Impact of covid 19 on Pakistan’s economy | Graana.com Blog


Post Views:
6

The global pandemic has left everyone severely affected. It not only affected the people physically and mentally but also left the global economy crippled and weak. It is safe to say that the global economy has been affected at an alarming rate. Developing countries, such as Pakistan, have been a victim of Covid-19 as well. 

In this concise yet informative blog, we will shed light on the impact of Covid-19 on Pakistan’s economy.

The negative impact of Covid-19 on Pakistan’s economy:

Covid-19 spread like fire, and today, it has changed the dynamics of the world. Due to this global pandemic, the mode of doing business has changed tremendously. Some of the negative impacts Covid-19 has enterprises include:

Due to the ongoing global pandemic, the human capital got affected tremendously. Many people lost their lives to the outbreak, leaving their families stranded and without any financial backing.

Similarly, due to the pandemic, many businesses incurred losses. As a result, they laid off a considerable number of employees. Hundreds and thousands of people lost their jobs to the pandemic. 

Also, there is a considerable percentage of people who did not receive their full pays, and then there are those who received only a fraction of their original income due to the financial crisis faced by the companies.

Also, many offices in the corporate sector faced employee absenteeism caused by the pandemic itself. Many people took sick leave leaving the organization with fewer helping hands.

According to Investopedia, throughput is the amount of a product or service that a company can produce and deliver to a client within a specified period. 

Due to Covid-19, the demand for many products and services was reduced. As a result, the companies had to cut down their production capacities. This power reduction led to idle warehouses and machinery, adding additional costs to the company. 

For instance, one of the sectors that got affected due to covid is the airline industry. Due to travel restrictions, the planes were left idle, acting as a massive liability to the airline industry.

Due to the outbreak, most of the countries put travel restrictions and bans on the people. This restriction affected not only the people but also well-established businesses. Many people were stuck in foreign countries due to the travel ban. Similarly, the logistics and delivery chains also got affected to a large extent.

For example, the fresh produce exporters from Pakistan had to incur huge losses. For instance, the people who were into the mango and tomato export business had to bear losses because they could not send their produce to their foreign clients. 

It was commonly observed that many products and services were reduced due to the ongoing pandemic in Pakistan. For example, the tourism agencies operating in Pakistan had to shut down their business due to no sales. Similarly, the dining business was also a victim because many people had to close their shops as their expenses got higher than their profits and selling prices. 

  • Overall financial crunch:

A financial crunch is created by a situation in which the price of investment rapidly drops below its support level. Due to covid-19, many industries faced a financial crunch. The trade market suffered because of the price drop in many shares and stocks. 

Corona’s pandemic in Pakistan came with many challenges and limitations. During the pandemic, people came closer, nations identified their weaknesses, and came out of the pandemic with flying colors. However, the pandemic also acted as an event where we learned things we did not know we needed to survive in this competitive and uncertain world. 

The global pandemic opened new avenues for the people. A lot of markets and industries boomed during the pandemic and made huge profits. For example, during the pandemic, demand for many commodities and products increased by leaps and bounds. Initially, companies did not have capacities to meet the increasing demand. To cater to the growing demand trend, the companies started investing to increase their current capacities. 

For example, the market for face masks, soaps, and sanitizers boomed due to the pandemic. As a result, companies who were not even in the same niche invested and started producing these products in bulk.

Many traditional businesses had to reshape and reform due to the pandemic. Many companies and markets had to alter their traditional modes of doing business to stay in the market during the global pandemic.

For example, many businesses such as apparel and food chains had to sell their stuff entirely on the internet. People were not leaving their houses, so the companies had to reach the customers.

The whole logistic chain got disrupted, and the traditional ways of doing business revamped at a very high pace. This newer system is more efficient and convenient. Now, companies do not have to spend tons of money on warehouses and retail. They can create an online presence and a good delivery service, and they are good to go. 

Many businesses flourished during the pandemic. Also, many companies innovated and changed the dynamics of doing business. The information technology sector, digital marketing, virtual coaching, and logistic companies revamped significantly during the pandemic. 

Prospects and recommendations:

Many economic issues of Pakistan surfaced during the pandemic. The economic problems of Pakistan must be addressed and radical steps should be taken to eradicate these problems from the country. 

To excel and be successful in the global economy, Pakistani investors and business people require the government’s support. The government should give tax relaxation and subsidies to the people who want to start new businesses and to the people who want to secure their businesses. 

Also, the government should make policies and guidelines that ensure and safeguard the physical and mental health of human capital. 

The Pakistani economy has all the potential, skill set, and abilities to contribute significantly to the global economy. For example, Pakistan has an abundance of agricultural land. We produce a lot of fresh produce every season. However, because of the pandemic, a lot of export material produced got spoiled and rotten. In short, Pakistani producers suffered a lot due to travel and trade restrictions during the covid. To address this issue, government officials should take steps to ensure seamless trade channels with different countries.

The current situation of Pakistan’s economy got affected by the pandemic. The current situation of Pakistan is getting better but we need continuous improvements to stabilize our economy.

This global pandemic highlighted the importance of research and planning. Only those businesses survived during the pandemic who were agile and molded themselves with the environment. For example, food chains that shifted to online mediums stayed. 

Due to travel restrictions, the trade channels were disrupted. Many international brands became scarce. However, during this time, a lot of local producers came into the picture. For example, many companies started producing face masks and other medical instruments locally. 

So, these are some of the significant factors that affected the Pakistani economy. The impact of covid 19 on Pakistan’s economy was significant but we came out of it as a resilient nation. 

Covid-19 gave a very challenging time to human beings across the globe, but it also prepared us for the future and helped us explore untapped market segments. The current financial condition of Pakistan is getting better. We identified our mistakes and worked on our strengths. With continuous efforts, the economic condition of Pakistan will get better. 

We hope this blog proved to be helpful for you and may aid in reshaping your future investment decisions. 

If you have any questions or suggestions regarding the topic, please feel free to leave a message in the comments section below. Our team will love to hear from you.

Stay safe!

 




Learn All About the Impact of Pakistan’s New ‘Smart Village’ Initiative

Pakistan is making up for lost time by introducing a number of Information Technology (IT) initiatives to bridge the gap between communities to readily access information. However, this is not only limited to accessing information, but also provide a host of other opportunities to foster business activities, enable access to education and health services. In a new, the incumbent government has launched “Smart Village,” an initiative that has been facilitated by the Ministry of Information Technology and Telecommunications (MOIT&T) through Universal Service Fund. Let’s explore more about Pakistan’s Smart Village project.

Pakistan’s Smart Village Initiative

Pakistan’s IT exports have jumped to $1.7 billion in the 2020-21 fiscal year

The MOIT&T has launched Smart Village which is a project which will be introduced in four provinces of Pakistan, as well as Islamabad Capital Territory and Gilgit-Baltistan. This project is primarily aimed at enhancing access of Pakistan’s remotest areas to modern facilities and to train them to access these facilities easily.

The mechanism of Smart Village is pretty simple. The Smart Village will essentially have training centers in provinces’ and territories’ remotest areas to provide free-of-cost training to the youth. These trainings will be provided in the domains of health, education, and commerce; all facets of creating opportunities so the livelihoods of people can be significantly improved.

This is the latest initiative of the government’s Digital Pakistan Vision that will ensure increased collaboration between various sectors, stakeholders, and government departments with the citizens of different areas. The aim of the project is to introduce citizens’ access to these facilities in the digital realm to improve cost-effectiveness and facilitate efficient use of resources. As this is a project under the government’s Digital Pakistan Vision, the citizens will have access to a host of other mobile applications and services that have been introduced under this initiative.

This is a project of the MOIT&T in collaboration with Universal Service Fund (USF), which has partnered with Southeast Asia International Telecommunication Union (ITU) and Huawei. This is one of the 30 mobile applications, government web portals, and websites related to public services that have been launched so far.

Smart Initiatives Introduced By GoP

State Bank of Pakistan Museum
State Bank of Pakistan Museum is purposed to provide information the evolution of monetary systems throughout history

Pakistan’s Smart Village Initiative is the latest addition to the numerous smart initiatives introduced by the incumbent government as it makes steady progress towards exploiting opportunities in the digital realm.

The State Bank of Pakistan (SBP) has taken a key interest in improving Pakistan’s digital economy. For this reason, a number of electronic money institutions have been recently introduced. The SBP is working round the clock to ensure licenses are given to private mobile application designers so money transferring can be made much easier, especially as during the fiscal year 2020-2021, exports remittances from IT and IT-enabled Services (ITeS) grew by 46% to reach USD 1.7 billion, compared with USD 1.17 billion during the same period of 2019-2020. In order to maintain this upward trajectory, Digital Pakistan has introduced Raast, which is the country’s first digital payment system.

As Prime Minister Imran Khan has always labeled overseas Pakistanis the backbone of Pakistan’s economy, under Roshan Digital Accounts, initiatives such as Roshan Apni Car and Roshan Samaaji Khidmat have also been introduced that will allow expatriates to make direct investments.

By far the most inclusive digital program has been Ehsaas Saving Wallets, which is aimed at increasing financial inclusion of financially-isolated classes of Pakistan. This initiative provides an opportunity to the less privileged citizens of the country to have a bank account under the government-initiated scheme and be able to timely avail any opportunity of investing their funds.

Similar to Smart Village, the provincial governments of Khyber Pakhtunkhwa and Punjab have also introduced Digital KP 2020 Policy and Khidmat Aapke Dehleez Per, respectively. While the former is linked with improving digital governance, the latter will improve districts’ municipal facilities in favor of the citizens.

In education too, the Higher Education Commission of Pakistan (HEC) has introduced HEC e-library services. This is a revolutionary initiative for providing e-educational services to the people of Pakistan, and has been a welcome move especially in light of the covid-19 pandemic.

When we talk of enhancing the digital penetration in Pakistan, the biggest challenge to date remains for the real estate sector. In Islamabad, an online registration system for tenants has been introduced, whereas if you want to check for ownership of properties in any province, you can check data online as well.

 This is all about all the smart initiatives by the incumbent government, so far. We will keep updating you on the latest developments, and you can access all this information on Pakistan’s best property blog, Zameen Blog. You can also have your queries addressed by emailing us at blog@zameen.com.



How RERA will Impact Dispute Resolution in Real Estate

Post Views: 2

Preamble

As real estate is a valuable commodity in any society, disputes over its possession, ownership, control, and trade are common. Pakistan is marred by an ineffective judicial system that is over-burdened by land cases. It is reported that over a million cases are pending in the country related to real estate. As a solution to this problem, establishing an appellate tribunal under a real estate regulatory authority can greatly impact dispute resolution throughout Pakistan. Read our blog to understand the impact of RERA on dispute resolution in real estate.

Introduction

Throughout the world, real estate is considered among the most valuable assets. That is true for any country as land rarely depreciates and is also linked to many socio-economic growth indicators. Disputes in land and property are increasingly being witnessed across many areas of Pakistan. They are mainly related to the title of the property, property inheritance or will, damaged property, ownership dispute, and tenancy issues. The justice system of Pakistan remains inefficient as matters related to land are connected with the revenue department. Having to rely on their support for the resolution of real estate related cases makes the entire process more problematic and cumbersome. This makes dispute resolution a lengthy and resources hungry task. Although there are alternative dispute resolution mechanisms in every society, if one party alleges criminal conduct, it becomes better to utilise attorneys and legal processes of litigation. Therefore, implementing an appellate tribunal under a real estate regulatory authority will positively impact the resolution of land-related cases in Pakistan.

Dispute Resolution in the Real Estate Sector

Dispute resolution is the process of solving disputes between two or more parties whenever conflict arises. The techniques used in the process include citizens, governments, business entities, and corporations. Although it is usually done in courts, other methods like arbitrations, mediations, and conciliations are common in the real estate sector. Pakistan lacks a digital record of land titles, and there are high chances of fraudulent activity. This also makes verification of property titles a difficult task for the common public as not everyone can access the revenue department. Recently, a large number of new developers have come up with new projects that are not regulated under any authority. This makes buyers vulnerable to scams as the developer is not bound to fulfil his duty to the buyer. Moreover, disputes regarding the inherited or willed property are also common as, most often, the credibility of the will is challenged. Most people also don’t check claims to a property and the actual ownership of the seller at the time of buying. Lastly, disputes are common when it comes to rented or leased property. It is mainly because prior rules to the agreement are either not understood properly or are miscommunicated to entice potential customers. (Ayush, 2020)

Why RERA will Help Dispute Resolution in Real Estate

The most common reason for the delay of land-related cases in Pakistan’s judicial system is the unnecessary adjournment of cases, re-hearings, and slow progress in evidence built-up. It is most often the case that decisions are suspended over decades, and generations of families are involved in litigation processes (Dawn, 2018). Considering the present situation, the establishment of a real estate regulatory authority will also ensure speedy dispute resolution through the establishment of an adjudication mechanism. According to the Islamabad real estate regulation and development bill 2018, an appellate tribunal known as Federal Real Estate Appellate Tribunal will be established within three months of enforcement of the act. This means that all cases regarding the real estate sector, pending in any court of law, will be transferable to the appellate tribunal. Some mechanisms will ensure the speedy processing of cases as the accused will have to deposit 30 per cent of the penalty charges upon hearing of the case in cases of developer fraud. Each case will also be given preference within 60 days. Up to 80 per cent of Pakistan’s civil caseload is to do with land acquisition and titling disputes. The formation of RERA will also streamline the process of land titling, and therefore, this will also help in lowering cases related to land titles. Lastly, land administration officers do not explain or publish procedures related to documentation, land records, and the validity of officials. RERA aims to increase awareness among the masses in this regard and can significantly reduce the chance of disputes arising. (Government of Pakistan, 2020)

 

Conclusion

Pakistan is facing a crisis in terms of litigation of land-related cases. The real estate regulatory authority will greatly impact the resolution of land disputes by the establishment of an appellate tribunal that will only hear land cases. Mechanisms will be placed to ensure that cases are swiftly resolved and appeals made to current cases are taken on a priority basis. As there are many reasons for land disputes ranging from ownership, tenancy, inheritance, and developer fraud, the formation of a real estate regulatory authority will positively impact the situation.