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Post-Pandemic Economies and Environment

Dr.Abid Rashid Gill

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The cleaner air in cities, the burgeoning biodiversity and dramatic shift to less pollution-intensive lifestyle across the globe indicate the scope of the environmental improvement that can be achieved in just days. This is what we need to adhere to navigate the current pandemics:COVID-19 and environmental degradation. The environmental issues as we know do not seem to wait for a more convenient time, we therefore must deal it and Covid-19 pandemic concurrently. It is a very fatal disease and has incited urgent response all over the world. The governments, businesses and industries have been forced to deal with the pandemic in an unprecedented way.

According to the experts, this pandemic has provided us with the opportunities to deal with other crises also. We can take a transnational leap towards a sustainable society that produce minimum wastes and emissions. How we deal with current pandemic will also set our environmental trajectory for the centuries to come. The changes in our behaviour that we are experiencing nowadays and some of which may instilus permanently have a far-reaching impact on the environment. Our consumption and travel patron are more responsible: driving less car, attending online meetings rather than taking flights. Equally, it indicates that considerable dent on emissions and wastes products can be made without disturbing too much economic growth.

However, according to International Renewable News Agency (IRENA), for the long-run substantial reduction in the emissions of the toxins, huge and lasting changes are needed in the way how energy is produced and consumed. Though China and India two major growing economies, observed 25% and 30% reduction respectively during the months of lockdown. However, a shift towards low-emission society cannot be accomplished only via individual choices instead it involves reimagining the ways our urbane centres are built and organised, how roads are laid out so that moving without cars become easier, how provisions for walking, cycling and public transport is mad. There is a need for complete overhauling theway we grow, manufacture, trade, consumes and the way we travel.

Cities of Western Europe have been leading this transition by introducing innovative infrastructure projects: Milan has allocated 35 Km street for pedestrians and cyclists; Brussels has created 40km of a new path for cyclists and France has subsided cycling. Also, the Mayor of London started taking measures to build a car and buses free streets and bridges. Similarly, many cities are working on the circular economy where wastes are minimized through reuse and recycling. Following the footsteps of these cities, Pakistan also needs to devise pro-environmental urbane policies and mobility models.

Many studies such asYaron Ogen, 220 and  Dario Caro, 220 indicate a strong link between COVID-19 death rate and an increase in emissions. Especially in North Italy and Spain, the high death rate from COVID-19 is seen to be associated with high air pollution in cities. Curtailing the pollution, therefore, would reduce general health burden and prevent any future pandemic may not prove to be so lethal. It has been learnt from the pandemic that early actions to contain the virus were more effective than trying to deter when the virus has spread. The same is also true for the environmental issues as Prof. Stern of Brentford claimed in 2006 that “countries needed to spend 1% of their GDP to stop greenhouse gases rising to dangerous levels. Failure to do this would lead to damage costing much more, the report warned – at least 5% and perhaps more than 20% of global GDP”.

Eventually, it is time for governments to forge with the private sectors to produce a sustainable economy. After this pandemic is over, the businesses, the industry, and individuals would plead to governments for state support. The governments should have an agenda of a sustainable economy while pouring money into the economy as aid packages. Governments should use this opportunity and must take a long view to utilize the stimulus packages. To an extent, the impact of COVID-19 on the environment is the functions of a kind of fiscal stimulus will be adopted in post-pandemic. Ideally, we should avoid a post-2008-09 financial crisis when fiscal measures of China government boosted the emissions by 6% (World Bank,2020). Rather, a more successful model of South Korea should be borrowed where stimulus package of 2008 included investment in natural conversation, energy efficiency, renewable energies, and sustainable transportations.

The COVID-19 virus is a global issue that requires a global response asall states are sharing data, experiences, equipment, and resources to deal with this pandemic. This same spirit of international collaboration is needed to produce the viable solution of the environmental issues. An inclusive global programme collaborated by rich and poor nations that ensures sustainable production can ensure low-emissions economies across the globe. The post-pandemic economies should be navigated in a way that protects people and planet and avoids any ecological destruction that leads to viral diseases. This pandemic can be taken as a mandate to build a new world from its broken parts.

Dr Abid Rashid Gill is serving atthe economics department of The Islamia University of Bahawalpur (IUB), Pakistan. He completed his PhD in environmental economics from the Universisiti of Utara Malaysia (UUM). He has published many research articles on environment issues in impact factor journals of international repute. Environment economics and sustainable development are his special area of interest.

Economy

Covid-19 Create more Challenges for Industrial Special Economic Zones (SEZ) in Pakistan

Mohsin Rasheed

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China Pakistan economic corridor CPEC is biggest achievement and effective agreement between Pakistan and china. CPEC is refereed as innovative project also a big achievement for Pakistan and also a beneficial for china. There are many Special economic zones developing in Pakistan but Nowadays, Covid-19 is increasing rapidly in Pakistan. Extremely a very bad situation of Pakistan economy as well as global economy due to this pandemic situation. Corona virus effects many business and major Flagship project CPEC development due to shortage of workers.

During CPEC developing there are many internal or external challenges between china and Pakistan towards CPEC project and industrial zones other than corona virus. The route is 2000 km long starts from Kashgar (North western china) to Pakistan Gwadar. This route have many various economic industrial zones, energy plants, infrastructure routes and cable connections. They proposed 37 economic zones in Pakistan but only 9 economic zones are prioritized to be established.

This all development and innovation is will highly effective for economic steadiness but there are some many challenges faced by china and Pakistan between CPEC project such as energy shortage and infrastructure projects. The future expectation of both countries are very big in count in case of development and innovation. Pakistan is also importing innovation from china with a help of various projects. CPEC is game challenger project for Pakistani and its project worth is $64 Billion. CPEC is overcoming challenges for making more innovating Corridor between Pakistan and china.

Pakistanis is still under develop country and seeking more innovation from china through China Pakistan economic corridor (CPEC). CPEC is a great opportunity for Pakistan to enhance the economy development in a right way and boost the infrastructure and energy sector. CPEC is a part of (One Belt One Road) OBOR the global project of XI JIMPING.  CPEC helps to china to trade with global regions of east and west routes.

As we all know CPEC is an innovative Project between China Pakistan, firstly I have figure out issues between CPEC project, actual need of development, Project orientation, unemployment, education sector, water shortage, energy issues, development projects such as energy and infrastructure and direct and indirect pressure from US. There are some other development challenges faced by china, they are not listed yet likewise in Gwadar infrastructure

The status of china economy is very popular in Asia as well as whole world. China has the established economy like the US, according to the various researches china would overtake US to be most famous economy in the next some years. China main focus on technological innovation in Pakistan while developing CPEC so with the help of innovation Pakistan will adopt many innovation from china.

The energy projects as whole will addition 10440 megawatts to maintain the capacity. Estimated cost will be $ 15.5 billion for electricity generation. In second round, another megawatt about 6600 added in project to generate more electricity and it cost around $ 18.3 Billion. After completion of all energy projects energy generation will be boost up compared with previous electricity generation. This production boost economic growth has strong relationship and for better production as well as economy.

Infrastructure projects are very important for Pakistan and china off course to maintain trade and routes to kashgar to Gwadar and other Asian countries as well. Big infrastructural projects are proposed and are in advancement which will add around 3000 Kilometers to the current street combined with the railroad lines along the course. We will get the “National network” which incorporates the availability among nodal urban areas (Peshawar, Islamabad, Hyderabad, Karachi, Gwadar, Sakkar, Quetta, Lahore and Faisalabad), provincial urban Mergers and it’ll additionally make the new urban zones. While “Provincial Connectivity” is comprised on CAREC, Gulf States, Afghanistan and Iran. These undertakings will be finished with an assumed expense of US $ 10 billion.

CPEC gives a number of possibilities, the primary of which economic development. The large influx of investments will work as a strong monetary incentive for Pakistan’s government and social sectors to encourage business to enhance the foreign investment in Pakistan with the help of economic development, that allows you to now not only benefit Chinese traders engaged in CPEC, however will also gain all foreign investors in Pakistan, for example Russia and united states. Improvement in industry sector also create more employment for people. It also reduce the financial burden and social threats.

CPEC is association numerous locales and could add to the further integration of South Asia. The center rationale of CPEC is to development framework to encourage interconnectivity. Many countries and area get advantage from it. The venture is required to interface numerous nations China, Pakistan, Afghanistan Iran, and Central Asian nations together, incorporating a market of two billion individuals and balancing out the district. CPEC will enable South Asia to appreciate the full advantages of district wide exchange, extending from Iran to China.

China is one of the biggest economy and also has beaten US in many things even facing corona virus pandemic conditions but he will beat completely after some years so due to this there are many security threats to china projects like CPEC and Belt and Road Initiative (BRI). Security threat is for both countries, especially Pakistan have many threats due to terrorism, extremism, political parties, Tareek-e-Taliban, Baluchistan liberation Project (BLP) Laskhkar-e-Tayeeba, corruptions, Gwadar and other militants. All these parties and international forces are creating issue to stop this mega project CPEC. They basically don’t want to promote development in Pakistan. Hopefully China will overcome this issue with the help of Pakistan’s cooperation.

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Economy

Building Back Better: The new normal development path

Alek Karci Kurniwan

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Global stock markets such as Footsie, Dow Jones Industrial Average and Nikkei has decreased the profit since the outbreak of Covid-19 Pandemic in early 2020. Dow Jones fell to its lowest point, minus 35%, in April 2020 (Bloomberg, 4/27/2020). In US, more than 1 in 4 workers have lost their jobs since the coronavirus crisis shut down much of the economy in March.(National Public Radio, 28/3/2020).

Even the trend of Covid-19 death case has decrease, but still worried. Will the second wave happen? Because of that a new normal order is needed, when the spread of the pandemic stops and then the economy returns to normal.

There are at least two potential scenarios for the recovery of the economic crisis which were affected by Covid-19. The first scenario, gross domestic product will be pushed in such a way as to make the economy grow faster. By stimulating consumption, investment, government spending, and commodity exports.  At the same time, industrialization will grow stronger than the pre-Covid-19 conditions.

Environmental conditions that had improved during the emergence of Covid-19 might be polluted again. Carbon emissions are predicted to rise into the air, to pre-Covid-19 levels, and will even be higher than before. This is what is called the “revenge pollution” phenomenon. Like the recession and the global financial crisis in 2008, which is comparable to the scale of the crisis impact of the Pandemic Covid-19, even in very different kinds. Governments in the world responded with an economic rescue package and a stimulus worth by billions of USD. But in the last decade, greenhouse gas emissions have increased.

China has a real precedent. In response to the global financial crisis in 2008, the Chinese government launched a USD 586 billion stimulus package focused on massive infrastructure projects. That is why China’s industry has grown rapidly over the years. But for the environmental impact, their emission levels increased. Known as “airpocalypse” as the worst smog in city centers, such as Beijing in the winter of 2012 and 2013.

Besides, the world also creates a level of inequality that is far greater than that seen since the Second World War. The world shows a very striking difference between the super-rich and the very poor in terms of health, job security, education and other matters. As stated by Oxfam (2017), the wealth of 1% of the rich is equal to the combined wealth of 99% of the world’s population.

Then the second scenario, where we depart from the revenge pollution precedent after 2008. Pandemics give opportunities, when the economy back to begin normally and new rules, there is an opportunity to make the impossible to possible – or the last ignored things can be applied. This is the best time for the green agenda includes in the order that we want to renew.

Oxford University recently published an interesting study related to the global crisis recovery plan, entitled “Building back better: Green COVID-19 recovery packages will boost economic growth and stop climate change.” The focus of the research is to compare between green stimulus projects with traditional stimulus, such as the taken steps after the 2008 global financial crisis. The researchers found that, green projects create more work, provide higher short-term returns, and lead to long-term increased cost savings.

In economic development, to quickly recover from the crisis, the Government needs projects, which is called by experts with the term ‘shovel ready’ infrastructure projects. It exceeds labor-intensive projects, it also does not need high-level skills or extensive training, and gives profitable infrastructure for the economy. An example is the clean energy infrastructure, which produces twice as much work as a fossil fuel project.

We can see the need for bicycle-friendly and pedestrian-friendly infrastructure in cities. Then build a broadband internet network connection, because online systems for schools and work will be used massively. And the network for charging electric vehicles. Therefore, in the future we will definitely need more electricity. It also needs mass projects for solar, wind and biogas power plants.

According to WRI (2017), the main sources of global greenhouse gas emissions are electricity (31%), agriculture (11%), transportation (15%), forestry (6%) and manufacturing (12%). All types of energy production contribute 72% of all emissions. The energy sector is the most dominant factor causing greenhouse gas emissions. That’s how our lives are still dependent on fossil energy in the “old normal”. “New normal” should be able to replace old energy sources with renewable energy.

In April 2020, EU Ministers of environment launched “The European Green Deal” as the point of the post Covid-19 recovery process. At least 100 billion Euros were mobilized during the 2021-2027 period in the most affected regions for investment in environmentally friendly technology, decarbonate energy sector, and other new green norms.

CEOs of large companies such as Ikea, H&M and Danone have signed commitments representing the private sector in this alliance. The Contracting Parties understand that the fight against climate change is the point of Europe’s new economic policy, with an emphasis on renewable energy, zero emissions and new technology. This should be an example for the world in crisis recovery from the impact of the Corona virus pandemic. There is an opportunity to redesign a sustainable and inclusive economy.

In the Paris Agreement 2015, countries in the world have agreed to responsible for reducing the impact of climate change, with different portions and capabilities.The target is quite high, the world must reduce emissions by more than 45% if global warming is limited to 1.5 °C. Without the great new adaptation, the goals won’t be achieved easily.

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Of IMF’s Debt Trap and Chinese Debt Peonage

Abdul Rasool Syed

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With the mandate of fostering global monetary corporations, securing financial stability, facilitating international trade, promoting high employment and sustainable growth, and reducing poverty around the world, IMF formally came into existence in 1945 at Bretton Wood conference. Ever since its inception, the fund has been under severe criticism by economic luminaries, celebrated academicians, and the enlightened political scientists belonging to different parts of world exclusively to the third world countries.

For many observers, the problems of the fund are congenital; Bretton Wood produced a deformed infant and a little has been done through the years to overcome such deformities. The assertion is often made the fund was created by and for industrial countries with no concern for the developing countries. Much of the criticism on fund revolves around the conditions attached to its lending facility.

According to well-versed economists, when the fund prescribes austerity to the recipient country, the health budgets are cut down, children are forced to leave schools and the workers are thrown out of work. Education and health sectors suffer the worst consequences of IMF’s prescribed austerity drive. IMF with utter disregard to domestic affairs of the host country prescribes its own recipe to cure the ills of borrowing economy.

It dispatches a team to assess the economy of the host country, measure its performance, and to recommend corrective measures and remedial actions; of what Joseph Stieglitz– a former World Bank chief economist famously scorned as second-rate economists from first-rate universities–says, “They are well-meaning people and I am sure they want to help. But their visits are painful reminders of riots in Bolivia, Indonesia, and strikes in Nigeria…”

Another renowned economist Jeffery Sachs argues that the IMF’S “usual prescription is budgetary belt-tightening to the countries who are too poor to buy such belts”. Furthermore, it reminds me the prophetic words of Harry White former assistant to Secretary of the U.S treasury who once said “I don’t think the fund should butt into every country’s business and say “we don’t like this or that”.

Moreover, for the developing country like Pakistan, the IMF prescriptions are force-fed and according to one economist, we have to swallow the IMF prescribed medicine because we have no other choice. He adds that some of the recommendations of the fund are like a doctor stemming the bleeding of your arm by stopping your heart. Thus, such prescription incompatible with the domestic market of the borrowing country does not bear any fruit. It rather redoubles the difficulties for the host country to cope with its socio-economic challenges.

In addition, there is also a widespread perception in developing countries that by giving its own program, the fund entraps the borrowing country and thereby penetrates deep into its economic system. The fund’s undue intervention in the country’s internal economic dispensation results in economic chaos and uncertainty. The policymakers are therefore unable to craft economic programs in accordance with requirements of the home economy. Consequently, the country is forced to surrender its economic independence and financial sovereignty.

Another allegation leveled against the IMF is that it is a tool of U.S foreign policy that furthers its strategic and economic interests.
Being the only nation with an outright veto helps Washington sway decisions to its benefits. The U.S, therefore, exploits the fund to lure the borrowing country into a debt trap and thereby makes it as its lackey. Such entrapment helps U.S advance her imperialist agenda and meet her global interests. This can be plainly grasped in our relations with the fund, whose pockets are generous to us when we serve the interests of the U.S as it happened after 9/11 and penny-pinching otherwise.

The undue clout of Washington on IMF has raised many questions on its credibility.  Rightly did Lord Keynes describe the views of America on the future of IMF. He wrote in 1944, before Bretton Wood Conference. “In their eyes, the fund should have wide discretionary and policing powers and should exercise something of the same measure of the grandmotherly influence and control over the central banks of the member countries, that these central banks, in turn, are accustomed to exercise control over the other banks of their own countries”… this is how the game to control the economy of the borrowing country is played by U.S in cahoots with IMF.

It seems that China too is following the footprints of IMF. It is employing the same tactics to create its global hegemony as that of the U.S. by using its heavy influence on IMF. It has been keenly observed by political cognoscenti and leading defense analysts that China is colonizing smaller countries by lending them massive amounts of money that they can never repay. The country is accused of leveraging massive loans it holds over small states worldwide to snatch their assets and increase its military footprints.

Developing countries from Pakistan to Djibouti, the Maldives to Fiji all owe huge amounts to China. There are examples of many defaulters being pressured into surrendering control of their assets or allowing military basis on their land. This move of China is being dubbed by its detractors as “debt-trap diplomacy” or debt colonialism- offering enticing loans to countries unable to repay and then demanding concessions when they default. Sri Lanka provided a prime example of last year.

Owing more than $1 billion in debts to China, Sri Lanka was forced to hand over Hambantota port to the companies owned by the Chinese government on a 99 years lease. And Djibouti, home to US military base in Africa, also looks likely to cede control of a port terminal to a Beijing-linked firm. Apart, America is eager to stop the Doraleh container terminal falling into Chinese hands, particularly because it sits next to China’s only overseas military base.

While commenting on the Chinese debt- trap diplomacy, Rex Tillerson said” Bejing encouraged “dependency using opaque contracts, predatory loan practices, and corrupt deals that mire nations in debt and undercut their sovereignty”.

Additionally, China’s debt empire has also been rearing its head in the Pacific, prompting fears the country intends to leverage the debt to expand its military footprint into south pacific. Beijing’s creation of man-made islands in the disputed South China Sea for use as military bases suggests the concern may be warranted.

Another case worth mentioning here is of Tonga. It also carries some big debts and is struggling hard for the repayment. Tonga’s Prime Minister, Akilisi Pohvia voiced his concerns saying that Beijing was planning to seize assets from his country. Inter alia, a report from the Center for Global Development offers some insight into spreading China debt. It depicts that the infrastructure project loans to the likes of Magnolia, Montenegro, and Laos have resulted in millions or even billions in debts, which often account for huge percentages of countries’ GDPs.

Many of these projects are linked to the belt and road initiative- a bold project to create trade routes through the swathes of Eurasia, with China at the center. Mahathir Mohammad, the Malaysian Prime Minister while talking to press expressed his reservations about Chinese investment in the following words” We welcome foreign direct investment from anywhere certainly from China. But when it involves giving contracts to China, borrowing huge sums of money from China- and Chinese contractors prefer to use their own workers from China, use everything imported from China even payment is made in China. So we gain nothing at all”.

Therefore, Pakistan in dealing with both IMF and China must remain cautious so that it might neither fall prey to Chinese debt peonage nor to IMF’s debt trap. It may not be possible in case of IMF because a beggar cannot be a chooser while in case of engagement with China, we need to maintain caution and outline our own rules of engagement based on monitoring, evaluating, and allowing discussions to weigh the pros and cons of each and every development project.

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