A year into pandemic: Economics of coping with third wave

The survey played a vital role in formulating targeted relief strategies by revealing community-level insights of the directly affected communities and their expectations from the government.

It was in March last year when the global pandemic hit Pakistan, debilitating the economy and making it difficult for people, especially those with menial jobs, to make ends meet. Sajid Khan, who worked at a restaurant in Peshawar, had to go back home in Nowshera empty-handed. He lost his job as a complete lockdown was announced in the wake of the COVID 19 pandemic. Sajid is the sole bread earner in his family, and he was riddled with anxiety as he had many mouths to feed but no money.

“The pandemic ruined everything. On April 30, I was fired by the owners of the restaurant along with other workers. My financial situation kept getting worse, and I was left with no other option but to borrow from relatives and friends. But for how long could I keep borrowing? In the end, I took my family back to my village as I was completely broke.”

However, Sajid’s ordeals have not ended. As the third wave of COVID-19 emerges, the government is grappling with the challenge to curtail the spread of the virus as well as safeguard people’s livelihoods. A spike in Covid positive patients across the country means around 700,000 cases have been reported so far. In Khyber Pakhtunkhwa alone, nearly 100,000 cases have been reported.

The situation merits prompt decision making. Lack of knowledge about the virus and the unplanned nature of lockdowns shook the country in the first wave of this pandemic. To learn from its experiences and improve rapid relief strategies, the Khyber Pakhtunkhwa government as well as the United Nations Development Programme (UNDP) conducted business and labour surveys. The first survey was conducted in April-May 2020 by the KP government, and the second one in August-September 2020 by Merged Areas Governance Project (MAGP) of UNDP which is known for driving innovation in solving complex problems.

The findings of the first survey showed massive lay-offs and losses across various sectors of Khyber Pakhtunkhwa in the backdrop of the rapidly increasing COVID 19 cases and government-enforced lockdowns. Building on insights gained from it, a second survey was conducted to get a deeper understanding of the socio-economic impact of the lockdown, and the economic recovery followed the easing of restrictions.

The Survey helped policymakers and analysts gain a profound understanding of the gendered impact of the pandemic. More than 3,200 respondents participated in the survey, of which 13 percent were women. Women also formed fifty percent of the total number of respondents in the informal employment category as the survey mainly focused on small business and enterprise owners, and daily wage earners who are often overlooked due to limitations of information and access.

This survey also highlighted key trends in people’s economic behavior during the ongoing pandemic and the lockdown, and identified outreach and effectiveness of the state-sponsored interventions to support livelihoods in Khyber Pakhtunkhwa and Merged Areas. Furthermore, the survey played a vital role in formulating targeted relief strategies by revealing community-level insights of the directly affected communities and their expectations from the government.

According to the survey, more than 70 percent of the business owners considered the threat of the pandemic to be serious and believed that a lockdown was necessary to mitigate the spread of the virus. However, despite acknowledging the imminent threat, 80 percent of enterprise owners reported that their businesses could not continue to sustain if the lockdown prevailed beyond 30 days.  They acknowledged both the medical threat and the threat to working capital.

“The lockdown was necessary but our businesses could not survive the losses for a longer period. I tried to pay salaries for the first three months, but after that, I had to lay off my workers as I did not have enough savings to sustain them and pay for the maintenance costs simultaneously,” said the owner of Kakakhel Wedding Hall, Charsadda.

“The government’s decision of easing restrictions on various business sectors despite a global lockdown has been a substantial initiative. Though we have been able to gain some revenue by holding small-scale events of 300 guests, unfortunately, it is not enough to cover the annual maintenance cost and salaries of permanent staff,” he added further.

A labour contractor working for a construction company at Hattar shared similar views about the government’s response during the second wave of the pandemic. “It will take time for the company to recover from the financial damage that occurred during the first lockdown. A large chunk of company’s current earnings is being spent to settle debts, which means payment of employees’ salaries is continually delayed.” People are relying on government support, he said.

In the first lockdown in March 2020, the KP government announced a stimulus package of Rs32 billion, which included funds for the Ehsaas Emergency Cash programme. This initiative was designed to provide one-time financial assistance of Rs12,000 to families of workers in the informal labour industry.

The programme provided immediate cash assistance to nearly two million families in KP.  In the Business & Labor survey, 68 percent of the respondents expressed satisfaction with the state-sponsored assistance initiatives such as the Benazir Income Program (BISP) or Ehsaas Cash Transfer scheme.

“I couldn’t find work when the cities were shut due to lockdown. It was a difficult time for me and my family. Through Ehsaas Cash Transfer, I was able to buy food for my family while I continued to look for work,” said Noor Habib, an informal labourer from Kohat.

Following the findings in the survey, a Provincial Task Force was set up to improve upon the aforementioned coping strategies and launch an economic recovery plan called Azm-e-Nau to generate income during these challenging times. The KP Additional Chief Secretary Shakeel Qadir Khan, heading the Planning and Development Department, said the objective was not to produce a statistically perfect survey but to provide general trend analysis on the prevailing circumstances and improve past coping mechanisms. The qualitative survey has also provided the government with a comprehensive comparison between implications of a partial and complete lockdown, helping it improve rapid relief measures.

Unfortunately, the country has entered the third wave of the COVID 19 pandemic. In his recent tweets and interviews, the Federal Minister for Planning and Development Asad Umar has warned the third wave to be “more deadly”. The need for credible data is crucial given the consequential economic impacts on vulnerable populations. But with the ongoing vaccine drives and the government’s proactive initiatives, the public is cautiously hopeful that the third wave will not impact the economy and livelihoods as severely as the first wave did.