Muhammad Zubair Shahid
Pakistan continues to hit by the adversities of COVID-19, that has jolted the economic foundation of country. People from all walk of life are affected by the deteriorating economic situation. The hue and cry has been raised by general public including employees, businesses and daily wagers against the inflation, unemployment and unavailability of basic commodities. Despite government claims of economic reforms, indicators are not depicting optimistic and promising future.
Tourism industry contributes almost 7.1% to the country’s GDP and during the current fiscal year this contribution will be probably 0%. Tourism is one of most affected sectors due to corona pandemic. Government has ordered to restore almost all sectors to continue economic activities but tourism is still not operational. The future of this industry is subject to uncertainty, may be until scientists find a cure for coronavirusand disease is eradicated. The domestic tourism industry is on the verge of collapse due to forced lockdowns, social distancing, staying at home and self-quarantine. Shopping malls, restaurants hotels, public places and public transport are not operational which has resulted spike in unemployment and poverty for daily wagers and employees working in the northern areas where local economy is based on tourism alone.
The general economic state of the country is passing through recessionary pressures, unemployment rate is all time high, local consumption has decreased significantly and exports have slipped by 6.5% vs last fiscal year. Small and medium enterprise are suffering from financial distress and most of firms have started taking initiative for reducing their operating costs using various methods, scaling down the operation, sacking the staff, cutting the staff salaries up to 50% and opting closure of operations. These initiatives brought serious threats to the job security for middle class, and disposable income has squeezed too, where it is less likely that people will be spending on luxuries. In current situation most of people are inclined towards saving funds and spending on necessities alone, rather than spending on luxuries such as taking a vacation.
In the prevailing crisis there is zero tourist footfall in the northern area. People are under heavy financial crisis. Hostels and rented properties have been closed and employees are made redundant. Recently Pakistan Tourism Development Corporation announced closure of all six motels in northern areas after incurring an accumulated loss of PKR-1 billion, all employees are made redundant and offered a golden handshake scheme of PKR-1.4 billion. 25 to 26 properties other than six properties of in the northern region of Pakistan.Employees have filed a case against the company and decision is pending in the court.
Despite announcement of Prime Minister Imran Khan government has not been able to give clear guide on the resumption of tourism industry. Whereas hotel and restaurant owners are demanding the government to restore tourism activities and compliance of SOPs should be made mandatory, so that economic activity can be resumed and people can fulfill their needs and earn bread and butter for their living. Considering the northern areas dependence on tourism, as special case government should announce a special economic relief package, Interest free loans, declaration of tax free zone, ensure adequate health facilities, ensure provision of food supplies and ensure the law and order situation is intact.
The Writer is a qualified accountant ACMA and CGMA from The Chartered Institute Of Management Accountants London UK.