe intensity and according to reports the locusts may completely destroy the cotton crop in the affected districts, as the crop was in its initial stage. It seems if the swarms are destroyed the farmers have to sow the crop late again to save their production, experts say.

This year, the locust attack is so severe and widespread that the farmers fear the country may face a famine line situation.

So far 35% of the total area affected by locust attack is in Sindh, said the provincial minister for Agriculture Ismail Rahu at a press briefing on May 5, 2020. “This is an emergency situation that needs immediate attention,” he said.

The photo was taken from the wall of Meghwal Malji

According to the United Nation’s agency Food and Agriculture Organisation (FAO) at a 25% damage level, the total potential losses are estimated to be about PKR 353 billion (USD 2.2 billion) for the Rabi crops, and about PKR 464 billion (USD 2.9 billion) for Kharif crops.

The Sindh government has been complaining to the federal government for not cooperating in combating the locusts’ attacks. Sindh government needed aircraft from the federal government for pesticide sprays, but Minister Rahu complained that the federal government was not providing aircraft despite the fact the provincial government had agreed to provide fuel for those machines.

Instead, the central government provided aircraft to the Punjab government for spraying on locust swarms. Last year even a special aircraft used for spraying the vast areas in Southern Punjab was crushed and two persons, the pilot, and aircraft engineer were killed.

This is an alarming situation for a country like Pakistan, which is quite self-sufficient in food production, but in the midst of the additional impacts of COVID-19 (Novel Coronavirus Pandemic) the health, livelihoods, food security and nutrition are under threats, which may impact the most vulnerable communities and populations of Pakistan. An FAO report has suggested that it is imperative to contain and successfully control the desert locust infestation.  

The FAO claimed that in 2019, the Pakistan government’s Department of Plant Protection (DPP), and Ministry of National Food Security and Research (MFSR) surveyed an area of 932,580 hectares and treated 300,595 hectares in three provinces, consuming 150,839 litres of pesticides. Of the hectares treated, 20,300 hectares were cleared by aerial spraying.

But this massive operation to kill the locusts seemed to be futile as this year’s attack is so massive in upper Sindh and Southern Punjab that it is feared that most of the cotton crop would be damaged.

Eating locusts

Last year social media was amused with the reports and video clips of people making Biryanis of Locusts in various parts of Sindh.  According to a news report in Thar’s Chhachharo area, restaurants were selling biryanis and curry dishes made from locusts.

Even in a lighter mode, Sindh Agriculture Minister Ismail Rahu suggested a “bizarre solution” to fight locust manifestation by asking the people to cook the insects and enjoy delicious dishes made with locusts.

In Arab countries, people are still fond of eating fried locusts which they serve with rice but the insect dishes in this part of the Sub-Continent are mostly not popular. Even in Sindh people have stopped eating them.

Even some people started asking questions from religious scholars whether eating locusts are Halal or Haram. According to a scholar, locusts are Halal and can be eaten if people wish.

Pakistan's predicament

Karachi, January 3, 2017

After US President Donald Trump's tweet on the first day of New Year 2018, the US Ambassador to the United Nations Nikki Haley said on the following day (Tuesday) that the United States was withholding $255 million in aid to Pakistan because of its failure to cooperate fully in America’s fight against terrorism. It also added that more economic and military sanctions against Pakistan are in the pipeline and to be announced within 48 hours.

Pakistan actively took part in the 1979 US mission to oust the former USSR from Afghanistan. Then after Geneva Accord in 1988, Pakistan was abandoned and faced US sanctions in the form of the famous Pressler Amendment (to the US Foreign Assistance Act (FAA) of 1961). It stated that no military or technology equipment was to be provided to Pakistan unless the US president certified that Pakistan did not “possess” a nuclear explosive device and that the assistance provided by America would “reduce significantly the risk that Pakistan will possess a nuclear explosive device”.

Those sanctions were further tightened and multiplied in 1998 when Pakistan test-fired nuclear bombs in May 28.

Then suddenly Pakistan acquired importance after the 9/11 incidents in 2001 under the so-called "War on Terror" as Pakistan offered itself as a front-line state. Pakistan received huge foreign exchange in form of US Dollars as compensation for providing many airports for NATO force's airstrikes and use of its roads for supplies to NATO forces in Afghanistan.

Then in 2012, suddenly the US finds Osama Bin Laden was in Abbottabad and killed him, thus relationships between US and Pakistan become stressed as Pakistan termed the action as an intrusion in its sovereignty. Pakistan put behind bars Dr. Shakeel Afridi who allegedly supported the USA through a fake Polio campaign to verify the DNA test of the fugitive terrorist head of Al-Qaeda hiding in Abbottabad.

The US-Pakistan relationship further deteriorated after the withdrawal of the NATO forces by end of 2014 and since then Pakistan is again facing US sanctions. The USA withheld the due money to be paid as reimbursement under Coalition Support Fund and now the US says Pakistan had double-crossed. It can be implied that the US is a very innocent and novice state, which remained a fool (as admitted by General Trump in his famous New Year tweet) for years and continued supplying money to Pakistan without any realization.

Although, it is really very difficult to predict the next move of Pakistan to register its reaction as the key National Security Committee with representations from both the federal cabinet and Army has asked to defer the reaction of Pakistan to US President Trump's tweet, the US is aggressively threatening to Pakistan of further economic sanctions. Now the joint session of the Parliament would issue a reaction to Trump's tweet as it has been convened on Thursday. The NSC decision is appreciated by Pakistanis on the social media and in the newspapers. Dawn wrote an editorial on Wednesday appreciating the decision. It stated: "Yet, a hostile, threatening comment by a US president cannot simply be ignored, and Pakistan’s political and military leaderships did the right thing by meeting to discuss a joint civil-military response."