CEOs & Key Managers of leading corporations dead, Inflation hits 500%, Unemployment hits record high and Production hits record low. FOOD RIOTS BEGIN.
>>Are we prepared for such an ECONOMIC PANDEMIC?<<
By Dr. Arindam Chaudhuri
This is exactly what me and my friend A Sandeep had written in 2005 (http://www.businessandeconomy.org/20102005/default.asp -pg 2 of the article depicts exactly scenario)
about the consequences of a possible pandemic then:
*The economic pandemic could be worse*
A scenario like this could well unfold across the world.
Kumarmangalam Birla, Bill Gates.. Richard Branson.. to name just a few, cancel their long planned trips to the Asia Pacific region as all flights have been suspended and countries close down borders. Key managers at plants of GM, Nike, Nokia and GE die, with no one to replace them.
At the moment, this could well appear to be stuff churned out from fantasies. Yet, if the....pandemic does break out, the global economy could end up with a depression that would be worse than the Great Depression of 1920s and 1930s. That may well seem rhetoric, but it would be revealing to see what exactly happened to the global economy during the Great Depression:
During the 1920s Germany witnessed hyper inflation averaging 1800%. And then came the great global crash. Prices of consumer durables fell 25%, 30%, 30%, and 40% in UK, Germany, US and France respectively from 1929 to 1933. These were the four largest economies in the world at that time. Yet, there were no takers for consumer goods.
Consequently, unemployment soared – in the United States it peaked at 24.9% in 1933 and remained above 20% for two more years. The story was similar throughout the world.
World economic output continued to decline until 1932, when it touched rock bottom at 50% of its 1929 level. Global industrial production declined by 36% between 1929 and 1932.
Between 1929 and 1932, US exports to Europe declined from $2.3 billion to $770 million and US imports declined from $1.3 billion to $390 million. Global trade crashed during the same period by a whopping 66%.
Production at GM, the leading automobile manufacturer, declined by 50%.Could anything be worse than this? Yes! Compared to those long gone years, the world is far more globalised and is a much more interdependent village than it was ever before in history. Virtually no corner of the world will be spared ....
If not for the charitable sake of saving human lives, perhaps the capitalists of the world could unite to save the ‘profitable’ cause of their wealth. They have nothing else to lose, but their profits.
_____________________________________________
As the scenario we had described 15 years back, nears reality, we need to seriously think. We need to seriously think if the Corona pandemic and it's eventualities are worse or the eventualities of an Economic pandemic worse.
I wrote my fears about blindly following Europe and China and locking down India just one day before PM announced the lockdown:
LET'S NOT MAKE INDIA ONE HUGE MORGUE.
Also carried by EDGE MEDIA http://theedgemedia.in/lets-not-make-india-one-huge-morgue/
And I wrote this open letter to our PM the day the lockdown was announced:
AN OPEN LETTER TO OUR PM
I want to again reiterate what I wrote before we entered lockdown (and TWO DAYS later read that WHO Director as well as Raghuram Rajan spoke on same lines)
India is not China or Italy. We need to have new ideas wrt Coronavirus to save POOR from DYING HUNGRY and SAVE BUSINESSES from shutting down. The current package announced by the government is a good step but far far more needs to be done to make a lockdown successful without ruining the economy, and that might not be possible.
The virus scientists are clearly predicting, won't disappear. China has been successful through lockdown.. but can tomorrow have a new outbreak in a different region. The story isn't over yet. We after all need just one person with infection to create a similar situation in three weeks. And how do we make sure it won't happen after we emerge out of the lockdown and start working. And if that happens do we go on a lockdown again?? China can succeed still due to its dictatorial system and complete tracking of every individual. It can't replicated in West. And definitely not in India.
Every nation around the world is estimating 60-70% of it's total population will get affected by the virus. Which means in our case 100 crores /1 billion people might get affected. Yes that's the scary possibility. And at a conservative figure of about 5% deaths (given ts 10% plus in Italy and 4% in China, both with far better health facilities) we can expect 50 million deaths maybe within the next 12 months in India alone. In my 2005 article I had used exactly this figure on the cover. 50 million dead.
No this might not happen. And I hope it won't happen. And I have reasons to hope.
The fact that the continent of Africa despite the huge Chinese business interest there and the huge Chinese population and AfroChinese new generation, has remained relatively less affected (strangely no one seems to be writing about it) by the virus does give me a hope that maybe (remember no research had proven this) heat and humidity will make the spread of this virus less effective in certain regions and India could possibly fall into that category. But on such an unresearched hope we can't pin all our hopes.
Assuming that we indeed get affected like other countries are getting, India will necessarily have to find out a completely new way out. Specially given that the entire world isn't going together at the same time on a zero tolerance 3 month global quarantine with respectable social security for everyone.
The answer is simple. We are a poor country. If we get affected to the same extent as USA/China or Europe, then what will happen will be beyond what the world can fathom or has possibility seen ever in the last hundred years and more.
Our medical facilities are inadequate even to serve the normal needs forget handle a four to eight fold increase in deaths in a year. And the spread here will be unlike it has been anywhere in the world.
Because of extreme poverty and 50-70% of most city dwellers living in slums, the spread will be faster and the multiplier far more than 2.6 times. We have families of 4-8 living in one room. They have no access to hygiene. For them sanitizers and soaps are a luxury.
In their case average age of those dying will not be 65 plus but 45 plus given they hardly live to see 65. Most in any case have existing health issues and therefore the percentage can be more than Italy's 10%.
The deaths in India could be 25-50 million in 18-24 months till vaccines are available for common public. Yes sir, that's the possibility that doctors and scientists are predicting and I am sure you have all the research and data. Weather.com four days back did an article where it states
>>>>>Dr. Ramanan Laxminarayan, director of the US-based Centre for Disease Dynamics, Economics and Policy, and an advisor to the World Health Organisation (WHO) and World Bank, had previously warned India that in its worst-case scenario, 60% of its total population (80 crore out of the 135 crore population) would get infected with the deadly virus. But now, in view of the lockdown measures and countrywide curfews that were recently enforced by the Indian government, that worst-case number has since been revised to 20%. Furthermore, an overwhelming majority of these infections are likely to be “extremely mild”, says Dr. Laxminarayan<<<<<<
From 1.5 days to climb from 4 lac to 5 lac, it will be two lac in a day in the next week and then in two weeks we could see a million a day, eventually inflicting about 2.5 billion people globally in a matter of months.
>>>>California governor two days back predicted that in California alone they expect 25 million infected people in next 8 weeks. Yes sir. Next 8 weeks only.<<<<<<
>>>> So we will have FASTER SPREAD, HIGHER % of DEATHS and YOUNGER people dying. <<<<<
And of course add to that our lack of education that prohibits men specially to easily to accept new rules of hygiene etc.
We have to realize if we really get affected we will have the poor of this country affected like never before. Crematoriums won't be able to manage so many deaths. Dead bodies in every other poor home will spreaf more illness. Even the rich will not be spared, because till it's too evident the poor will hide their illness and come to work at our homes. In any case the virus mostly takes two days and more to show symptoms so even when they look healthy they could be carrying the virus.
We are copying ideas from developed countries to stop the spread of Coronavirus and unfortunately we are exceedingly late.
And though I do believe theoretically if the entire world went on a common three month entire Earth lockdown with dignified social security for all, we might have been able to finish the virus and come out alive.. and though I believe that a temporary lockdown is great to prepare our health system and get it ready for the challenges ahead
(as I suggested in my open letter, we must call the army out and prepare emergency facilities for treatment of people in stadiums in every district of India); I don't believe lockdown is the solution that will work in India practically.
We can't afford lockdowns because our poor who are already living at destitution levels will not be able to live without their daily wages and we are seeing videos of the them going hungry already. They will die of hunger (unless they already are) and malnutrition before they die of Coronavirus. Secondly our governments isn't yet willing to -and perhaps doesn't haven't enough resources- transfer minimum wages to their bank accounts to help them live. And finally even our small and medium businesses won't be able to take the huge jolt.
This is despite the measures the government has been taking. They are good but far too less.
We have amongst the world's worst social security and social health system. We are looking at doom if we are to blindly copy developed countries beyond one point. Even Japan and Sweden haven't locked down despite their high in social security egalitarian systems.
So what do we need to do? (Apart from identifying those infected and isolating them and keeping a tight vigil on those they might have come in touch with)
>>>>>1. We have to have a campaign which has been unseen in India's history, raising awareness about mandatory isolation of those with existing health conditions and those above a certain age like 60.
>>>>>2. In slums and places where big families stay in one room we have to start emergency social quarantine facilities in the nearest school buildings so that people can mandatorily shift the elders from their homes to these facilities.
For all others where they have extra rooms in their homes, it has to be mandatory self quarantine for those at high risk.
>>>>>3. We need to make sure that soaps and sanitizers are available in plenty and companies must be aided to start it's production overnight and people must be explained that they can't touch their mouth, eyes or nose even once without cleaning their hands. The poor most be provided at lowest possible cost and even free if required.
We need to make sure large scale government backed production of ventilators begins immediately. On war footing.
>>>>>4. We must have a minimum money transferred to the accounts of those quarantined so that they can meet their living expenses.
>>>>>5. We must give businesses tax breaks and banks must give special moratoriums on loans of at least 6 months to all, so that they can cope up with this emergency situation.
>>>>>6. We must explain people that like flu this will effect most of us without serious damage if we don't belong to the lot being quarantined. 0-9 age group has zero percent risk, 9-39 has only 0.2% risk and 39-49 has only 0.4% risk and this can go down with precautions.
So the fear and panic must be removed while the focus on hygiene is increased. We must explain that worldwide we have 2000 deaths daily from normal flu and from Coronavirus we are still at about 2100 and it can be reduced.
Those at highest risk (research in Italy clearly shows that 99% of those dying had previous health issues) should be self quarantined at home or in emergency quarantine facilities set up in their localities.
>>>>>7. By following this, we might bring the deaths from Coronavirus down to the lowest in the world because those out in the open and contracting it would be healthy people - only the 85% who are not likely to die. Often they wont even come to know they got the virus. So they will get it and recover like they do from normal flu.
>>>>>8. Govt must learn from case studies of Germany and South Korea where they have miraculously kept down the death rate to 0.5% to 1%. The lesson (other than exceptional existing social security based health care system) is to start mass scale testing. If we can catch at the early stage. We can save lives.
At the end of the day we need to realize this virus is here to stay and we can't remain indoors. We have to face it. I reiterate, scientists are clear that we need to accept, Coronavirus is here to stay. Forever. In all likelihood. It will infect hundred percent of the world population in the next two to three years and kill a massive percentage of old people specially those with existing health conditions till the vaccine comes out.
The only cure will be to safeguard them and keep their environment sanitized till we discover a vaccine.
But remember! It will keep mutating and coming back with different strains every year so the vaccinations will need to be taken every year. Just because from normal flu the chances of death is 0.1% we don't take it seriously and unfortunately don't get vaccinated every year; though flu kills about 0.5 million people a year globally. Hopefully Corona will teach us two things. One not to touch our faces without sanitising our hands and two, to take annual vaccinations. Necessarily.
AND WE WILL SAVE THE ECONOMY FROM GETTING RUINED AND MILLIONS FROM DYING A FEW YEARS TOO EARLY.
And with the hope that medicines and vaccinations will be developed soon, I am sure this situation won't last too long. It's just a 6 month to 18 month inconvenience that we can conquer with commitment and intelligence. In fact researches have already shown a couple of medicines to be working well. I can't write those names here because then idiots will line up to stock them at home.
And most likely no lockdown like the ones we have will stop it. I repeat, let's use these three weeks to make massive army driven health care facilities. In every district of India.
And plan how to save India from an Economic Pandemic - which could have far worse consequences.
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