Re: Capitalizing on the earthquake
I am not too sure that it won’t have any economic impact over the short and long term. No doubt, a speedy rehabilitation and reconstruction drive is needed. But, the sixty-four thousand dollars question is where and how the funds will be generated. Pakistan just does not have enough foreign exchange reserves to import construction machinery and other equipment needed. Domestically, if the production capacity isn’t increased for construction commodities such as cement and steel, it will directly boost the cost of these items by manifold.
One solution is to remove all trade barriers with India and China ASAP, and allow free movement of goods and commodities to keep inflation in check. Raise funds aggressively through international donors and UN to kick the recovery process in high gears, and this will provide a jump-start to overall recovery and job creation. Unless the catalyst is prepared and put in place through prudent planning, it will bound to have an adverse effect on the economy.