Global Editions

A different world

Abu Sirkhel
With digitization at the forefront of global economic reshuffling as the covid-19 pandemic rages on what will economies of the future look like?
by Kunwar Khuldune Shahid

Una incision de 15 centimetros entre la sexta y septima costilla” [(Make) an incision 15 centimeters between the sixth and seventh rib] Pakistan-based Dr Ahmed tells Tokyo during the opening episode of the fourth season of La Casa de Papel or Money Heist. The doctor is passing on instructions for Nairobi’s surgery, making telemedicine the second service that the gang in Madrid employs remotely from Pakistan.

Nairobi’s surgery is one of the most enthralling sequences of the fourth season of Money Heist, which premiered on April 3, amidst global lockdowns in light of the covid-19 outbreak. And while telesurgery or hacking skills being deployed for a robbery, isn’t exactly the ideal billing for it, the use of technology has been increasingly touted as an inevitable route for the revamp of the global economy reeling under the impact of the covid-19 pandemic.

Tech calling

The calls for the use of technology have been increasingly reverberating in Pakistan. Senior government officials ranging from Foreign Minister Shah Mehmood Qureshi to Federal Minister for Science & Technology Fawad Chaudhry have rooted for technology to be implemented to run government affairs, including the National Assembly sessions.

An international research report launched by Telenor underlines that covid-19 has fast-tracked technological and fiscal changes, which will permanently redefine the functioning of global economies and societies. The report maintains that the pandemic has heralded a ‘new way to work’ and ushered in an overwhelming usage of artificial intelligence in recruitment.

According to the World Bank report ‘Digital Pakistan: A Business and Trade Assessment’ embracing information technology will enhance Pakistan’s export competitiveness. The report, again, underlined that AI and IT-enabled services will be critical for the country’s financial uplift.

No snapping back

Looking into the usage of technology to reshape the global economy, financial experts have underscored the need to first evaluate the greatest fiscal challenges that the world will face during, and in the aftermath of, the covid-19 pandemic. While the short-term impacts that coronavirus has had on economies is easier to predict, and are currently being lived, the long-term ramifications are harder to prognosticate.

Credit: World bank’s digital Pakistan: A business and trade assessment report

But they’re also more important to predict, according to economist Tim Harford, the author of Fifty Things That Made the Modern Economy. “Much depends on whether the virus becomes a severe endemic threat, or whether we cure, suppress or simply decide to accept it,” he tells MIT Technology Review Pakistan.

Harford agrees with the abovementioned studies underlining permanency in financial revamp, maintaining that the economy won’t snap back, like a rubber band, to where it was pre-coronavirus. He delineates financial ‘hysteresis’ to describe the expected impact on global economics, which, much like a sheet of plastic wrapping will not return to its original position, and instead stay stretched.

Financial analysts have almost reached consensus over an irreversible reshaping of work structure, where companies would look to seek employees from remote towns, or even countries, with the workforce no longer being required to move towards densely populated urban centres. This, coupled with the rise in the use of AI and robotics, could usher in the era of globotics and telemigrants.

Enter globotics

Richard Baldwin, former president of the Centre for Economic Policy Research, and author of The Globotics Upheaval : Globalization, Robotics, and the Future of Work predicted long before the coronavirus pandemic that technology will displace the traditional manufacturing-led development and replace it with an increasingly digitized and globalized economy.

Baldwin now argues that covid-19 will significantly enhance the pace of this transformation owing to a hike in unemployment, digital revamps, debt burdens and the now high costs of office space, which will increasingly be considered unnecessary with a fast growing percentage of the workforce working remotely.

Baldwin maintains that the ongoing job losses will reshape the employment criteria since a firm deciding to hire someone new uses a different line of thinking as compared to when it is retaining an existing employee. Furthermore, with massive downsizing, the physically vacant office spaces will be taken by ‘telemigrants’.

While predicting the rise of ‘white collar robots’, Baldwin further anticipates a rise in employment from low-income countries. Here those demonstrating an AI skill set from low-income countries, or presenting skills demanded in the developed countries, could be increasingly coveted. Could the role of such digitally skilled workers enhance in developing economies?

Employing telemigrants

“IT services are some of the most popular offshored jobs currently, but AI skills are not the bulk of it; mostly it is low skill things like call centres, back office things, or medium skills like copyediting, drafting, powerpoint design, etc,” Richard Baldwin says while talking to MIT Technology Review Pakistan.

According to The Globotics Upheaval a quarter of the global freelancers come from Pakistan and Bangladesh. The book also presents the case of Hathersage hiring engineers from Lahore to do its job efficiently and at a low cost.

Citing the successfully deployed youth from the Philippines over the past decade, Baldwin underlines that a ‘youthful, literate population, those with good communication skills’ are increasingly in demand the world over. Amidst the covid-19 pandemic, and the ensuing fiscal turmoil, many Pakistani youngsters that fit this description are increasingly being laid off.

Baldwin suggests that work that requires culture-specific knowledge would be hard to do for telemigrants. However, given the global consumption of western cultures – especially pop culture – could many overseas workers still be able to do such jobs, especially given the prodigious disparity in the wages they’ll be demanding?

“Yes, but within limits. Things like marketing require a deep understanding of consumer thinking which you can’t get from Hollywood movies!” Baldwin maintains.

Providing relief

While globotics, AI and telemigration open the doors for a portion of Pakistan’s tech-skilled workforce, there remains an overwhelming number of laborers that have been marred by the covid-19 lockdowns, and are expected to continue reeling from the aftershocks.

Since the coronavirus outbreak, Pakistan has requested relief from global organizations on humanitarian grounds. In April, the International Monetary Fund (IMF), which is currently overseeing Pakistan’s 13th bailout package, approved $1.386 billion for the country under the Rapid Financing Instrument. The IMF’s decision followed G-20 nations freezing debt repayments. In June, the Paris Club of creditor nations also suspended Pakistan’s debt service payments.

Despite having been given debt relief to ease the fiscal crises engulfing the lowest economic strata, the Pakistan government has been accused of failing to enact policies that cater to the segment most vulnerable to the impact of the covid-19 pandemic.

For many critics, the announcement of federal and provincial budgets for the Fiscal Year 2020-21 perfectly epitomized this, with many maintaining that the allocations ‘didn’t reflect a country battling a pandemic’.

Whither human?

Fawzia Naqvi, Former Vice President Soros Economic Development Fund and Cofounder Institute for Development and Economic Alternatives (IDEAS), condemns the government for many of the decisions that it has taken over the budget. If the government has been provided fiscal space by donors and international organizations, how is that reflected in the government’s economic policy to fight the pandemic, she questions.

According to Naqvi, the government needs to focus its energy on expanding social welfare programs like the Benazir Income Support Programme and the Ehsaan Programme, instead of bailing out the private sector. She further maintains that technology, digitization and e-commerce need to come to the aid of the poorest sections of the society.

“Much more imaginative ways need to be brought in to expand [the social welfare programs]. This is where technology comes in: you can use data and e-commerce. The one thing Pakistan has is a lot of young people who know how to use technology,” Naqvi adds.

Where the government has come under criticism for its budget allocation, the financial representatives maintain that in addition to the needed relief package to fight covid-19, their focus has been on facilitating the private sector, which in turn will provide employment opportunities and ensure the uptick of the economy. Government officials maintain that while the pandemic has proven to be damaging for the entire world, for Pakistan there is a window of opportunity as well.

Open window

Salman Shah, the economic advisor to Pakistan Tehreek-e-Insaf (PTI) government and a former caretaker finance minister, says that Pakistan will initially suffer because of the disruption of the global economy. However, he says what will work in Pakistan’s favor is the resulting diversification of the global economy. This offers an opportunity for the country’s tech savvy youth, and local businesses, with unprecedented globalization and connectivity providing Pakistan an edge owing to its population.

“The predominant reliance on China will reduce [in the aftermath of the covid-19] pandemic, which can benefit countries like Pakistan, which has a large population, with a high percentage of youth. The country can become a focus of global production,” Shah tells MIT Technology Review Pakistan.

Shah believes that the large population in Pakistan, especially those being rendered unemployed owing to the aftereffects of the covid-19 pandemic, can do a lot for import substitution. He says that owing to trade disruptions imports will be impacted, which Pakistan should look to make on its own, thereby offering an opportunity to local businesses.

Shah cites the example of the health sector, with the country making masks and other safety gear for health practitioners. The financial advisor maintains that soon Pakistan will start producing more sophisticated medical gear, and equipment like ventilators.

It is evident that the government is echoing the global analysts’ claims of the covid-19 permanently transforming the world economy. The government has put the onus on individuals to market their skills to a growing number of global employers looking for skilled labor working remotely, or to fill the fiscal vacuum with local businesses.

The only tool provided to the locals is the technology at their disposal. And while digitization will inevitably be at the forefront of the global economic reshuffle, as has been the case for generations, technology is reaffirming itself as both an abettor and competitor for humankind.

Credit: Sidra Imran and AFP

Kunwar Khuldune Shahid is a journalist based in Lahore.

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