Sunday, November 28, 2021

Kaushik Basu’s rant on lockdowns sullies a magnificent India in Corona pandemic

Kaushik Basu is such an embarrassment in Indian Express today. This is a cautionary tale for those who invite him in global summits and stop the press to accommodate his piece. I am not an economist but know his name, as must be million others, and for those uninitiated, the newbies in our campuses, he was the former chief economist of World Bank, chief economic advisor during the UPA-2 between 2012-2016 etc, etc.

The thrust of Basu’s piece is the failure of India’s four complete lockdowns during the Corona Virus. He begins by citing India is only behind the United States and Brazil on the count; that India’s lockdowns didn’t have supporting corollary actions; and that forcing Indians to huddle together actually has led to the spread of the pandemic. He concludes it as a “policy disaster”.

Only when I thought I was reading a bogus researcher of a bogus Foundation, think-tank or whatever you call them, an economist who is talking of everything but economics, Basu concludes his OpEd by quoting the grim IMF projections on India’s GDP and the shooting unemployment. So, finally the sermon from the priest. Only, this information, nothing new, just hangs in the air, unsupported by analysis or insight. Any news intern would’ve flushed his career to gutter for such mindless rant.

Those upstairs have sprung their own “black humour” on Basu as Mumbai reported its lowest count in two months; and Delhi showed up only 1,379 positives on Tuesday. But it’s not a slanging match where I counter Basu with only 20,000 deaths and less than 3 lakh active cases in India as of now. The issue is “Lockdowns—Good or Bad” and it begs some serious probe and reasoned answers.

Sweden and Norway: A tale of two approaches

I want you to look at the map of Europe. Sweden and Norway are cheek by jowl, equal in land to the last kilometre; identical in population on a perfect weighing machine. The two diverged on their approach to Corona Virus. Sweden preferred livelihood over lives, and let its citizens do as they wished. Norway opted for lives over livelihood and cracked down an aggressive lockdown.

So let’s look at the outcome. Sweden’s central bank expects its economy to contract by 4.5 per cent this year. The unemployment rate had jumped to 9 percent in May from 7.1 percent in March. Norway’s central bank, on the other hand, predicts its economy would contract only by 3.9 per cent this year. The unemployment rate is similarly better than Sweden. But hold your breath: This is not all.

Norway, for its enforcement of lockdowns, has only 8,000 plus cases and 251 deaths to show. Sweden, as can be expected in a laissez-faire approach to the pandemic, has 73,000 plus cases and 5,000-odd lives lost. Sweden is in top 25 suffering nations; Norway is 70th. So, Sweden lost both lives and livelihoods; Norway did better in both. How did it happen?

The analysts are coming to the conclusion that lockdown or no lockdown, people are now extremely mindful of their spending. They are also wary of the medical expenses so are saving money for emergency, unsure how long Corona would be around in coming months. Lack of demand has affected supply, be it through manufacturing, supply chains or even E-commerce. What point is opening up your gyms, hotels, restaurants, malls and boulevards if people are not going to show up?

India was extremely smart in comparison. Indeed, I would say it’s been a shining success to the rest of the world. It enforced lockdowns—which Basu doesn’t fail to remind us as the most stringent—to save lives even as it beefed up its medical response in the background. It then played by the ear, fine-tuning its measures as per the spread and livelihoods.  Now be it ramping up the tests or pumping in the ventilators, India looks combat ready. The Modi government is rising above politics, as shown in holding Kejriwal’s hand in Delhi, and putting the nation first. This nuanced approach is hauling economy back on its feet—markets are now back to March levels—and the seeds for an “Atmanirbhar Bharat” (Self-dependent India) are being laid.

Yes, India could have been better on migrants. The Modi government has gotten its due rap on the knuckles. But don’t use it blacken a magnificent joint effort by the rulers and ruled of India. All you do is to show your hatred for Modi, even as it pleases a few individuals at 10 Janpath.


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