The World Bank is forecasting an “anemic” economic outlook for Pakistan, with an expected growth rate of only 0.5% in the current fiscal year. “Given anemic growth projections in the near term, poverty is expected to worsen with government estimates of pandemic job losses at 14 million, as poverty is expected to increase for the first time in two decades.”
So what could Pakistan do, to reverse the 14 million lost incomes? A recent study has shown that countries need to accelerate growth by using Global Value Chains (GVC). Almost nothing has been proven better to raise incomes and reduce the Pakistan poverty, with very little to zero government involvement or costs.
Pakistan’s economic outlook remains very fragile for at least the next two years, as Covid-19 has caused serious damage to their economy.
Lock-down measures have significant impact on poverty and the Pakistan economy is slowly expected to recover. “The news is not good and the outlook is dire for South Asia,” World Bank Chief Economist for South Asia region Hans Timmer said.
If small and medium sized companies utilize a B2B like system for global export, this could and should greatly increase company income and profit levels even during a pandemic.
For Pakistan, possibly the most important acceleration according to studies is providing a truly global value chain (GVC) – one example is ShopTheGlobe – as GVC raises both incomes while reducing poverty. The facts are that when countries like Pakistan use and or expand their GVC, they utilize the country’s comparative advantage (very cheap and unlimited labor), and they can achieve market improvements.
“The collapse of South Asian economies during Covid-19 has been more brutal than anticipated, worst of all for small businesses and informal workers who suffer sudden job losses and vanishing wages,” World Bank Vice President for South Asia Region Hartwig Schafe said.
Pakistan’s small companies and government policies now need to focus on expanding and accelerating their GVC while coming out of Covid-19; company-wide integration should magnify their gains and profits.
Knowing that Pakistan already has GVC accelerators, these companies could significantly expand export trade, as it is designed to present their local products globally. These type of economic improvements could accelerate companies especially those with strong global export potential.
Pakistan needs to increase its economy and business, and providing more global free trade, especially for its small and mid sized manufacturers, by accelerating a GVC such as ShopTheGlobe could greatly expand global product adoption.