INTERNATIONAL traffic, trade, investment and finance have been severely disrupted because of the global spread of Covid-19. The pandemic has had an adverse impact on the world economy, resulting in massive reductions in output and growth and, as a result, loss of jobs. The economic impact of attempting to contain the virus is contributing to a global recession. The IMF’s projections indicate that the recession caused by the pandemic in 2020 will be as bad if not worse than the recession caused by the global financial crisis in 2008-09. Some economists predict a prolonged slump, turning the recession into a depression similar to the Great Depression (1929-1933).

A common challenge facing all countries is unemployment due to economic stagnation. Workers are much more exposed and vulnerable to loss of jobs because of lack of or inadequate social protections, especially in developing countries. Therefore, mindful of the unprecedented health and economic crisis, the international business community has called upon world leaders to commit to urgent stimulus and safeguard measures to avoid rampant unemployment, suggesting urgent scale-up of social protections, including payment of a daily allowance, deferment of credit repayments and other liabilities for affected workers.

Governments are trying to strike a delicate balance between saving lives and livelihoods with a view to ‘flatten the curve’ of infections without levelling the income curve. While some countries like the US and UK have hurriedly passed specific legislations, other countries have adopted and are implementing various policy measures to address both health and economic risks arising from the pandemic. Health measures include restrictions requiring isolation, lockdown and curfew to limit virus transmission. Economic measures include financial stimuli to stabilise the economy generally and expansion or increase of unemployment benefits to mitigate human suffering specifically.

Policy responses from Pakistan comprise fiscal, monetary and financial measures, including eliminating duties on emergency health equipment imports, relief to daily wage workers, and cash transfers to low-income families — a total relief package worth Rs1.2 trillion. More measures by the State Bank include introducing a temporary refinance scheme for payment of wages and salaries to workers and employees of business concerns to support continued employment. However, these policy measures are ad hoc and provide temporary relief. Developing countries like Pakistan need to take a long-term view and not be content with such ad hoc measures.

Does Pakistan have a long-term solution for unemployment?

Everyone has the right to employment. The Universal Declaration of Human Rights proclaims: “everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment”. It further recognises the right to security in the event of unemployment. The International Covenant on Economic, Social and Cultural Rights also requires states to “recognise the right to work” and obligates them to “take appropriate steps to safeguard this right”.

The ILO Employment Policy Convention requires each member state to declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment with a view to stimulate economic growth and development, raise levels of living, meet manpower requirements and overcome unemployment and underemployment.

The right to work has been enshrined in various constitutions. In Russia, all citizens have the right to work and protection against unemployment under the constitution. In India and Bang­la­desh, the state is re­­quired to make effective provision to secure the right to work and public assistance in cases of un­­em­p­­loyment under the India.

In Pakistan, the state is required to promote social and economic well-being of the people pursuant to its constitutional Principles of Policy. The state is mandated to “provide basic necessities of life … for all such citizens … as are permanently or temporarily unable to earn their livelihood on account of infirmity, sickness or unemployment”. Pakistan does not have an employment policy in place to comply with this constitutional mandate. It should formulate an employment policy designed to promote full employment through job guarantee programmes and unemployment benefits through various compensation and insurance schemes.

Unemployment is as harmful as Covid-19. It is not a public health-related issue that only needs to be addressed in an emergency situation. Given the exacerbated unemployment situation that is likely to persist beyond the present pandemic, Pakistan should make every possible effort to tackle unemployment on a long-term basis rather than merely relying on philanthropic measures to overcome the current crisis.

The writer is an advocate to the Supreme Court of Pakistan.

Published in Dawn, April 21st, 2020