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Policy Steps: COVID-19 & Pakistan

by PRIME Institute

1.Do not control prices, work on supply

The government should resist the temptation on controlling prices, as this provides wrong signals to both producers and consumers. Consumers go on panic buying and producers stop investing in supply. The government should still regulate, focus on supply, and take measures against cartelization and hoarding especially when it comes to food and medicines.

2.  Remove trade barriers

As we have advocated in the past, open trade helps in free flow of medicines and medical equipment, and government should withdraw such tariff and non-tariff barriers at least till the time the crisis is over. If Pakistan was a signatory to the Information Technology Agreement, as we recommended many times, import of medical machinery would be possible duty-free. Allow the free import of 3-D printer to help boost innovators.

3. Re-allocate resources to invest in critical manufacturing

Government should further reduce the interest rate and induce commercial banks to reallocate capital to the industries with plans to boost production in critical medical equipment such as ventilators and hospital beds..

4. Protect daily wage workers in the industries

Government should announce a new regulation to ensure that the workers on daily wages employed by the industry should continue to be paid during the factories closure.

5. Re-prioritize Zakat spending

Government should re-prioritize Zakat spending and should also encourage private companies and foundations to create a pool of funds to provide cash to informal workers in the industrial, agricultural and services sector during the crisis.