Coronavirus fallout: Pakistan braces for massive impact on trade with China

A Pakistani Naval personnel stands guard beside a ship carrying containers during the opening of a trade project in Gwadar port, some 700 kms west of Karachi on November 13, 2016. (AFP)
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Updated 19 February 2020

Coronavirus fallout: Pakistan braces for massive impact on trade with China

  • Deadly outbreak could affect 25% of Sino-Pak commerce, businesses say
  • Prolonged supply chain disruption may create a shortage of raw material in the country, experts say

KARACHI: A day after Moody’s predicted an economic growth slowdown across the Asia Pacific region, triggered mainly by the deadly coronavirus outbreak in China, Pakistan’s business community and experts said on Wednesday that it could disrupt 25 percent of trade between the two countries, due to delayed shipments from Beijing.

The international credit rating agency shared its research report on Tuesday where it predicted that the coronavirus outbreak could add to pressures on growth, with the impact felt primarily in trade and tourism, and for some sectors through supply-chain disruptions, too.

“Our baseline assumption is that the economic effects of the coronavirus outbreak will continue for a number of weeks before tailing off and allowing normal economic activity to resume,” Christian de Guzman, a senior Vice President at Moody’s, said on Tuesday.

Moody’s further lowered China’s growth, reflecting the impact of the virus which has killed 1,868 people in China thus far after it was first reported in January this year.

This is in addition to more than 72,436 cases of infections that are currently under investigation.

“We have lowered our China growth forecast to 5.2% for 2020 from 5.8% previously, reflecting a severe but short-lived economic impact, with knock-on effects for economies across the region,” De Guzman said.

The outbreak has also impacted China’s external trade and disrupted global supply chains, with the country’s economy on a standstill for the past three weeks after Beijing extended the lunar new year holiday to contain the spread of the virus.

Closer to home, it means a delay in shipments of raw materials to Pakistan.

“We can say that around 25 percent trade with China is impacted so far and if the holiday break is further extended, the situation for Pakistan may be worrisome because it may create a shortage of raw material for our industries,” Khurram Ijaz, Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), told Arab News.

Pakistani importers, for their part, said that delayed raw material shipments from China, especially chemicals used by textile industries, could have a negative impact on the sector.

“There is a disturbance in the trade flow as the supplies come from there (China). The production will be impacted in Pakistan because the raw material for many industries comes from China,” Imran Ghani, Former Chairman of Pakistan-China Business Council, said. 

Importers of chemicals and dyes from China fear that this could eventually lead to a substantial drop in exports.

“The chemical and dyes sector imports raw material for the textile sector that may hurt exports. At present, orders have been placed but shipment delays will create supply gaps and those who are not maintaining buffer stocks will face a difficult situation in meeting export targets,” Amin Yousuf Balgamwal, Pakistan Chemicals & Dyes Merchants Association, told Arab News.

Another sector that is bearing the brunt of the coronavirus outbreak is that of fruit and vegetables.

“We are facing a shortage of reefer containers due to a reduction in the volume of import cargoes, followed by a marked downward trend in the imports from China which is having a pronounced negative impact on exports,” Waheed Ahmed, the Patron-in-Chief, All Pakistan Fruit & Vegetable Exporters, Importers & Merchants Association (PFVA), said, adding that following a ban on the import of garlic from China, the Chinese garlic is “being re-exported from Pakistan, too.”

Pakistan’s import and export with China amounted to around $6 billion during the first six months of the current fiscal year FY20, while both the countries exchanged goods worth $11.8 billion during the last fiscal year FY19, State Bank of Pakistan data stated.

Use of contraceptives to bring down Pakistan's population growth rate to 1.1% – official

Updated 08 July 2020

Use of contraceptives to bring down Pakistan's population growth rate to 1.1% – official

  • More than five million babies are born in the country every year
  • Pakistan also plans to reduce maternal mortality rate from 170 to less than 70 per 100,000 live births by 2030

KARACHI: Pakistan plans to encourage the use of contraceptives to bring down its current population growth rate from 2.4 percent to 1.1 percent by 2030, a senior official told Arab News on Tuesday.
The country has developed a National Action Plan (NAP) to implement the recommendations of the Council of Common Interests (CCI) approved in 2018 to address the challenge of population growth.
“The plan consists of various components, such as population fund, legislation, curriculum and trainings, and talking to ulema [or religious scholars],” Dr. Shahid Hanif, Director General of the Population Program Wing (PPW), said.
It also seeks to increase the present contraceptive prevalence rate (CPR) of 34 percent to 50 percent by 2025 and 60 percent by 2030 to lower the existing average population growth rate of 2.4 percent to 1.5 percent by 2025 and to 1.1 percent by 2030. Officials say they hope to achieve these targets by reducing the present fertility rate of 3.6 births per woman to 2.8 births by 2025 and 2.2 births per woman by 2030.
At the current rate, the annual population grows by an average of more than five million newborn babies per year. After the growth rate is brought down to 1.1 percent, however, the average addition would be down to 2.3 million on an annual basis, keeping in view the country’s current population of 211.17 million.
The country’s federal and provincial administrations are taking steps to ensure universal access to family planning and reproductive health care services. The federal government wants to create a five-year non-lapsable special fund to reduce the population growth rate with an annual allocation of Rs 10 billion. The fund will be set up exclusively from federal resources without any cut from the provincial funds, according to the latest Economic Survey of Pakistan.
“Provinces have been given funding for more lady health workers and commodities [contraceptives] since the federal government will provide a matching grant to them,” Hanif said
One of the functions of the Population Program Wing is to ensure contraceptive commodity security, supply chain management and warehousing of contraceptives for provincial and regional population welfare departments.
A Contraceptives Commodity Security Working Group (CCSWG) has also been established to ensure the availability of birth control commodities, their timely procurement, pooled distribution, stock assessment and data availability etc
“With a manageable population, we will be able to utilize our resources more effectively for the welfare of people and our national economy. This is important since about two-third of Pakistan’s population is below the age of 20. These people need education, health and other facilities. If these individuals don’t get basic necessities, the country may witness huge social disruption in the future,” Hanif added.
However, he categorically ruled out that the country was considering “one child” policy, saying “it was never discussed nor thought about.”
The reduction of maternal mortality rate from 170 to less than 70 per 100,000 live births by 2030 is also among the objectives of the plan.