The undocumented

Pakistan’s undocumented economy has always been a major reason behind its many problems, ranging from fiscal and current account deficits to inflation and poverty to high unemployment rates to being placed on the grey list by the FATF.

Now, as the global economy is hit hard by a pandemic, new implications of this informal economy are unraveling. An unregulated donation distribution system, in the wake of the current virus outbreak, is hindering the government and civil society’s agenda of saving the poor from virus and hunger at the same time.

The government has allocated Rs144 billion as a corona relief fund. People have also distributed ration generously on their own. Lack of coordination among people in a region and between the civil society and the government has led to a scenario where many are confessing that they got groceries far beyond their needs. Meanwhile, it can’t be denied that there will be many white-collared who have nothing in their pockets as well as in their kitchens.

At first a very simple solution comes to mind: people submit their donations into a government-created pool and the government can then distribute it evenly. But long-standing mistrust for government authorities and, in fact, the government's inability to respond expeditiously and efficiently to crisis situations will keep the majority from being part of government-led efforts. This trust deficit cannot be bridged overnight nor can the government become efficient immediately.

Consequently, there is a need for creating an individual-led, government-managed system for relief activities. Such a system will ensure that individuals hand over their donations to the needy themselves but the government keeps a track of who has received donations. The system and data required for the purpose is already in place to some extent in the form of the NADRA database, BISP, Ehsaas Programme and biometric SIM card verification.

This data can be used in various ways for uniform charity distribution and identification of more vulnerable families and zones all across the country. For example, the receiver could provide his/her phone number to the donor and the donor would send a code (as per amount of charity) and the receiver’s phone number to some stipulated number. After data check against the receiver's number, the receiver will receive a code from the system that would be sent by the donor to that government designated number to finish the process. A little effort by the government to develop such a system and by donors to use this system could be a way forward to tackle this situation much effectively.

Such joint ventures by the public and the government will help boost confidence and so people will act as agents of change rather than silent receivers or spectators. Such endeavors have a tinge of neo-liberal economics where nationals have a more active role to play for their respective nations and governments keep a track of resource flow to act as regulators.

Anyhow, in this case Corporate Social Responsibility (CSR) of the neo-liberal economic model transcends into Individual Social Responsibility. Such a system, once in place, will also help the Pakistani government take swift and calculated relief measures for flood-hit victims every year. This digital system can also be modified to incorporate the Zakat distribution system. A well-regulated charity distribution system will discourage professional beggars and alleviate poverty as envisaged for a welfare state.

Previously, manual handling of large data pertaining to the population must have been a hurdle in the way of documenting the economy, taking appropriate policy measures and coordinating relief activities. In this age of technology, smart tech use can solve many problems at the micro as well as macro level, but ignoring this handy tool will be a folly. The IMF has already declared, the global economy is set to experience a severe downturn. So only organized and synchronized relief measures can cushion the impact of this crisis.

The writer is a freelance contributor.