April 7, 2020
(This is a long article)
Pakistan does not have the resources to sustain a lengthy closure yet we can’t all come out “dancing on the streets”.
However, I feel a four-pronged action is now the order of the day- continue with Coronavirus mitigation, restart limited commerce getting people back to work, the Government works on helping affected companies and uses funds to aid the unemployed (through registered NGOs).
The views in this Paper are personal and formed with a combination of thoughts from family members, inhouse executives and a series of publications on incentives being created by European governments on COVID-19 mitigation (some bibliography at the end).
- Government contracts local, reputed medical manufacturers to urgently manufacture N-95 masks for entire population.
- Isolate areas of city/towns where virus is dense and lock off those areas.
- Increase random testing.
- All “at-risk” people (demographics by age, prior respiratory problems like pneumonia, heart victims, etc) to mandatorily stay at home.
- Guarantee access to COVID testing & care at no cost – no matter a person’s employment status
- Make it mandatory for populace wear the N-95 facemasks when out of the house, with stiff, on-the-spot penalties for contravention.
- Any COVID family member to be isolated – for mental satisfaction, can stay in their own house but with completely separate facilities, etc otherwise to go to govt mandated facility. If former, then no contact between family members.
- Affected people must inform authorities of their condition, whereabouts – and authorities will keep check on them
- Sanitize & disinfect all public areas (be it transport, bus stops, hand rails, etc)
- Ensure supply on controlled prices of essential commodities, food items & medicines through utility stores & other channels; and ensure hoarding and price gouging does not take place.
- Pass on more benefit of int’l oil price reduction to public while government retains a portion to be used for the poor, daily wagers and unemployed during this crisis
- Duty free import for items NOT being locally manufactured- especially medical supplies.
- Restart industrial activity –
- However, only those companies registered with the SECP and Federal &/or provincial revenue boards AND are regular tax assessees would be allowed this facility.
- Only those companies NOT directly in contagion areas/zones.
- Responsibility of company directors/owners –
- Companies to ensure their employees are kept on the payroll- even if on [paid] leave – from the time of COVID downturn.
- All normal staff benefits (especially health) to continue.
- Daily wagers who are part of company operations would also continue as if no crisis had continued, even if the work for which they were casually employed has finished.
- Worker conditions, hygiene & sanitation as per COVID guidelines.
- Where possible, these companies to have labour stay on premises to reduce contact with outside world.
- ALL workers to wear masks, disposable gloves & use hand sanitizer in their work areas.
- When leaving work areas, dispose gloves, use hand sanitizer but keep wearing mask.
- Food shifts to be ensured to have minimal people together for meals
- All utensils to be cleaned with WHO-recommended cleaners- all surfaces, chairs, etc between food shifts too
- All work places, machines, toilets, etc to be regularly sanitized & disinfected.
- Temperature reading 3 times for 100% of staff in each shift.
- Immediately isolation & care of sick workers.
- Public space access – eg malls, offices, hotels, restaurants, etc- hands to be sanitized and guests to be given disposable gloves & face masks.
- Resume delivery services with delivery person using gloves & mask; and sanitizing the delivered items in front of recipient before handing it over.
GOV’T BAILOUT OF COMPANIES
By doing the below actions, Gov’t will help companies absorb the costs and shocks of this crisis, yet not give direct cash injection, keep people employed (even if at home) and restart economic activity.
- In return Gov’t will assist such companies subsidize their operations & costs from beginning February 2020 to end August 2020.
- In the first phase, would only apply to those companies which are directly affected by this crisis resulting in over 70% of their income being affected- and can be proved and established with documentation.
- Would only apply to companies registered with the SECP and Federal &/or provincial revenue boards AND are regular tax assessees.
- Any misuse & contravention of this bailout by companies would be a criminal action under CrPC.
- Specified registered private audit firms would audit revenue-side of each company applying for this bailout prior to bailout facilities.
- Following are the bailout suggestions-
- Exemption from all statutory taxes, duties & fees (federal, provincial, excise, vend).
- Exemption from all labour-related taxes, fees & cess.
- Exemption from Provident fund contribution from both parties.
- Exemption on all TAXES on UTILITIES for period of shutdown (and all such billing on actual-reading basis and not average-basis).
- Heavily subsidized utility costs- electricity, gas, water & sewerage.
- Drastic reduction in markup rates by slashing KIBOR to 2%.
- Exemption from sales tax. If full exemption cannot be given, exempt period of COVID crisis and defer the payment of sales for the balance period.
- Lifting of restrictions on Input Tax claims.
- Defer the payments of supplier & employee withholding taxes.
- Defer the payment of Advance Tax.
- Easy loans to such companies – for which SBP regulations will not apply and repayment will be over 10 years, with a two-year moratorium.
- Moratorium for existing commercial loans on such companies by one year.
AID THE UNEMPLOYED
By working with & through registered NGOs, the government can use cash incentives directly for other affected workers directly, the underprivileged & families who are not covered by above companies.
- Food rations to poor people and out of work families to be conducted by & through REGISTERED NGOs only- like Rotary clubs, etc.
- Government will provide the food rations to said NGOs but distribution will be NGOs responsibility.
- This will ensure that food is fairly and honestly distributed.
- Each NGO can be responsible for a certain geographic area and monitor/record said people through their CNIC.
- Such data to be provided by NGOs to provincial gov’t who in turn will cross check it with NADRA database.
- This will be the starting point for the creation of an official unemployment database too.
The above will ensure government resources and personnel are better redirected to controlling & curing actual COVID cases in known contagion areas.
“…and people who keep their jobs ‘are less unhappy and shocked [..]
They are less likely to dramatically cut their consumption.
That limits the overall economic damage.
When social distancing ends, millions of employer-employee
relationships will have been destroyed,
slowing down the recovery [..].”