COVID-19 was one of the unprecedented challenges that shocked the globe and its inhabitants, affecting everyone’s life without restriction. The challenge was impossible: life was drastically reduced, and the world was halted for months. Economics negatively influenced all fields; the main driving force was hit hard. Industries were at a stay, social activities were restricted, and the workforce was idle. Thus mounting challenges emerged, which hit the developing countries to the core. Pakistan as a state represents mediocre economic uplift in the past years with COVID-19 proved worse for the industrial sector, exports and more essentially the economic activities were ceased. In this study, the vital aspect of how COVID-19 remediated the economy of Pakistan will be monitored and result in the rise of poverty.
1. Introduction
Every century surprised the globe with some natural calamities that proved humongous and drummed the point that despite all the technological up-gradation and progress, there are still challenges that cannot be adhered to base on modernization. Technological connectivity and modern communication mean evolved to the point where segregation and separation are no longer a global choice. The terms connectivity and interdependency represent todays’ sophisticated world. On the one hand, the technological revolution and presence of measures which blessed the lavishness and facilities to the global inhabitants but still there are associated shortcomings where the shrinking of any threat or pandemic cannot be avoided or lemmatized to a specific area or region. Thus, both aspects are associated with the world-leading towards the conception of the global village (Georgiadou, 1995). The rise of the recent pandemic proved global connectivity in today’s evolved world.COVID-19 emerged in the last months of 2019 in China and was paid less heed at the initial stage (Raghuvir Keni, 2020). The viral disease, which was even considered a variant of standard flue and some other minions of issues, presents insurmountable challenges in terms of social and economic restraints to the global level. The variant spread like fire in the jungle, with posting some unprecedented questions being asked. COVID-19 was destructive in terms of fatalities and economic restraints. Every industry ranging from tourism to production, marketing education, and most importantly the international trade, was determined to such a blow that it would be hard to recover in the coming years. Such measures will post significant shortcomings that will haunt the world economics by presenting some significant shortcomings and will haunt in the form of unemployment, poverty, and the decline of overall economic uplift ensured in the past few decades. In just above two years, the fatalities at the global level reached more than 1.3 million while on the other hand, millions and millions are suffering from every two to three months seeing a novel variant as the medical behavior is different so is the outcome and threatens the society on significant levels (Atluri, 2021). The economic issues arising from COVID-19 are still haunting the globe and may take years or even decades to address.
1.1 Research Objectives:
The research objectives of the current academic study can be monitored as it will act as a torch bearer in understanding how COVID-19 hits the country’s middle class. Moreover, the shutdowns and lockdowns also halted economic activities, which led to the rise in unemployed people and thus fell into the trap of poverty. Thus a link will be established and highlighted to understand the presence of COVID-19 responsible for a rise in poverty in the country.
1.2 Research Questions
The following research questions will be answered in this academic study:
a) How does COVID-19 affect the economy of developing countries like Pakistan?
b) What are the sectors that get the maximum impact?
c) How does poverty rise due to COVID-19 in Pakistan?
d) Till when the impact of COVID-19 will be felt?
2. Literature Review
Food insecurity is one of the leading causes of poverty, where many savings or daily earnings are deprived of food spending. As the food rates during COVID-19 stood up, the impact was worse on those at the edge from falling into the poverty trap. Pakistan, an economically developing state, scoreless efficiently on the various poverty indicators. The first one is the Global Hunger Index, where Pakistan’s performance dropped to 92nd in the list of 116 countries, which can be attributed to COVID-19 attacks and the declining economic activities (Kamal, 2021). The number of poor increases as the people’s ranges afford the basic facilities of life drowned and reached another low with the survival threatened over an extended period. Another ignored aspect of the COVID-19 and Poverty is that females are on the specific hit list as they received some economic jolting during the global pandemic. The women in Pakistan are economically dependent and can not survive on their own in the majority of the cases. In the presence of such steps, the emergence of challenges threatens their existence, specifically the garments industry, which is the primary source of earning for females and lion’s chunk of the female population attached with this sector. Reports by International Labor Organization (ILO) show that the shutdowns due to COVID-19 have disproportionately affected women, particularly the garment industry, which makes up a substantial part of Pakistan’s exports. In Pakistan, most of the population has employment within the garment industry, with approximately one in seven women working in this sector, which means almost 15 percent of the working women population get direct hits from only the sectors (Ren, 2020). The unemployment or mal-demand in the market due to restrained economic activities led towards economic problems, which resulted in income decline; thus, rise in poverty was unavoidable.While the poverty rate declined by 40 percent over the last two decades to 24.3 percent in2015, the IMF predicted a sharp decline where the threats of COVID-19 cannot be avoided. As of COVID-19, 40 percent of Pakistanis economic life will be threatened and shift them below the poverty line (UNDP, 2020). Real GDP growth is expected to slow by 3 percent, with downturns in services and manufacturing with which the commoners and middle-class Pakistani are involved in the majority. If lockdowns continue, agriculture will also lag and disrupt needed transportation, logistical support, labor, and access to inputs for the next planting season (UNDP, 2020). The farmers with spoiled production as the means to approach the market was limited also proves a leading source of economic problems, and the strain will follow for years to come (UNDP, 2020). The presence of such measures is proving too costly for Pakistan’s already declined and malnourished economy.As today’s world is of connectivity, the presence of such means ensures that any event at the global level will have an impact on Pakistan. The COVID-19 pushed more than 150 million individuals into the trap of poverty which for sure will have drastic measures on Pakistan as well. As depending on the severity of the economic contraction. Extreme poverty, defined as living on less than $1.90 a day, is likely to affect between 9.1% and 9.4% of the world’s population in 2020, it would represent a regression to the rate of 9.2% in 2017, and the outcomes on the negative side are counting (Bank, 2020).
On the other side, various sectors in Pakistan are declined due to the strong influence by COVID-19 and considered the impact to have an enduring and lasting outcome. . Research studies show that Pakistan’s GDP declined by 26.4 percent from mid-March to the end of June 2020 (14 weeks) compared to a non-COVID scenario. Services were hit the hardest, registering losses of 17.6 percent, followed by industry with losses of 6.7 percent. Agriculture was not that much hit, although the impacts will take time to notice, falling by 2.1 percent. All households witnessed a reduction in incomes and their economic condition worse, pushing them a step close to Poverty (Rana, 2020).
3. Research Methodology
Research methodology is the backbone of a study as the part is responsible for collecting and streamlining data and conceptual analysis that guide the results and conclusion of a study. This academic work will be based on qualitative research where numbers, figures, trends in the economy, rise in poverty and relevant data will be unleashed. In addition to this research methodology in this academic study will be secondary as books, magazines, articles in journals, and periodic and other means will be taken under consideration to move towards a conclusion.
4. Pakistan and COVID-19
Despite sharing the boundary with China and the recent gigantic economic activities between the two countries, Pakistan was quite fortunate that the COVID-19 reached the territory after a prolonged tenure, which allowed us to sum up the situation and make the obligatory steps to minimize the threats. Somehow we missed the opportunity, and COVID-19 soon evolved to the pandemic stage locally, with million falling to the deadliest attacks of a testing issue. The first case in Pakistan was reported on February 26, 2020, which lapsed more than three months after the virus initiation (Khadija Abid, 2020). Once reported within visitors from Iran, the spread of the virus was so speedy and quickly that it reached all corners of the country within no time. Thousands of deaths occurred, and millions were infected, but the truth is that human lives are most precious and should be guarded on all fronts; with COVID-19, there were severe and drastic challenges on the economic front. The global economy was jolted, and Pakistan, a developing country, faced the heat to the maximum level. From the decline in GDP to the rise in inflation, with the range of masses below the poverty widened to a new level, and most importantly, the unemployment on the rise is a direct outcome of COVID-19 with the astonishment that these aspects are often ignored or considered secondary. After the industry collapsed and unemployment reached a new height that threatened even the survival of some social segments, specifically the middle class (Aruga, 2020).
5. Economic Impact of COVID-19 on the World and Pakistan
The economy remains the most worrying sector for leaders and policy makers during and even after the COVID-19 pandemic. Resisting the drowned and lost territories required a significant shift as the hit were brutal, and the blows will dominate the recovery over an extended period. At first, the essential aspect of the global economy, emphasizing various sectors, will reflect how the pandemic proved vital in the declining and curtailment of economic activities. The first sector under consideration is tourism, which was hit hard. The losses during a single year reached more than 1.2 trillion dollars due to social restrictions; the free movement was compromised (Mamirkulova, 2021). The same sector in Pakistan tourism sector was promising in the last few years as they were immensely improved and provided the glimpse that the dark shadows on the tourism sector using terrorism vanished away as, after 2013, the sector grows by leaps and bounds to get the maximum out of it by generating jobs and some high yielding economic activities (Nafees Muhammad, 2020). The emergence of COVID-19 posed some serious challenges as the lockdown was imposed. Thus the tourist was not allowed to visit, which halted the industry to a new level. Some 20 billion-plus economic restrains and millions of domestic workers associated directly and indirectly were jobless or paid meagerly (Nafees Muhammad, 2020). As the sectors like tourism and others dried, the unemployment increased, which triggered the level of poverty. The rise in unemployment posed some direct challenges to poverty. This will be the main target of our study to link how COVID-19 catalyzed Poverty in Pakistan and to what extent the policymakers soothe the echoes of COVID-19 in the economic lives of ordinary Pakistanis. The impact of COVID-19 on the rise in Poverty in Pakistan will be the primary domain of discussion in this academic study. Such measures will unleash the point that the overall poverty increase with the stoppage of economic activities. Before establishing a link between Poverty and COVID-19, the step will be wiser to determine how poverty is defined. Then all the factors and relevant studies will be monitored to understand the result.
Thus Poverty can be defined as follow: 1: “Material lack or want: besides income, this includes absent, limited or low quality assets(such as shelter, clothing, furniture, personal means of transport, radio, etc.). It also includes inadequate access to services” (Ludi, ND) 2: “The first set of definitions understands poverty as a lack of material goods or services. People ‘need’ things like such as food, clothing, fuel or shelter” (D’Arcy, 2014) In both of the above definitions, one significant point is that poverty is the absence of means and value due to some social, political, or any restrain which did not allow the economic activities to emerge on a scale where the commoners and targeted community needs can be fulfilled. Such conditions arose during COVID-19, where things were taken to cleaners, and the threats were determined on a different and testing scale.
Conclusion
In a nutshell, the COVID-19 threat is of significant level, and it triggered the number of poor in the country as reflected by various hunger indexes. The economic restraints are not only of the food level but range towards a decline in the overall standard of living, the decline in GDP, rise in inflation, and draining of exports. These are glimpses of what COVID-19 did to the economies of developing countries like Pakistan. The facts and figures presented may be just the tip of an iceberg as the impacts may be enduring and everlasting comparatively.
The author, Sardar Sheheryar Khan is currently pursuing his BS Honours degree in Peace and Conflict Studies from National Defence University Islamabad (7th Semester). He recently completed his Diploma in Peacebuilding.