Experts call for integrated approach to mitigate COVID-19 impact on labour force

Experts at an Online Seminar at SDPI stressed the need for a coordinated policy approach mechanism among the federal and provincial government institutions which they said is crucial to mitigate impact of COVID-19 on the labour force, a pandemic that has surrounded almost the whole world.

The participants agreed that the implementation time to deal with this crisis could have been greatly reduced if local governments and local actors were engaged.

The online seminar on ‘Mitigation action against COVID-19 and its impact on Pakistan’s labour market’ was organized by Sustainable Development Policy Institute (SDPI) on Wednesday.

Speaking on the occasion, Dr. Shamshad Akhtar, the former governor State Bank of Pakistan, said the government needs to move forward in an aggressive manner and revisit the macroeconomic framework completely. She emphasized the need for intensive discussions with the IMF and other international financial institutions. She also called for lowering the interest rate that she said is more of a market-based solutions than cash transfers.

Dr Abid Qaiyum Suleri, SDPI Executive Director, said philanthropy at an individual and firm level needs to be activated, as it has worked previously in floods and earthquakes with any organization such as NDMA and ERRA taking the lead. Furthermore, he added, if deputy commissioner’s office is used to make a list of the necessary items, local philanthropists and charity organizations will be in a better position to provide their assistance. He stated that tax should be made as an incentive and firms should be provided relief in utility bills that can be linked with tax returns.

Dr. Muhammad Nasir from Pakistan Institute of Development Economics (PIDE) said that there were different stages of lockdown as provinces were experiencing different impacts of it. We are moving closer to stage 3, which is the final stage of complete lockdown. He said that this stage can result in 18 million layoffs, that’s why the Prime Minister is reluctant to opt for this option. He added that estimates regarding daily wagers, street vendors, labourers and self-employers are conservative and do not reflect the ground realities.

Dr Mahmood Khalid, a senior economist from PIDE said that according to estimates the total magnitude of expected losses in the forms of wages is Rs 2,187 billion, which is in stark contrast with what the Prime Minister has offered. He suggested to scale up the existing social safety nets such as BISP keeping in the perspective that may come up with the lockdown. In his view, a central policy including all networks and organizations such as BISP, NDMA, NRSP, etc will have to play a role in both identifying and delivering to beneficiaries. He further recommended that the food security and livelihood component of these social safety nets should be given the utmost priority.

Mr Shahrukh Wani from the International Growth Centre said at this stage we can only guess what will happen to the labour market. However, we need to make sure that larger firms do not capture resources due to their lobbying power and the more vulnerable segment of society does not lose out in this process. He recommended that the health response needs a substantive plan that goes hand in hand with the economic response to this challenge. Furthermore, he said, firms need to be subsidized in order to avoid layoffs especially in the manufacturing sector with the more vulnerable segments’ daily wage losses included in the relief package.

Mr Waqar Sherazi, Implementation Specialist at Benazir Income Support Program (BISP), said that BISP uses a targeted approach, which is considered most sophisticated in the world. BISP, he said covers 93% of households of Pakistan with a special focus on the lower two quintiles which fall in severe poverty. To address this crisis, he added, BISP has created a system that will allow local governments to identify 2-3 million more people to be the beneficiaries of the economic package announced by the government.  To have even more inclusion, he went on to say, we have raised our cut-off score from 16.17 per cent to 32 per cent and made all the necessary arrangements regarding queries and co-operation with Telco’s to ensure this aid is disbursed within 15 days.

Ayesha Qaisrani, SDPI Senior Research Associate, moderated the session.

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