The numbers are in for India and Pakistan

Pakistan fared much better than its neighbour in terms of the impact of the Covid-19 pandemic


Shahid Javed Burki September 06, 2020
The writer is a former caretaker finance minister and served as vice-president at the World Bank

The numbers are in for both India and Pakistan. They don’t look good for India and are unbelievably impressive for Pakistan. Why this difference? I will look first at the Indian situation before attempting to answer this question. The information from India paints a troubling picture: the strategy adopted by Narendra Modi, India’s over-confident Prime Minister, to deal with the coronavirus pandemic has not worked. It has devastated the Indian economy and given the country the third place in the world in terms of the toll taken by the disease.

In March 2020, a few days after the World Health Organization (WHO) announced that the world was faced with a pandemic of exceptional virility, Prime Minister Narendra Modi decided to move. He imposed one of the severest lockdowns anywhere in the world. Not unmindful of the consequences his actions would certainly have, he asked for the citizens’ understanding. “Possibly many would be angry with me for being locked in their homes,” he said. But he insisted that there was “no other way to wage war against the coronavirus”. According to an assessment by The New York Times of the Indian situation, when numbers came in one set “showed that India had paid the price for its strict lockdown. Another number showed that India was paying the price of reopening businesses”.

Lockdown restrictions wiped out jobs and businesses and disrupted the Indian economy to an extent the Prime Minister and his advisers had not foreseen. The economy shrank by 23.9% in the second quarter of calendar 2020 compared to the same quarter in 2019. The decline was steepest among the countries that make up the Group of 20. Britain, with a decline of 21.7% in the quarter over the previous year, was next in line. Other large economies also experienced slowdown but it was not as severe as that in India and Britain. The second quarter decline in the United States was estimated at 9.5% and Japan registered a fall of 7.6%. Before the economy was hit by the virus, India’s GDP was around $2.9 trillion, making it the world’s fifth-largest economy, behind the US, China, Japan and Germany. It is likely to slip into a much lower position once the full impact of the pandemic has worked through the system.

This is opposite to what Prime Minister Modi had hoped to achieve for his country. His aim was to have the Indian economy reach $5 trillion by 2024 when the country will hold another general election in which Modi hoped to win again following the impressive victories in 2014 and 2019. The Indian economy has not contracted for two consecutive quarters — the definition of a recession — for the last 40 years. Now the country is certain to get into a recession possibly one of extraordinary severity. In eight core industries — including steel, cement, natural gas, and oil refining — output contracted by double-digit percentages in July 2020 over the previous year. As one American newspaper commentator wrote, “that kind of economic slump would be devastating in a country such as India, where nine out of 10 workers have no job protection or unemployment insurance, leaving them with almost no safety net.”

The data released by the government showed that consumer spending, private investment and exports had all suffered. These sectors had contracted by 47%. Arun Kumar, a professor at Delhi’s Institute of Social Sciences, said that India’s economy which includes millions of migrant workers who lost their jobs had suffered a blow bigger than most people realised. “My estimate is that after the government takes the unorganised sector into account the overall economic slide will be minus 40%.” The slowdown was unevenly distributed among the sectors of the economy. Good rains meant that agriculture performed reasonably well.

The lockdown was supposed to contain the spread of the virus. That seemed not to have happened in India to the extent hoped. After the Modi government began to relax the lockdown in May, India’s coronavirus caseload began to climb again. India now has the world’s third largest number of people affected by the virus. That is also the case with deaths from the virus. At 69,668 deaths, India is behind only the US and Brazil. The country’s seven-day average from virus deaths was above 900 since August 10. What went wrong? According to Tedros Adhanom Ghebreyesus, the director general of WHO, reopening too soon was a recipe for disaster. He said that countries that were serious about reopening must also be serious about slowing the pace of returning to normality. “This may seem like an impossible balance, but it is not. The more control countries have over the virus, the more they can open up.”

Pakistan fared much better than its neighbour in terms of the impact of the Covid-19 pandemic. In the six-day period from August 26 to August 31, the country reported 1,656 cases, a daily average of 276. The trend was sharply downward; from 482 cases on August 26 to 213 cases on August 31. Deaths from the pandemic were very low compared to India; the total for this period was only 18, a daily average of 3. Imran Khan, the country’s Prime Minister, came under pressure to follow the Indian example. Many experts and political figures pleaded with him to impose a lockdown in the county. He refused, pointing out that the country not only had a large population of poor; those who lived in poverty would not be able to deal with job losses and income declines. He proved to be right. He also declined to impose the will of the central government on the provinces. This was another difference from the Indian approach. New Delhi forced the states to follow its dictation. Islamabad allowed the provinces that made up the federation to find the approach that suited them the most. While India suspended all train and inter-city bus traffic, Pakistan kept its people moving. If there were job losses as a result of business closures, people were able to return to their villages from which they had moved.

Pakistan was also preparing for the future. In April 2020, the World Bank agreed to provide concessional finance to Pakistan for “pandemic response effectiveness”. According to the bank documents, the project development objective was to prepare and respond to the Covid-19 pandemic in Pakistan and strengthen national systems for public health preparedness. The project components include mitigation of disruptive impacts; contingent emergency response; and implementation of management and monitoring evaluation. This $200 million World Bank initiative was at the request of the government with a view to managing the pandemic while efforts were being made to develop a vaccine to protect the people from the virus.

 

Published in The Express Tribune, September 7th, 2020.

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