Winning The Peace: India Shows Economic Commonsense

Winning The Peace: India Shows Economic Commonsense

The world has admired the Modi government’s handling of the Wuhan Virus threat. A near prompt national lockdown of over three weeks has limited the number of those infected to a few thousand, and those killed by the virus to under 300 at this point. Had we not done this, a recent statistical analysis by the Union Health Ministry states that we may have had 8.2 lakh infected by April 15^th , with a proportionately high death count.

The war against the Wuhan Virus is far from over even now, and it will be, perhaps only by the end of 2020, that we will gain perspective on how well we eventually did.

India seems to have made a terrific, unmatched start,however, given our gargantuan population of over 1.3 billion. But as the saying goes- it is equally important to win the peace. And preparations for doing so cannot wait till the end of the war.

Estimates from various international rating agencies have indicated the GDP  will plummet to as low as 1.6% as a consequence of this three week plus lockdown. In November 2019, nobody though India would turn in less than 5.5% despite various economic headwinds.

Had this lockdown gone forward without dilution, the moot point is how many multiples in casualties would the economic consequences have produced in the bargain? Fortunately, the Prime Minister, after widespread consultations with chief ministers of the various states, opposition leaders, doctors, economists, administrators, NGOs and so on, has decided to change course post April 14^th .That is when this momentous exercise ends in its present form. His revised mantra now, just revealed yesterday,  is Jaan Bhi, Jahan Bhi, which means equal emphasis on Life as well as Livelihood.

The union council of ministers have been asked to operate from their offices from the 13th of April, and no longer from their residences. Other measures are about to be announced in the next couple of days.

Hereafter, the hotspots, sometimes small areas, and otherwise entire districts, will be tightly regulated. Simultaneously, the work to revive the economy will commence in other parts, throughout the country. If new hotspots erupt, they too will be strictly quarantined. But the rest of the country will be allowed to take up where it left off gradually, with a set of social distancing precautions and compulsory use of face masks. Frequent hand-washing, sanitising of work places,  testing, and other prophylactic measures will be diligently followed. National transportation and movement guidelines are also expected to be announced shortly.

In terms of fixing global responsibility for the situation, which is much worse in Europe and America, Communist China and a collaborative WHO under its present Director General, are being squarely blamed.  It is negligence, deliberate suppression of information, and misguidance on their part, in the early stages, that ended up infecting so many around the world.

China knew about the virulent outbreak in Wuhan and its easy contagion as early as October 2019, perhaps even earlier. There is some question on whether it was caused by exotic animals being sold at Wet Markets, or that it was leaked, either inadvertently or deliberately, from a bio-warfare laboratory in Wuhan.

The hypothesis that it was a laboratory developed virus deliberately leaked, gains traction because the Chinese outside Wuhan were, and are, not at all affected. Perhaps the Chinese themselves, particularly its unaffected leadership, have an antidote or vaccine too which might be revealed at a time that suits it.

But, in the secretive early days of  the Wuhan Virus proliferation, China placed no restrictions on lakhs of  its people travelling internationally, right up to beyond the Chinese new year, which fell this year at the end of January 2020.

China signed a trade agreement with the US in January 2020 after negotiating it through December 2019, before the news on the Wuhan Virus was made public. And there is speculation that this may have been a key reason to postpone the announcements, on its existence and infectiousness.

The subsequent plight of the world and its sufferings owe much to being quite unprepared or forewarned. This is all the more galling because China is back to business as usual now, even as all of Europe, America, much of South America, West Asia, the Subcontinent, Japan and the Asia-Pacific, are still reeling from its effects.

The consequences to the economies around the world have been no less than catastrophic , ravaging entire regions; but again the Chinese economy is almost untouched except for lack of demand both at home and abroad.

While the world will be struggling to find ways and means to punish China once it finds its feet; Japan has already determined to move some of its manufacturing out of China. It has allocated $2.2 billion to help in this endeavour.

But, before India assumes it will be the automatic benefactor of companies, including American companies, moving manufacturing operations out of China, it has to show a modicum of economic commonsense. Having done that, it must make itself attractive enough.

The easing of the lockdown is a first and essential step in this direction, even as matching Chinese terms of business will not be easy. People and companies may still move out of China because of strategic reasons, but they could as well go to a more malleable Vietnam. This even though it is placed dangerously close to the South China Sea, the dragon’s own backyard.

The easing of the lockdown before the Indian economy is completely ruined and an ILO estimated 400 million of its workers from the unorganised sector are driven into penury, has come not a moment too soon. But this is just a first step. On the back of an expected shallow recovery, India may have to bite the bullet on stalled major economic reforms, what have often been called Stage II Reforms, involving contentious labour and land laws, to make itself an attractive investment destination. One that can finally be compared with China, if developed infrastructure is added to the mix.

Meanwhile, China is not only on a powerful PR offensive, it will fight to keep its business intact and has huge resources to deploy. China flatly refuses to accept any responsibility or liability for the devastation caused by the Wuhan Virus. It even casts doubt as to its origins, blaming American soldiers who visited Wuhan.

Meanwhile, if India did not decide to get back in the reckoning by over-focussing on the Yuhan Virus at the expense of all else, there would be little left to discuss.

The famous Chinese treatise The Art of War states that the best victory is when it is achieved without having to go to actual battle. Why use arms, China might be saying to itself, when a convenient laboratory/wet market developed virus does just as well?

The world has been infected by frequent  zoonotic infections from China over the last few years, including Bird Flu, SARS, Swine Flu, and now  the Yuhan Virus. Earlier, there was the Asian Flu of 1957 and the Hong Kong Flu of 1968.

There is every reason to assume that the world may have entered the era of bio and cyber warfare on the one hand, where arsenals in the hands of the Western powers too are nothing to sniff at. And these zoonotic epidemics that occur innocently enough from Chinese food habits, and the density of its  1.4 billion rural and urban population.

We can therefore expect many more pandemics and cyber-hackings in future. China  also stands accused of snooping on the world’s sensitive information via its cyber-hacking experts for more than a decade already. It is said to have the capacity to alter or immobilise the electronic controls of the world’s armaments, nuclear weapons and civil transport. The implications of this is horrifying, and much work is being done to negate  such possibilities.

Will India have vaccines and medicines for  all future pandemics at a minimum? It is comforting to learn that India does manufacture a large number of the world’s vaccines and life saving drugs, including the much in demand HCQ.  So we might indeed be able to fight new scourges as they come, despite low spends on healthcare, but is seems unlikely that we will be ready for them all.

So, just as in conventional warfare, we will have to survive for another day economically, while fighting the threat of the day simultaneously. The advantages of a large and young population must be leveraged.

It may be too much to expect unity amongst all those countries affected, though some degree of cooperation cannot be ruled out. But, in the end, India may have to go it alone, more often than not, and develop the capacity to do so as and when necessary.

This more so at a time when many are wondering about the pros and cons of a globalised economy, versus the sovereignty and greater certainty of individual nations.

(1,487 words)

April 12, 2020

For: WIONEWS

Gautam Mukherjee