Impact of Covid-19 – Pakistan Today

This article will address the consequences of Covid-19 and other global affairs impacting economics, individuals and governments. It will also demonstrate how governments and businesses have responded to these.

Covi19 and Economies

Covid-19 has disrupted economies to a great extent. Lockdowns have reduced demand and damaged businesses with increasing government public spending that would rather be allocated to the provision of education or other public sector expenditures. Changes in the workplace have created fear due to increasing hybrid working as protecting data is now more vulnerable to unfair exploitation from external sources. It has also increased burden on employers for taking strong measures like providing vaccinations and safety guidelines, further reducing growth due to costs.

With the recent lifting of Covid-19 restrictions for instance, introducing the ‘Living with Covid’ strategy in England has resulted in prices soaring as demand is increasing, creating uncertainty once again considering the already rising prices with the UK with inflation at a 30-year high. This has been most evident in the real estate sector as demand for houses has been rising due to increasing remote working in contrast to the inability of suppliers keeping up with the demand. As a result, interest rates have also been rising with the SBP increasing the discount rate between September and December 2021 and the UK increasing rates to 0.5% in February 2022, a second hike in three months.

Covid and other factors

Global recovery from Covid-19 has been difficult as the recent Russian – Ukraine conflict has sent shock waves globally with oil prices rising considering Russia is the world’s second largest exporter of oil after Saudi Arabia. These have been rising due to increasing sanctions on Russia from The United States of America and other countries with additional ones like Shell intending to close in Russia. The closure of major banks like Goldman Sachs would also make it difficult for Russia to repay its debts, especially as Russia has $600 billion in foreign reserves which is now difficult to take out due to external sanctions and the fact that these are based in other countries. This will further reduce supply with increasing food shortages due to the ongoing conflict is also causing food and other essentials’ shortages in Ukraine considering property and building damage, impacting households. These have weakened global trade as well as Ukraine amounts to a large share of global wheat, accounting to seven percent as reported in 2019, affecting dependent economics on imports the most.

With the recent lifting of Covid-19 restrictions for instance, introducing the ‘Living with Covid’ strategy in England has resulted in prices soaring as demand is increasing, creating uncertainty once again considering the already rising prices with the UK with inflation at a 30-year high.

Further political chaos in Pakistan due to opposition parties joining to implement a ‘no confidence motion’ against the current prime minister Imran Khan has seen national protests, damaging global relations negatively as Imran khan blames foreign conspiracy and funding behind this motion. Political change of power in Afghanistan has also damaged growth with one newspaper source raising concern over how let alone economic decline, Afghanistan is at collapse in terms of growth. These factors affect medium sized businesses more severely in comparison to global corporations.

The positive impact of Covid-19 and other issues

Despite the uncertainty, Covid has also made topics like climate change, unfair labor laws discussed on a global level. For instance, businesses are now expected to improve their corporate social responsibility even more which is why recently, British Airways have committed to reduce carbon emissions by investing in aircrafts that are 40% more efficient and improving flying ways to achieve this aim. Covid-19 loans and schemes by governments were also introduced to assist employers providing employees and some firms are considering permanent hybrid working with increasing innovation as adapting to new styles is now the new norm. However, the drawbacks with these new innovative working styles like increasing vulnerability to privacy leaks should also be assessed.

Support has been given to Ukraine with the UK sending military and additional equipment, further pledging $100 million in the World Bank package. Pakistan has also assisted through humanitarian aid with major European members like France providing additional aid which would lessen the severity of this conflict.

Conclusion

It is evident that despite the Covid cases, it is less likely to see more lockdowns considering the damage already caused to economic growth and the fact that the recent Omicron variant was not as deadly as previous strains. Effective measures have also reduced Covid cases worldwide per the World Health Organization though it is yet to be seen how fast paced governments are recovering with major uncertain conflicts causing unforeseen consequences increasing.

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