The Domino Effect of the Pandemic on the economy Part 1
By Malini Shankar
Digital Discourse Foundation
The Novel Corona virus is a mutant with traces in similar strains of SARS, SARI, MERS, H1N1, H1N5, H1N9, Hantavirus, and before that Dengue, Chikungunya, Bird Flu, Swine Flu. But none other than the Coronavirus has gripped Humanity, terrorising to wipe out the human race itself. Like every modern Pandemic, Aviation has served as the catalyst for spread of the infection globally.
To stop the virus from spreading
halting aviation was an immediate necessity. But aviation was stopped only
after the World Health Organisation of the United Nations declared COVID 19 a global pandemic. That
it was a biological weapon of mass destruction cannot confidently be dismissed
as ‘Chinese Whispers’ confidently yet. Industrial output dependent on aviation
suffered. The global economy, - already tethering on recession - went into a
fiscal tailspin.
GDP figures were tumbling quarter
after quarter even before the Pandemic. Unemployment was as rabid as the Flu in
India, before the Pandemic itself.
Even if the virus can be
contained, the global economy is likely to resuscitate only after a decade.
For, the virus triggered Lockdown has had a domino effect, stupefying the
economy into comatose.
Thanks to aviation (including
flights to extradite stranded compatriots) the infection started making its
global footprint. For instance by the time stranded Indian students were flown
back from COVID 19 epicentre - Wuhan City in China, - the virus had spread to
Italy, UK and Iran.
With Aviation halting in its
tracks, Agriculture, Farm supply and Food security became an issue, Automobile
industry, Business establishments, courts, education, manufacturing, industrial
output, Media, pharmaceuticals, Railways, Shipping, textiles, tourism, tax, and
trade took a beating. Apart from British Airways and Lufthansa retrenching
thousands of people (22000 people in each airline lost jobs), Airbus Industrie
is also next in line in issuing pink slips. Air France has also decided
retrenchment of 7500 employees. Media and entertainment production houses, TV
channels, digital media, media start-ups retrenched people whole sale. In India atleast a thousand jobs in the
mediascape were on the line.
Schools and Universities shut
down; examinations were postponed, depriving education / degree certificates to
those on the verge of graduation; this led to increase in the rate of
unemployment.
Private school teachers,
employees of Internet companies, private sector bank employees, Industrial workforce,
who have been saved from retrenchment - but are bereft of salaries - have
resorted to selling vegetables in Bangalore, Delhi and Chennai.
Canteens in schools and colleges,
companies and factories all shut down, endangering the livelihood security of entrepreneurs
and employees of MSMEs.
Vegetable and fruit vendors, fish mongers, flower sellers, domestic workers, gardeners, security guards, drivers, cooks, carpenters, laundrymen, Autorickshaw drivers – mostly in the self-employed workforce - suffered job losses; threatened with loss of their incomes / livelihoods, the underbelly of the cash economy triggered reverse migration.
Professor Amita Bhide, Dean, School of Habitat Studies, Tata Institute of Social Sciences, Mumbai and
Convenor of TISS’s COVID 19 Response told Digital Discourse Foundation “India
was essentially a rural nation at the time of Independence though city ward
migration was triggered due to the colonial policies of exploitative
urbanisation. After independence, urban development was considered negative,
migration non-existent and pitched against rural development. Post 90s even
when cities were considered engines of urbanisation, and migration increased
due to more spatially uneven development, lack of investment in human capital,
increase in rural distress led to migration and exclusionary urban policies,
have meant that migrants have been in a highly uncertain and invisible
position. The only link to the city remains labour. The lockdown severed that
link and hence the migrant crisis”.
COVID 19 triggered lockdown
collapsed the cash economy. Debt trap for the migrant population follows
inevitably. Cash doles from a bewildered Government of India will not lend thrust
to the struggling economy.
“Exploiting labour has been a
feature of the Indian economy for a long time. This is just the latest, brutal,
manifestation” says Dr. Vinod Vyasulu President of Centre for Budget and Policy
Studies, Bangalore in an e mail interview to Digital Discourse Foundation.
Cash doles served the purpose of
food security to some sections of the migrant population, not exactly leading
to demand; consequently supply side economics leads to an inflationary spin as
the extra cash supply does not lead to increase in demand or economic
production.
“The concept of development
itself has to be questioned. It is not the inadequacy of the development, but
the nature of the development paradigm itself. Development is a way of
magnifying vulnerabilities and increasing the sufferings of the marginal and
minorities. The crisis today is the crisis of the paradigm and not of bad
application. Economics has no notion of vulnerability or suffering. What we
need is a new mode of thinking which combines justice and understanding of
suffering” says social scientist Shiv Vishwanathan, in an e mail interview to Digital Discourse Foundation
While Prime Minister Modi
announced that landlords should not demand rent, and EMI repayment will be
staggered across the fiscal board, even landlords and the “creamy layer” suffered
loss of income. Locking down the economy triggered by a pandemic, in the
absence of welfare state economics, COVID 19 became a secondary disaster - all rammed
at once nevertheless.
The pharma industry’s dependence
on China for raw materials and drug manufacture led to an artificial scarcity
of pharmaceuticals. Halting drug manufacture increased potential health risks
to many a demographic group, unwittingly increasing anxiety among vulnerable
sections of populace - causing increase in mental health issues.
Lack of Mental Health Care in India
is as it is a cause for worry. Given that the geriatric section of society is
very vulnerable to COVID and the fact that co morbid factors like hypertension
and Diabetes is rampant in the geriatric sections of society, anxiety on
account of lockdown is escalating mental health issues. Many people who could
afford – started hoarding pharma supplies like tablets, strips, testing kits,
gloves, etc. This led to an artificial scarcity in pharma supply. In Sri Lanka, hoarding pharmaceutical supplies
was inevitable. Pharmacies too closed down for the Lockdown.
The unprecedented lockdown affected
farm supply chain and lo and behold food security came into focus leading to
hoarding of agricultural produce by everyone, from the farmer to the e-Tailer
to the homemaker. .This has the potential to increase prices of food and
essential commodities unnaturally as an artificial scarcity is created.
With offices, business
establishments and manufacturing industries closing, not only did the economy
and income of employees suffer, but unemployment led to livelihood insecurity
and even food insecurity for millions of migrants living in penury for daily
wages.
Traders, shopkeepers, cooks, para
medical staff like nurses with part time
employment during home visits, and physiotherapists, counsellors, private
veterinarians have all been affected by the Lockdown inestimably.
Work From Home worked for the
white collared worker. WFH is an ornamental occupation until it helps in trade
of commodity or product created while Working From Home. For most of the others
employment plummeted exposing the chinks in the armour of the Indian economy:
the migrant labourers in the unorganised sector faced livelihood insecurity
toppling the economy belly up. It became the unfortunate landscape for start-ups
to become upstarts.
Indian Prime Minister Narendra
Modi pleaded to the countrymen (and women) to not disengage staff and to give
them monthly salaries even if they are not supposed to work during the Lockdown;
however this was not entirely feasible. Aviation took away the bulk of jobs in
pharmaceuticals, tourism and hospitality, manufacturing, export import trade,
shipping and so on.
Cooks, domestic helpers, drivers,
painters, tourist guides, self-employed Autorickshaw drivers, canteen workers,
cleaners, construction or fish workers, plantation workers are all migrant
labourers in the unorganised sectors working on cash hand-outs without blind
employment benefits. It is normally the white collared worker or black moneyed
class that gets hidden benefits like house rent, travel allowances, grocery
coupons, and increments in addition to salaries.
Most workers in this sector also
depended on their employees for daily food and food rations in exchange for hard
labour – usually upwards of 15 hours a day. Lockdown meant no daily wage
earnings, no alternate sources of employment, no housing, and no food security
for migrant labour.
Timely commentary
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