Partners: FCDO; Ministry of Commerce; SMEDA
Project Duration: August 2020-February 2021
Team: Dr. Vaqar Ahmed, Dr. Adil Nakhoda, Syed Shujaat Ahmed, Asif Javed
The Ministry of Commerce (MoC) and SDPI are collaborating closely to assess Covid-related loss to current, new, and potential exporters. Due to lack of time and resources there are no survey-based analyses by sector and we have varying estimates of such losses. We do know through recent econometric studies that a 1% decline in global demand is leading to a 1.2 – 1.5% decline in Pakistan’s overall exports. The pandemic outbreak and prolonged lock downs impact exports through: disruption in supply chains, border closure to nonessential trade, and limited market for exports due to fall in demand. Therefore, there is a need to arrive at a better understanding of transmission channels through which Covid-19, low global demand, and volatility in oil and energy markets will impact Pakistan’s exports of goods and services.
The responses designed by the public sector and central bank do well to cover some risks of private enterprises which could be covered so that employment loss can be minimized. However on-going debates argue that the design of such relief packages also need to take into account how these enterprises particularly small and medium sized exporters could protect and possibly win back their market share abroad as trade normalises. In view of the above mentioned, SDPI continues to motivate the MoC, Ministry of Industries and Production, and their affiliate departments, most notably Export Development Fund, Trade Development Authority of Pakistan, and Pakistan Institute of Trade & Commerce to look in to designing a rapid response for small and medium sized exporters, working in both traditional and non-traditional export industries. We also see this as an opportunity to keep the design skewed to favour start-ups, innovative and creative enterprises.
Likewise, Ministry of National Food Security and Research (MNFSR), provincial Food and Agriculture Departments as well as Agriculture Universities and Research Institutes are working with SDPI under the umbrella of National Food Security Council established by the National Security Division, Government of Pakistan. The MNFSR has requested SDPI support in preparing a response plan to ensure food security amid various scenarios of smart lockdown and SoPs for continuation of agri-operations to avoid any supply shocks or disruption in the food supply chain. SDPI has already prepared SoPs for harvesting of wheat with the provincial governments however to deliver an evidence-based action plan for ensuring food security SDPI requires support in terms of data from the sub-national governments, district administrations, and other relevant agencies and resources in the agriculture ecosystem. The Minister for Food Security has requested SDPI to host the secretariat and convene meetings of the Food Security Advisory Committee, at least until the recovery phase of Covid-19. SDPI team is expected to extract actionable advice from each of these committee meetings Chaired by the Minister. This task is now becoming difficult due to financial limitations at SDPI.
This proposed research, outreach, and policy engagement initiative takes cue from the above mentioned and aims to highlight the impact of Covid-19 on select export segments, and the agriculture sector. Our suggestion stresses upon the need for rapid information, improved evidenced (based on micro data) to frame policies which strengthen firm-level resilience (intervention-I below) and coping strategies.
- Inception meeting, desk review to look for export losses in:
- Traditional sector: Value added textile and leather
- Non-traditional (export) sector: agro-processing and processed food
- Services sector: freelancers in digital space
- Field exercise including rapid firm-level survey of enterprises in Sindh, Punjab and Khyber Pakhtunkhwa. Field exercise will also include Focus Group Discussions and Public Private Dialogues (PPDs) in selected districts.
- Development of interim-budget proposals and present it to the budget preparation committee at the Finance Division and to all provincial finance departments.
- Drafting of report and share with the standing committee on commerce and industries.’
- Development of media kit to disseminate the findings.