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Punjab economy may face $18-20bn loss in case of three-month lockdown

LAHORE: Punjab could face cumulative economic losses of $18-20 billion - equal to 10-12 per cent of the size of its economy, in a worst case scenario, should the Covid-19 lockdown in the province continue for three months.

The job losses accompanying the drop in the provincial economic output are projected to be in the range of five to eight million and almost all the people will find themselves out of job are expected to be immediately pushed below the poverty line.

The province has been put in lockdown for the last six weeks with most non-essential businesses and services shuttered down as part of social distancing measures to halt the spread of the Covid-19 in the province. The disease has infected around 5,400 people and killed 81 in the province till Sunday. The contagion is feared to spread faster after relaxation of lockdown restrictions on public movement and reopening of some non-essential businesses. The disease has affected urban areas more than rural ones.

The estimates about the economic and job losses have been projected in a new strategy developed by the Punjab Planning and Development Board in response to the challenges faced by the province in the wake of Covid-19 and its containment strategy: Responsive Investment in Social Protection & Economic Stimulus (RISE) Framework (RISE Punjab).

New strategy envisages raise in ADP from Rs308bn to over Rs600bn

The new document, being launched on Monday (today) by chief minister Usman Buzdar, will replace the five-year provincial growth strategy 2023, which has been rendered ineffective and useless in the new situation obtaining in the wake of the global health crisis. The framework integrates seven critical pillars to help Punjab fight back the health, economic and social protection challenges that have emerged over the last few weeks because of the spread of the virus.

The new strategy proposes several, short- to long-term, crucial interventions to combat the impact of the contagion on the provincial economy, jobs, healthcare system, poverty and public service delivery. The strategy calls for doubling allocations for the provincial annual development programme (ADP) from originally budgeted Rs308bn for the present fiscal year to more than Rs 600bn next year to ensure a quicker recovery from the Covid-19 impact through a rapid and sustained response from the government.

“This is not the time to be timid; we need to protect the economy and jobs now,” a senior planning and development board official told Dawn on Sunday.

The post-Covid-19 investment proposed in the strategy is on top of Rs140bn emergency package given by the provincial government to boost health facilities needed to fight off the virus pandemic, provide income support to the poor households under its social protection progranme, speed up public works programme to protect jobs and tax relief for the businesses in trouble.

The RISE strategy basically looks beyond the three-month Coronavirus shock to the provincial economy. It suggest bold fiscal and policy interventions for quicker revival of private businesses reeling under disruptions caused by the contagion on both supply and demand sides to protecting the low-income, vulnerable groups affected by the economic shutdown to shoring up healthcare facilities in the province beyond the emergency response.

Furthermore, it suggests implementation of new targeted interventions to bring about substantial improvements in the governance capabilities to enable the government to respond more effectively and quickly to challenges like the one thrown by Covid-19 contagion. Moreover, the document recommends implementation of an effective risk communication strategy to ensure people comply with safety measures required to protect them from the new infection.

The strategy also proposes improvements in public financial management systems to make them responsive to large shocks and make room for additional spending through efficient expenditure strategies and effective collection of taxes.

Published in Dawn, April 27th, 2020



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