Decrease in GDP rate led to net job loss of 0.7 m: report
May 16, 2021
Hassan Abbas
This was according to the Report on the State of the Pakistan Economy: Growth Jobs, Welfare and Macro Policy in Pakistan.
The report was written by Dr Moazam Mahmood, Professor Faculty of Economics, Lahore School of Economics, Dr Azam Amjad Chaudhry, Professor and Dean, Faculty of Economics, Aimal Tanvir Malik Teaching and Research Fellow, Faculty of Economics, Lahore School of Economics.
Read more »Labels: Coronavirus, GDP, GDP Rate, IMF, Lahore School, Macro Policy, Pandemic
posted by S A J Shirazi @ 5/16/2021 01:41:00 PM,
IMPACT OF COVID ON PAKISTANI EXPORTS: A SURVEY OF EXPORTERS
August 06, 2020
Azam Chaudhry, Aimal Tanvir, Saffa Imran, Zoha Awais, and Anam Ali
Innovation and Technology Centre (ITC)
Lahore School of Economics
https://economics.lahoreschool.edu.pk/tmicmain.php
August 6th 2020
Background of Exporter Survey
The coronavirus pandemic reached Pakistan in March 2020 and like many others, the government responded with a series of lockdowns to limit the spread of the virus. The Innovation Technology Center (ITC) at Lahore School of Economics conducted a survey of exporters in June 2020 to measure the impact of the pandemic on export performance during the last few months. The sample size for this survey was 130 firms and the sampling frame consisted of exporters from Karachi, Lahore, Sialkot and Faisalabad. The majority of the surveyed exporting firms were from the textile sector while most of the other firms were sports and surgical goods exporters. The firms in the textile sector and the sports goods sector were mostly medium sized firms whereas the majority from the surgical goods sector were small firms. Below are some of the findings from the survey.
Read more »Labels: Coronavirus, Lahore School, Research
posted by S A J Shirazi @ 8/06/2020 05:28:00 PM,
Shrinking GDP, growing poverty: Experts for countering impact of coronavirus on economy
July 09, 2020
During the there-month lockdown due to the coronavirus Pakistan's annual GDP growth for the calendar year 2020 is expected to contract by 3.2pc and job losses is estimated at 1.6 million.
These were the findings made in the study on "Immediate policy for countering the impact of the Coronavirus Pandemic on Pakistan's economy must focus on Poverty" conducted by Lahore School of Economics Modelling Lab Innovation and Technology Centre. It was authored by Moazam Mahmood, Azam Chaudhry, Aimal Tanvir, and Muaz Chaudhry.
Read more »Labels: Coronavirus, Lahore School, Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 7/09/2020 01:30:00 PM,
Immediate policy options for countering the impact of the Coronavirus Pandemic on Pakistan’s economy must focus on Poverty
June 20, 2020
June 20th 2020
Moazam Mahmood, Azam Chaudhry, Aimal Tanvir, Muaz Chaudhry
Lahore School of Economics Modelling Lab
Innovation and Technology Centre
Lahore School of Economics
Quarter 1 2020 Estimates of loss in GDP and Employment
We have earlier estimated the impact of the Coronavirus pandemic on Pakistan’s GDP and employment. Using a General Equilibrium Macro (GEM) model for the Pakistan economy that the Modelling Lab Team at the Lahore School’s Innovation and Technology Centre has developed over the past two years for policy simulations and teaching.
Labels: Coronavirus, Lahore School, Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 6/20/2020 05:43:00 PM,
Pakistan's economy may contract 5.5% due to lockdowns
May 14, 2020
By Shahram Haq
Ever since the Covid-19 pandemic hit the globe, several international institutions have given various estimates about economic losses to different countries.
For Pakistan, a few estimates have been made by key financial institutions, which forecast the country’s economy will contract by up to 1.5%. However, a local business school has painted an even gloomier picture for calendar year 2020 in case the lockdown persists for nine months (March to November).
In a worst-case scenario, the think tank of Lahore School of Economics (LSE) has estimated that Pakistan may post a GDP loss of 5.5% if the lockdown continues for nine months. Utilising a general equilibrium macro (GEM) model, the LSE found that as a result of a three-month lockdown (March to May), Pakistan may experience a 2.9% contraction in GDP growth in 2020.
“This will result in a loss of 1.5 million jobs by the end of the year,” the study stressed. “Out of this, 1.2 million informal jobs will be lost while 0.3 million professionals employed in the formal sector will be rendered unemployed.”
It projected that if the lockdown was extended to six months (March to August), Pakistan would post a negative growth of 3.1% in 2020.
It would result in 1.6 million job losses by year-end, it said. Out of this, 1.3 million people will become unemployed from informal occupations and 0.3 million formal jobs will be lost. In the worst-case scenario ie a nine-month lockdown (March to November), the research said Pakistan’s economy would contract 5.5% in 2020, which would result in job losses for 2.8 million people.
The research claimed that 2.3 million jobs would be lost in the informal sector and 0.5 million jobs would be lost in the formal sector.
These estimates were made by initially adding a supply shock to the model based on the lockdown of various sectors of the economy followed by a demand shock.
The study utilised the theory that the present crisis was triggered by the supply shock just like the Great Depression of the 1930s, Asian crisis of 1998 and the financial crisis of 2008 that were all triggered by supply-side shocks. The lockdown of non-medical-cum-non-essential sectors of economies all over the globe results in a supply shock.
The supply shock leads to loss of income and output. The loss in income then results in a demand shock, primarily through reduced consumption and investment. So, the full impact on the economy comes in form of both supply and demand shocks. The think tank has estimated the supply shock based on lockdowns in various sectors in the wake of government’s directives. It is worth noting that these estimates vary considerably from the IMF’s early projection of a 1.5% contraction in GDP.
Also in The Express Tribune
Labels: Coronavirus, Lahore School, Pakistan, Pakistan Economy, Research
posted by S A J Shirazi @ 5/14/2020 12:05:00 PM,
Rediscovering Government
April 18, 2020
As already being observed globally, the public sector is taking center stage as countries tackle the repercussions of the pandemic. What makes this remarkable is that in many countries, and Pakistan is no exception, the public sector has been characterized as corrupt, inefficient and a drag on growth. This has led to a dismantling of the public sector with developing countries like Pakistan leading the way. But now as economies across the world grind to a halt, all eyes have turned to the public sector to save individuals, corporations and economies. While many people are saying that this may be temporary, there is a good chance that many of these government-led interventions may last for quite some time.
In order to understand why the public sector is failing in developing countries like Pakistan, one has to understand the way that the public sector has been systematically dismantled. This dismantling has not occurred naturally but has rather been the result of a coordinated effort by policy makers, entrenched elites and international institutions over the last few decades. These groups started by neglecting critical programs in key areas like public sector health with the hope that they will die a natural death. Then these groups promote the hope that the private sector will step in and provide better, cheaper and equitable services like private hospitals. But what we actually get are private sector entities unchallenged by the public sector that may provide better services but are happy to charge higher prices (just look at private hospital costs) and provide restricted choices.
But if Pakistan wants to survive the crisis, it needs to immediately strengthen the role of the public sector in a way that supports growth in tandem with the private sector. The most immediate step is to renegotiate the current IMF agreement. Budgetary restrictions in an era of a global pandemic are not reasonable and the idea that only coronavirus related expenses should not count towards the budget deficit needs to be relaxed. All of the stakeholders will have to accept that now almost all public sector investment, like developing public sector healthcare, are coronavirus related expenditures.
Next, we have to quickly accept the fact that simple transfers to poor households are not enough. The impending economic downturn will not only make the rural poor worse off, it will plunge most semi-skilled workers (many of whom work in the informal sector, like plumbers or electricians) into poverty. This means that the current cash transfer program that the government wants to ramp up will only be a partial solution to the economic downturn that has already begun. So the government must immediately increase spending to prop up consumption (which makes up the majority of GDP in Pakistan) with wage related support to low income groups as well as more direct transfers to consumers. Many other governments are increasing expenditures and promoting domestic consumption through significant transfers but Pakistan has so far failed to act.
Also, the monetary authorities need to act immediately and decisively to spur investment. Central banks globally have taken interests down to zero and though Pakistan may feel that it is constrained because of its bailout package, the time to act is now. Single digit interest rates should nudge the private sector back to borrowing and investing which will lead to higher productivity, greater employment and higher exports. And though everyone understands that high interest rates inhibit private sector borrowing, everyone forgets that the government is also borrowing at the same high rates. So single digit interest rates are immediately needed to spur both public and private sector investment.
Finally, the government must develop a plan for transformational investments made by the public sector that focus on people. It is easy to forget that almost all historical examples of private sector led growth have been accompanied by huge public sector investments in health, education and human capital development.Public sector investment in health and education is especially important now since the current global pandemic will change the entire structure of health and education. Public sector hospitals in developing countries will bear the brunt of the coronavirus patients while students in public sector schools and universities will be unable to access digital learning, which will exacerbate income-related inequalities. It is time to consider how private sector models of education and health can be translated into a public sector setting.
While a global pandemic rages, policy makers have to focus on protecting their citizens. But at the same time, they have to keep an eye on how to aid recovery when the situation stabilizes. It is interesting to see how quickly critics of the public sector have embraced government-led rescue plans. Presently, governments across the globe are spending amounts which have not been seen since the world wars and these expenditures will be the foundations on which private sector growth is eventually rekindled. And central banks are supporting these policies by lowering interest rates to unprecedented levels and combining this with massive infusions of cash.
The risk is that when this all settles and governments have helped to salvage economies, the powers that be (usually those benefiting from the massive income disparities that naturally arise in private sector driven economies) will again start to demonize and deconstruct the public sector. Though this will be more difficult in large developed economies, it will be far easier in developing economies like Pakistan. If Pakistani history has taught us one lesson, it is that we are incredibly efficient in taking apart the public sector and then wondering how it struggles whenever a crisis occurs.
The author is Dean of the Faculty of Economics at the Lahore School of Economics.
Labels: Coronavirus, Lahore School of Economics, Pakistan, Research
posted by S A J Shirazi @ 4/18/2020 11:57:00 AM,
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