KARACHI: The government faces mounting pressure as the spread of coronavirus has sent the Pakistani economy into a tailspin, with millions of poor workers at particular risk of losing work and few safety nets in place to compensate for lost income.
The spread of the disease caused by the virus, COVID-19, has rocked financial markets around the world, with the panic clear in stocks, bonds, gold and commodity prices, underlining expectations of severe economic damage from the outbreak.
Pakistani shares declined by more than 6.7 percent on Monday, the highest in 18 years, following a global equity selloff due to the coronavirus pandemic.
The International Labour Organization said this week about 25 million jobs could be lost globally due to virus. 
On Sunday night, Pakistan’s southern Sindh province, home to around 50 million people, went into complete lockdown. Other provinces are also observing varying levels of shut downs, effecting millions of jobs and businesses. 
More than four million daily wagers will be directly affected by the lockdown in Pakistan’s financial hub of Karachi alone as thousands of markets are shut down, Atiq Mir, Chairman of the Karachi Tajir Itehad, said. 
“I have a family to support,” Karachi salesman Abdullah Hashim said, saying a two-week lockdown in Sindh would put him under immense financial strain. “I earn around Rs. 800 per day and have no other source of income.”
Abdul Rasheed Channa, a spokesman for the Sindh chief minister, said the provincial government had allocated Rs. 11.6 billion to contain the virus, of which Rs. 3 billion had been released. The government would also distribute two million ration bags among the poor, he added.
Sherry Rehman, a politician from Sindh and a member of the Senate standing committee on finance, said the budget for the Benazir Income Support Programme (BISP), a federal program that gives cash to the poor, needed to be expanded. 
BISP was launched in 2008 and covers around five million people with assistance of Rs. 2,000 per month. The prime minister also launched the Ehsaas program last year which gives “assets” to people living below the poverty line.
“Daily wage earners get no sick leave and many are homeless. After diverting budgets to a higher BISP, an appeal should be made to philanthropists to help with rations for vulnerable families,” Rehman said. 
Dr. Salman Shah, an economic adviser to the Punjab chief minister, said the government was “fully ready” to support the poor with food supplies and had initially allocated Rs. 12 billion to combat coronavirus in the province. 
“Supporting the nation in difficult times would be the responsibility of the government,” he said, adding that the government would use BISP data to track poor families that needed support during lockdowns. 
Small traders are also seeking the government’s support through an economic stimulus package or initiatives like the Ehsaas program. 
“The government should come forward to support the business community through an economic package so that they could retain workers,” said Kashif Chaudhry, who heads a national association of traders, adding that the government could offer tax cuts and reduce energy prices.
Economists also suggest that the government pass on the impact of global oil price cuts to the public to help them compensate for losses. 
“Our finance minister has not given any fiscal response; he should have passed on benefits of oil price cut in the international market,” said senior economist Muzamil Aslam, suggesting that the provincial governments immediately cut taxes and the federal government facilitate the collection of utility bills in installments.
On Friday, Pakistan’s Council of Islamic Ideology called for the early distribution of Zakat, the obligatory annual charity in Islam traditionally given in the Islamic month of Ramadan which will begin this year in the last week of April. Zakat accounts for 2.5 percent of the total yearly savings in the form of cash, gold or silver.
Pakistan’s central bank this month cut its key interest rate by 75 bps to 12.50%, the first reduction in four years, citing a global slowdown due to the virus spread.