CATCH-22 SITUATION

As lockouts ease across nations, life will not go back to the earlier “normal”, till a vaccine is found to neutralise COVID-19. Finding the vaccine, may take 12-15 months. Then, we have to inoculate the whole world. Expect lockdowns, on an on-and-off basis, for the next 18-24 months. So, our “lockeddown” way of living and working, with occasional relaxations, may be the “new normal” at least for some time.

We will have to wear masks, practice social distancing, avoid large groups, etc. Even if bars and restaurants are open, we will sit at appropriate distances. Cars, trains and planes, will carry fewer passengers. Offices will operate with 50 per cent of the staff operating from their homes. Getting part-time domestic help may be difficult; we may have to cook our own foods and wash our clothes.

The economies of all countries will be confronted with nil to negative growth rates in the current year. Many factories will find it difficult to re-start their operations, since their migratory labour has returned to the villages. It will not be easy to lure them back. Many labourers may remain ensconced in their villages, till the disease is controlled.

Consumers will save, rather than spend. Having been through a traumatic lockdown, consumers will conserve their monies for unchartered days ahead. As companies face declining demand, jobs are likely to reduce. Hence, unemployment could augment across countries. It may be necessary to provide unemployment benefits to displaced workers. Large corporations will shed people; their revenues will decline. The stock market will oscillate. Governments will have to provide additional incentives to industries to kickstart production.

Many governments will not have the money to provide welfare to all citizens. However, this is not the time to scrounge. Governments should resort to deficit budgeting for about two-three years, but ensure that the poor are saved from further ordeals.

The world has not faced a health and economic crisis of this scale, since World War II. The responses of all governments, must be equally gigantic in all areas, including health, public welfare and fiscal policy. If developing countries lift the lockouts too soon, they run the risk of massive infections, which their fragile health systems cannot manage. They are short of testing kits, hospital beds and medicines. If the lockouts are extended indefinitely, then the unemployed will revolt.

Rajendra Aneja

Mumbai, India

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