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The coronavirus pandemic in Pakistan took root due to inadequate testing of travelers returning from Iran, including the country’s first confirmed case, a patient diagnosed in Karachi on February 26. The disease spread during March and then spiked in April as community transmission accelerated. As of May 20, Pakistan has reported 45,898 confirmed cases, including 985 deaths and 13,101 recovered patients. While Pakistan’s government aimed to conduct 25,000 tests a day by the end of April, to date, the highest number it has conducted is 14,818 on May 15.

One of the biggest challenges for Pakistan will be the economic impact of the virus. Less than a year ago, Pakistan was forced to comply with its thirteenth bailout agreement with the International Monetary Fund (IMF), which included a devaluation of the rupee and an increase in utility prices. In February, Pakistan’s economy had been showing certain positive, albeit limited, trends—such as reserves of the State Bank of Pakistan hitting a twenty-one-month high. Now, however, the World Bank expects Pakistan’s real GDP growth will contract by 1.3 percent in 2020 and reach only 0.9 percent in 2021 under its baseline scenario. Pakistan’s informal economy, accounting for 72 percent of employment, has weathered previous financial crises but will be hit particularly hard as tens of millions of workers, who rely on cash-based sectors to meet their daily demands, will see their movement, and the movement of goods, curtailed.

Shreyas Shende
Shreyas Shende is a research assistant and executive assistant to the director at Carnegie India.

Another consequence of the pandemic has been an increase in the Pakistani army’s involvement in everyday affairs. Even as the virus was spreading, Pakistani Prime Minister Imran Khan resisted calls to impose a sweeping lockdown out of concern for the economic costs. On March 22, Khan affirmed that the government would not institute lockdown measures. However, within twenty-four hours, the army announced that it would oversee a shutdown to curb the spread of the virus—a swift step that marked a sharp contrast with Khan’s indecisiveness.

The Pakistani army has been fanned out across the country to assist civilian authorities. Its deployment is pursuant to Article 245 of the constitution, which has never before been invoked nationwide and states that no high court enjoys power in any area where the armed forces are operating, thus granting the army unchecked power. In addition to being sidelined by the army, the central government has also been criticized by opposition leaders in provincial governments, who are taking autonomous decisions to combat the pandemic.

Recognizing the challenges faced by society’s most vulnerable populations, the government has announced a financial stimulus package that includes 150 billion Pakistani rupees ($937.5 million) for low-income families to support monthly cash payments to households of 3,000 Pakistani rupees ($18.75). Despite these measures, Pakistan’s battle with the pandemic will still have to contend with a stronger army, political polarization, and weak health infrastructure.

Shreyas Shende is a research assistant and executive assistant to the director at Carnegie India.

  

Interview with Ayesha Siddiqa, research associate at SOAS South Asia Institute, SOAS University of London

How does Pakistan perceive the role of international institutions in combating this pandemic?

Pakistan has a long-standing relationship with the World Health Organization (WHO), which is guiding countries around the world during the pandemic. While COVID-19, the disease caused by the coronavirus, is a new and immediate concern, polio and other infectious diseases have started to resurface in Pakistan. However, Islamabad is also keen to seek further bilateral cooperation from allies like China, which has already sent medical equipment and aid.

The most important category of international organizations for Pakistan appear to be those in control of resources. Pakistan’s government has approached multilateral aid donors like the IMF, the Paris Club, and G20 to seek relief in debt repayment and help with meeting its other expenses. Yet Islamabad’s overall strategy during this period does not preclude its military-strategic sensitivities. It has remained focused on the UN to bring international attention to Indian-occupied Kashmir and the state of pandemic there.

Given that South Asia is the most densely populated region in the world, what are the opportunities and challenges for the South Asian Association for Regional Cooperation (SAARC) amid this pandemic?

Regional organizations like SAARC must cooperate to share strategies, medicine, and even personnel to fight the pandemic. However, the Pakistani government’s suspicion of Indian Prime Minister Narendra Modi has impeded progress on most regional initiatives. During a recent SAARC meeting initiated by India, Pakistan’s representative drew attention to the Kashmir crisis. Important as the situation in Kashmir is, Islamabad’s position has kept SAARC from moving forward on a range of other issues. Of course, this does not rule out bilateral cooperation between countries of the region.

With the Pakistani army deployed to assist federal and provincial governments with the pandemic response, how will its role evolve with respect to matters apart from foreign policy and security?

The military’s role has grown in part because civilian leadership has proved ineffective and unable to negotiate with provincial governments. Though units deployed around the country are cautious in approaching civilians due to fear of contracting the virus, the army has seen a tremendous increase in its organizational power. Khan has also suggested use of the Inter-Services Intelligence agency’s tracking system to deal with the pandemic, which could be used more broadly to counter dissent.

The hybrid civil-military regime in Pakistan creates greater comfort with military involvement in civilian affairs, which helps explain why former director general of inter-services public relations, Lt. General (retd) Asim Bajwa, was brought in as a special adviser to the prime minister for information. The civilian government and the military share opposition to the eighteenth amendment to Pakistan’s constitution, which grants financial autonomy to the provinces at the expense of the federal budget (including national defense). The civilian government is also centralizing overall decisionmaking and has set up a National Coordination Committee (NCC), headed by a three-star general, to fight the pandemic. The National Disaster Management Authority (NDMA), a key organization in dealing with natural emergencies, is already headed by an army officer. Both the NCC and NDMA deal with international agencies and distribute resources, acting as the face of the state response.

As the virus emerged in China, Pakistan’s all-weather ally, has there been an impact on local perceptions of China?

Sino-Pakistani relations are strong but nevertheless have their limits. The Pakistani government did not stop flights to and from China until late in the course of the pandemic. The two states cooperated on the understanding that China would not send home Pakistani students, especially those studying in Wuhan. Beijing agreed to take care of these students and keep them in quarantine. Moreover, China provided medical assistance to Pakistan, including ventilators and a team of doctors. Such decisions have maintained positive perceptions of Beijing, and China may play an even more central role in Pakistan’s postpandemic economic recovery.

Given preexisting challenges, the crucial role of the informal economy, and substantial unemployment, what steps can Pakistan take to mitigate the economic impact of the virus?

Pakistan must sustain its core industries and feed its population of 212 million people, while servicing its $110 billion in debt. Its rate of GDP growth has slowed from 5.5 percent in 2018 to 2.4 percent in 2020, according to the World Bank, though the IMF predicts a further fall to -1.5 percent this year. So far, the government has adopted a conservative approach, seeking funds from multilateral aid donors and assistance from the Pakistani diaspora network. The IMF provided a $1.39 billion relief package that will likely help pay off external debts. Islamabad is also negotiating with China for extensions on $30 billion in Belt and Road Initiative loans.

There is a serious need to renegotiate foreign debt and divert resources to health, education, and fiscal support to individuals and families. In addition, the government must reform domestic taxation to increase the share paid by the rich. However, there is very little momentum behind plans for economic restructuring.