Opening up economic production from a lockdown, even partially, when the COVID-19 pandemic has not peaked in the country poses an extraordinary challenge.
Countries around the world are focusing on making the workplace safe, and issuing guidelines to help workers return to their jobs.
Reducing the number of people present at any given time is a universal principle, either through resort to shifts, or arrangements to enable employees to work from home.
Legally permitted ceiling for staff attendance is now extended to 50% in specified sectors and even in some government offices.
At this stage of the pandemic, when a gradual resumption of economic activity in multiple sectors ranging from construction to food takeaways is a necessity, the most feasible interventions at the workplace are voluntary and those that cost the least.
There may still be occasion to resort to intermittent lockdowns if opening up leads to mounting cases.
A hole in the whole
The lockdown, as it was conceived originally, was meant to be, at best, a stopgap arrangement that would help nations tide over the crisis caused by the SARS-CoV-2 virus.
As sparse health-care resources in most parts of the country have been channelled towards the COVID-19 effort, the numbers have risen, but normal healthcare services have been in suspended animation for just under two months now.
As conditional movement has been allowed, people travelling across States bring positive cases to States or districts that have remained case-free for a while now.
Recent data culled from the National Health Mission pointed to less than normal coverage in key areas such as immunisation, institutional deliveries; further, delay, or failure, in delivering lifesaving drugs to persons with HIV, tuberculosis, or inability to offer support for other chronic conditions have been documented.
While the Finance Minister’s announcement on increase in health allocations as part of the ₹20-lakh crore relief package is welcome, more than money is required to set this right.
If life after COVID-19 is not to be worse than life before the pandemic, the governments need to ensure that the country’s multilayered health system is not sacrificed at the altar of one virus; they need to give it their whole attention, now.
How public health boosts an economy
Dire predictions for the post-COVID-19 global economy have come from the International Monetary Fund, which called the present crisis the worst downturn since the Great Depression.
Grim forebodings for the Indian economy have been sounded by many distinguished economists and the Governor of the Reserve Bank of India.
The ₹20 lakh crore package recently announced includes proposals to prevent and respond to future pandemics. These include strengthening of health and wellness centres, establishment of infectious diseases hospital blocks in all districts, expansion of the laboratory network and ‘One Health’ research on zoonotic diseases under the Indian Council of Medical Research (ICMR).
This is a limited response to the threat of infectious outbreaks.
The creation of a well-balanced health system is not the objective of this crisis response, despite the fact that the southern States have shown how efficient and equitable health systems are our best defence against public health emergencies.
It is also clear that weak health systems, which do not function well in a steady state, cannot suddenly generate surge capacity when challenged by a public health emergency.
Further, a selective investment in some components of infectious disease control will not meet the many other essential demands on the health system.
Even during the COVID-19 response, attention has been diverted from maternal and child health, and care for other infectious diseases and noncommunicable diseases.
Also, where will the additional health workforce needed even for this limited expansion come from, without a planned investment in education, skilling and employment?
What is needed is adequate investment in creating a health system that can withstand any kind of public health emergencies, deliver universal health coverage and other targets of the Sustainable Development Goals, while creating mutually beneficial synergies between health and the economy.
The Fifteenth Finance Commission is reportedly examining ways to increase public financing of the health sector, while framing its final recommendations.
Given the major role that States have to play in creating strong health systems across the country, the directions and allocations provided by the Finance Commission can become the critical catalyst for transforming the nation’s health.
Ambivalence of economists towards health dominated much of the 20th century.
Health systems were mostly seen as unavoidable expenditures.
The services rendered by public health are far too valuable to be dismissed as a cost disease.
The evidence-backed proposition that population health and national economic growth have a bi-directional relationship.
There is robust evidence that investments in public health and primary care pay rich economic dividends.
Apart from the WHO Commission on Macroeconomics and Health (2001), two other economists-led reports on Investing in Health (1993, 2013) concluded that investments in population health will yield rich returns of economic growth.
The 2013 report estimated that low- and middle-income countries will realise 9 to 20 fold returns respectively on investments in health.
A UN High Level Commission, headed by the Presidents of France and South Africa, reported in 2016 that investments for augmenting the size and skills of the health workforce yields economic growth through improved population health and productivity, reduced healthcare costs and job creation even in a gloomy global scenario of job loss.
India, in particular, stands to gain greatly by investing in health, especially health beyond illness care.
Productivity boost promised by a demographically young population can be protected.
Education and skilling of a diversified health workforce can uplift health services for health protection at both population and individual levels.
When domestic needs are met, this expanded health workforce can also meet global health needs, both as a rapid action force for health emergency response and as a unit taking care of the chronic care needs of aged societies.
Innovative health technologies and inexpensive pharmaceutical products can be created at scale, for domestic use and global export.
This calls for stepped up public financing for the health sector.
Questions may be posed as to how this can be done at a time of economic downturn.
History teaches us that such an investment is especially useful in times of economic adversity.
South-East Asian countries invested in health and universal health coverage during and soon after the Asian Financial Crisis of the 1990s.
The United Kingdom adopted universal health coverage soon after the Second World War.
Japan adopted it in the early 1960s to hasten recovery from the economic injuries inflicted by defeat in that war.
All of them recognised that greater investment in health is a winning bet for economic development.
India too must choose that path to boost the trajectory of its economic growth.
At the bottom of the Pandora ’s box lies hope.
Backing the ‘angels in white coats’
Never since the Second World War have we seen the size, scale and human impact of this lockdown.
Yet, we have managed and continue to manage the worst health and economic crisis we have seen in our lifetimes.
Indian hospitals and 60,000 nursing homes in the private sector have looked after 68% of Indian healthcare needs.
In the process, they have evolved into delivering world-class care and continue to attract patients from 145 countries.
Even more remarkably — we do it at 1/10th of international costs.
Around 1.4 million Indian doctors across the world and even more nurses are leading the fight against COVID-19.
The coronavirus is an imported virus and so are our PPEs, medicines and technology.
We need flexibility, resources and knowledge.
Uncomplicate our cost structure by zero-rating GST or exempt all services and goods that are supplied to the hospital.
Hospitals need liquidity.
Beyond bank borrowings, the government should set up a three-year fund that will enable sustainability of the sector and fortify the system from any such future outbreak and offer subvention of interest.
Incentivise healthcare institutions.
We are not here for just this fight alone — we are here for the future, a future where every Indian is unafraid because they are strong and protected by a vibrant healthcare system.
Grasping the defence self-reliance nettle
The measures, recently announced by the Finance Minister, to promote self-reliance in defence production.
For most of the past decade, India had the dubious distinction of being the world’s largest arms importer, accounting for about 12% of global arms imports.
____________ jumped to first place in 2018 and 2019, but India still takes over 9% of global imports.
This external dependence for weapons, spares and, in some cases, even ammunition creates vulnerabilities during military crises.
The facts that new Defence Procurement Procedures (DPP) 2020 are under formulation and that we now have a Chief of Defence Staff (CDS) tasked with promoting indigenous equipment in the armed forces, provide a conducive backdrop.
The decision to notify a list of weapons systems for sourcing entirely from Indian manufacturers, the promise to progressively expand this list.
A separate Budget provision for domestic capital procurement.
It will encourage our private defence manufacturers.
Over the past five years, the Indian government has approved over 200 defence acquisition proposals, valued at over ₹4 trillion, but most are still in relatively early stages of processing.
Of course, this delay now provides the opportunity to re-examine them and to prioritise those with indigenous research and development.
The decision to corporatise the Ordnance Factory Board is another long overdue reform.
The government has rightly clarified that self-reliance would not be taken to overzealous extremes.
The thrust for indigenous research anddevelopment will coexist with the import of cutting-edge military technologies to obviate near-term defence vulnerabilities.
It is also imperative that when we import weapon systems, we should plan for the ammunitions and spares for them to be eventually manufactured in India so that we are not driven to seek urgent replenishments from abroad during crises.
The same goes for repair, maintenance and overhaul facilities and, at the next level, the upgrade of weapons platforms.
The liberalisation of foreign direct investment in defence manufacturing, raising the limit under the automatic route to 74%, should open the door to more joint ventures of foreign and Indian companies for defence manufacturing in India.
China, better prepared for the post-COVID world
COVID-19 pandemic, India’s Minister for External Affairs, S. Jaishankar, had observed (at a lecture) that “what defines power and determines national standing is also no longer the same... Technology, connectivity and trade are at the heart of the new contestations....”
The Minister could never have imagined that within a few weeks, his prediction would be overtaken by a tectonic shift in the global situation thanks to a virus and a pandemic.
What distinguishes the present pandemic from earlier ones is its economic impact, which is perhaps even more threatening than the human costs involved.
Job losses have been massive, specially in urban areas. India’s exports in the month of April, for instance, were the worst in the past 30 years.
Well before this, India had been witnessing a persistent economic downward slide.
The Centre’s finances are not in the best of health.
A valid criticism is that the patchwork of stimulus packages reveals a disjointed mosaic of ideas and thoughts.
Many are, hence, viewing the stimulus package as a panic reaction to an increasingly difficult situation rather than a deliberate plan of action.
Almost five years ago, China’s President, Xi Jinping, had floated the idea of “a Community of Common Destiny of Mankind”, in the course of an address to the UN General Assembly (2015).
In this, he outlined China’s viewpoint on aspects such as economic globalisation and the information technology revolution.
BRI: encompasses policy, infrastructure, trade, financial, and people-to-people connectivity, and, implicitly also, security ties
The 19th National Congress of the Communist Party of China (2017): enable China to achieve pre-eminence status within the global order.
China Standards 2035: plans to set new standards with regard to the Industrial Internet of Things (IIoT) and define next generation information technology and biotechnology infrastructure.
Internationalisation of Chinese standards would provide China a clear advantage by providing it an opportunity to set the standards in emerging industries such as high-end equipment manufacturing, unmanned vehicles, new materials, cybersecurity and the like.
China is hoping, thereby, to reap the “early bird” advantage, even as other industrial nations struggle to recover from the devastation caused by the COVID-19 pandemic.
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