Since the beginning of 2020, the novel Coronavirus (Covid-19) has adversely impacted the global economy and benefited only a handful of industries. Irrespective of being developed or backwards, people died in a large number around the world. Recently, the havoc wreaked by the virus in India has alarmed the bells in neighbouring countries too. Now the fear is almost the same as it was earlier created by the news from Italy, Brazil and the United States. The threat of a human tragedy lies in the fact that the virus is constantly changing its nature. The variant from Britain was not yet under control that the African and Brazilian varieties have also been reported in Pakistan.
As far as the economic impact of the pandemic is concerned, it is no secret that it has severely damaged almost every industry except the production in health and information technology, especially online education and media sectors. Whether it is tourism or the airline industry, the industrial or the services sector, foreign trade or small domestic industries, lockdowns and prevailing economic uncertainty are wreaking havoc globally. In a country like Pakistan, we are facing a situation like walking on a double-edged sword.
If the government locks down, there is a risk of ‘deaths’ due to poverty and hunger, and if the business is kept open, there is a risk of casualties due to pandemic and prevailing social ignorance. As an economist, I can safely claim that the pandemic is causing many times more economic damages than that of the loss of apparent deaths of people. Whereas the virus has so far caused more than 15000 casualties in Pakistan, it has already thrown millions of more people below the poverty line. Bringing them out again from the poverty trap will not only be time-taking, but the hunger will consistently shake their confidence, and the consequent lack of self-esteem will be hurting them for many years ahead.
In situations where we need to protect our health as well as avoid a major human tragedy, we need to make sure that our economic loss is minimal and that we return to the ‘normal’ by getting those people out of the poverty trap. The economic growth rate can be increased only if our industry and businesses continue to thrive, and hence aggregate demand for goods and services doesn’t decrease and unemployment doesn’t increase anymore, and when the mobility of people and commodities is not affected. Such a dream can only be realized if the majority of 220 million people of Pakistan develops immunity against the deadly COVID-19 and its variants. The immunity can be developed either naturally in people who get recovered after contracting the virus or who are getting vaccinated. If an economist is advising his countrymen to get vaccinated as soon as possible is just because he or she can see that it is more of an economic crisis than a general health issue. If you can suggest another solution to this problem at the moment, then do it, but for businesses to safely run and the economy to keep spinning, the majority of the people of Pakistan will have to develop immunity through vaccines.
The BBC and other broadcasters have made the headlines that at a time when the rest of the world is being locked down, Israel is at the top of the list of countries where mobility is increasing and deaths due to COVID-19 are declining, and where people are running their business and
How did this happen? Just because the number of per capita vaccinated people in Israel is the highest in the world. On the other hand, according to NCOC, there are just 7,11,400 people in Pakistan who got vaccinated so far, which is less than even one percent of the total population. With such a situation, running the businesses and keeping the economy open in such a densely populated country
Published at HumSub (https://en.humsub.com.pk/2478/economic-consequences-of-coronavirus-pandemic-and-the-role-of-vaccination/) dated 07.05.2021.