The third wave of Covid-19 has emerged as a difficult challenge and Pakistan needs support of development partners to stimulate recovery, said Finance Minister Shaukat Tarin.
Speaking at a virtual event on the sidelines of the 77th session of United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) titled “Debt Relief in the Aftermath of the Pandemic: How can Regional Dialogue Help”, the finance minister said, “Our economy is showing nascent signs of economic recovery as large-scale manufacturing is posting significant growth, but there is a need to continue this momentum, which is not possible without external support.”
Tarin informed the forum about the economic challenges faced by Pakistan due to the Covid-19 pandemic.
Due to the precarious economic situation in 2018, the government of Pakistan had to opt for the International Monetary Fund (IMF) programme to fix balance of payments crisis. Pakistan successfully met all benchmarks during the first performance review, he added.
He said that all fundamental economic indicators had reflected significant improvement before the Covid-19 outbreak. Unfortunately, the Covid-19 shock resulted in a considerable economic contraction, leading to the loss of livelihoods, disruption to supply lines and limited economic activity during partial lockdowns.
Tarin added that to lessen the severe impact on the economy, the government of Pakistan introduced the largest-ever economic stimulus package for small and medium enterprises (SMEs) to shield them from insolvency and facilitated the construction sector and allied industries to stimulate growth during testing times.
About 16 million families were given direct cash transfers under the Ehsaas programme, which roughly accounts for 46% of the total population of Pakistan in order to protect the most vulnerable segments of society, he added.
The finance minister stated that now Pakistan had resumed the IMF programme and was faced with a difficult choice to strike balance between the need for fiscal consolidation and the rising demand for economic stimulus amid Covid-19 and in the post-Covid scenario.
The Maldives’ finance minister as well as high-level delegates from Mongolia and the Kyrgyz Republic participated in the session.
Other delegates highlighted the need for evolving a mechanism to provide maximum debt relief to the developing and under-developed countries, which were facing fiscal constraints and liquidity crisis during the pandemic.
The session concluded that there was a need for continued regional dialogue to learn from country experiences and thereby face challenges posed by the pandemic in a better manner.
Published in The Express Tribune, April 29th, 2021.