A-1: Economic Growth, Social Protection, and the International Monetary Fund (IMF) Programme amid COVID-19
- The COVID-19 virus not only has a health dimension, but also a strong economic one, especially in terms of competition. It would be unjust if developing countries get the vaccine first since the poor in all countries have a higher death rate. All countries should have the same opportunity to be healed. Equality and justice are required when dealing with economic and medical challenges.
- The phenomenal growth in remittances has been a bonus for Pakistan. It needs to diagnosed whether this increase in remittances is permanent or temporary.
- The plight of the agriculture sector in Pakistan is quite poor. There has been negative growth in major crops in the last two years due to which Pakistan is no longer food sufficient. Water supply has diminished, crop area has reduced, and use of fertilizers has gone down. A long-term inclusive Farmer Strategy for Pro-Poor and Faster Agriculture Growth needs to be initiated.
- Technical and vocational training need to focus on the training of the workforce in the agriculture and livestock sectors, the main drivers of the local economy.
- Inclusive, robust and sustainable pro-poor growth has to be anchored in agriculture and livestock, from which 44% of the workforce (72% in the case of females) directly earns its livelihood. The sector requires support not only for poverty reduction and more equitable development, but also to bring more stability in growth in a manner that ensures that the gains that accrue from this process are safeguarded especially given the severe impacts of COVID-19 on small and medium-sized farms.
- The reforms in the area of agriculture marketing should also aim to strengthen market-related information systems.
- Skill enhancement of the rapidly growing young workforce has become obligatory on an emergency basis if the economy is to recover from the shock of COVID-19 impacts and progress in terms of earnings and productivity.
- Pakistan has no option at this point but to go back to the IMF Programme urgently. However, the country needs a bolder, more heterodox policy framework, as opposed to the orthodoxy of the Bretton Woods Institutions, to meet the challenges thrown up by the economic crisis as well as its management under the IMF Programme.
- Inflation over the past two years, especially during this year of the pandemic, has been a complex interplay of external, fiscal/monetary, structural, institutional and policy factors. Hence, the response needs to be multipronged. In the long run, pursuing sound macroeconomic policies that generate economic growth and employment in a low-inflationary manner is a potent way to insulate the populace from erosion of purchasing power. A focus on improving yields in the agriculture sector should be a key pillar of the strategy in this regard.
- With near-term growth prospects bleak, and unemployment and high inflation imposing a punishing burden on large swaths of the populace, there is a clear need for a policy framework that delivers less pain while achieving the broad aims of not just stabilisation but wider reform.
- Policymakers need to recognise that while large-scale job creation is not possible at the moment, the policy focus should also be reoriented towards jobs preservation. This requires a rejection of an important element of the implicit underpinning of the neoliberal framework that IMF programmes are built upon: the Schumpeterian concept of ‘creative destruction’.
- The Government needs to focus on attracting foreign investment during and post-pandemic time. Specific incentives for foreign investment in the health and education sector with improved technology should be given.
- A Social Risk Management Strategy that focuses on e-health, e-learning, e-delivery would be very beneficial for the country in the long term.
- Domestic resources should be diverted to e-health, e-learning and e-delivery.
- A Global Educational Security Index like Global Health Security should be developed that shows collective international preparedness for epidemics and pandemics crises.
- With health, education should remain the second vital objective in Social Protection Programmes for cash grant transfers and public school programmes. Education subsidies and fee waivers should be given by the Government to offset costs, as well as efforts made for ensuring that gender gap in literacy rate does not increase further.
- There is a need of long-term funding, institutional coordination and support for capacity building for sustainable social protection. Any new scheme must be informed by risk and vulnerability assessment and analysis.
- There should be re-assessment and evaluation of the existing policies and programmes of social protection and their outreach.
