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Control Covid for economy to recover!

By Naushad Forbes
October 15, 2020 09:54 IST
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Unless we control the coronavirus, we are going to struggle to get our economy and country back on track.
The spectre of the virus haunts recovery, warns Naushad Forbes.

Illustration: Dominic Xavier/Rediff.com

'Unprecedented' is an over-used word -- but it applies perfectly today.

We are living through an unprecedented health crisis, with 30 million Covid infections and one million deaths.

We are learning, but still do not definitively understand its spread, seriousness, and treatment.

India is now at the centre of this crisis -- with more than seven million cases, and the fastest growth rate. Let me be blunt.

With fresh daily infections of 100,000 and deaths at 1,200, and both rising, we are competing actively with the United States to be the worst-hit country in the world.

We face an unprecedented economic crisis -- as governments shut down the economy to try to halt the spread of the virus. World gross domestic product is expected to fall between 5 and 10 per cent this year.

 

India's GDP dropped by 24 per cent in the first quarter, the largest drop in our history and the biggest drop in the world.

Talk of a recovery is valid only relative to a shut-down economy of April and May.

June, July, August and September performance have varied by sector: Pharmaceuticals, chemicals, food and beverage, tractors and two-wheelers are back at last year's level.

Construction, real estate, travel and tourism, retail and fashion languish at levels below half of last year.

Capital goods show their 20th successive monthly decline, reflecting a complete slump in investment.

The consensus now points to a GDP drop in 2020-2021 of 10 to 15 per cent. This will set our development back by three years -- so the prime minister's $5-trillion-by-2024 goal will now have to be abandoned.

All this adds up to the most painful and stressful period in memory.

Unless we control the coronavirus, we are going to struggle to get our economy and country back on track.

The spectre of the virus haunts recovery. Travel and tourism is most directly affected, both major employment sectors. But so is retail.

In Singapore, which now has the virus in control, shopping mall footfalls are back to 65 per cent of last year's level with sales at 75 per cent -- the shortfall reflects an absence of tourists.

Our shopping malls report footfalls at 25 per cent of last year's number in September, and sales at 35 per cent. People are understandably afraid to enter malls.

The Chinese economy has bounced back after controlling the virus and is now expected to show some modest growth this year. Most countries have had some success in controlling the spread of the virus, or seen the curve flatten.

India's rise in infections has been inexorable.

So our immediate challenge is health.

Here's our problem. In late March, with just 600 cases of Covid infections in the country, we initiated the world's most stringent lockdown. Strong communication then associated controlling the virus with a strict lockdown in everyone's mind.

Today, we have over seven million cases and the fastest spread of infection in the world.

We are simultaneously opening up and easing restrictions on movement and activities.

I agree with this opening up. With 20:20 hindsight, the lockdowns were too draconian for a country like ours with such a large informal sector and no social safety net. So we must ease the restrictions.

But we must communicate that we are opening up to restore economic activity because we went too far, implemented the lockdown badly, and have no choice.

And warn people that the virus is spreading faster and is as dangerous as before. Instead, we are hardly communicating anything.

So what must be done? I am in none of those professions -- immunologists, virologists, epidemiologists, seriologists, mathematicians -- that understand what's going on. I hope, instead, to kindle some debate on what we should be doing.

Let me offer five suggestions as a citizen deeply troubled by the long-term damage this crisis is doing to our national prospects.

First, take it seriously -- this must be seen in what our leaders say -- at the national, state and city level. When the health crisis is at a new peak each day, the silence is deafening. Let's start by acknowledging the problem.

Let the data speak, using international metrics of seven-day rolling averages of fresh infections and mortality to tell us how we are doing, both in absolute terms and per million population.

Second, learn from the best experiences in controlling the virus internationally -- Germany, Taiwan, Vietnam, Thailand, South Korea, Sri Lanka, Dharavi.

Avoid facile explanations -- the best democrats (Taiwan, South Korea, Sri Lanka, Kerala) have done as well as the best authoritarians.

The best countries with high population densities have done as well as those with low. Taiwan (500 cases and just 7 deaths), Vietnam (1,100 cases, 35 deaths), South Korea (23,000 cases, 400 deaths) and Sri Lanka (3,300 cases, 13 deaths) have done an exceptional job of controlling the virus.

South Korea and Taiwan have twice the population density of India. Vietnam and Sri Lanka are not very different to India in population density and wealth.

Third, rely on science and expertise. Withdraw the Disaster Management Act -- it has proved ineffective in delivering anything except harassment.

Rely on our many good scientists and doctors, those practising on the ground rather than in administration. Let them set policy direction, which politicians and bureaucrats implement, instead of the other way around.

In the three months to June, the Union government issued 270 separate Covid directives, roughly three each day. State governments between them issued another 370 directives.

Some of these directives were even well-meaning, but with what effect? Many were to undo the confusion a previous directive had caused.

Let science and expertise coordinate what we do, not bureaucrats. And learn from what Taiwan, Sri Lanka and Kerala have done in using science and communication to control spread and mortality.

Fourth, work collaboratively between the Centre, state, and city. Can we suspend politics in matters relating to handling the virus? Covid reminds us how inter-connected we are -- and therefore how important it is we design policy together.

And then let's communicate, communicate, communicate. We must remind people constantly that this virus has to be controlled and dealt with.

Fifth, can we as citizens take the lead? We are not a particularly disciplined country (think of how we drive, think of our Parliament), but to halt Covid, we need self-discipline to keep ourselves and our families safe.

My own city, Pune, has the very dubious distinction of having the highest infection rate in the last two months of any city in the world, adding around 4,000 cases each day.

Let's ensure that we and everyone around us, in our place of work, in our housing societies, follow strict principles of social distancing, wearing masks, and hand-washing.

Let's require that every shop we enter has social distancing being visibly, simply and rigorously followed. We should refuse to enter any enclosed space if even one person is not wearing a mask.

People think a fatality ratio of 2 per cent is a small number, but that means we are seeing 70 to 90 extra deaths in Pune district each day over the last two months. That's around 30 per cent more than usual, an unacceptable number. We have to turn this around.

The key to a lower mortality rate is early identification of cases -- so plentiful testing and tracing giving us a test positive ratio under 5 per cent is key.

And then followed by close monitoring at home of progression, and ensuring that care levels, including hospitalisation, are stepped up as needed.

This requires a coordinated effort between the city health authorities, doctors and hospitals. And the coordination must be among equals -- devoid of the bullying and counterproductive edicts we have seen issued with such regularity.

If we do all this, can we control the virus today given how rampant it is? I don't know. Perhaps it is already too late. But we need to hear from those who understand what it would take.

Communication is critical -- with a single message to avoid confusion. We cannot have life-as-usual, business-as-usual, or a vibrant economy till Covid is in control.

Let's get real.

Naushad Forbes is co-chairman, Forbes Marshall, past president CII, chairman of Centre for Technology Innovation and Economic Research and Ananta Aspen Centre.

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