There is a lot to hope (25-4-2020)

Almost all developed as well as developing countries across the globe are straining every nerve in fighting a pandemic of unprecedented proportions. Governments are intensifying restrictions on businesses to halt the spread of the coronavirus pandemic. Fear of the virus has reconfigured the very concept of public space, impeding consumer-led economic growth. The prospects of a devastating recession delivered by the contagion are looming large. Fears are growing that the downturn could be far more punishing and long lasting than initially feared, potentially enduring into next year, and even beyond.

The COVID-19 pandemic is essentially a public health emergency. As long as human interaction remains a dangerous proposition, business cannot responsibly return to normal. And what was normal before may not be so anymore. People would not be so keen to go to crowded places, restaurants and concert halls as they were earlier, even after the virus is contained.

The abrupt halt of commercial activity has imposed profound and enduring economic pain in every region of the world at once indicating that recovery could take years. The global economy is in a temporary deep freeze. The losses to companies, many already saturated with debt, could trigger a financial crisis of cataclysmic proportions. Stock markets across the globe have reflected the economic alarm.

The situation looks exceptionally dire in developing countries, which have seen sustaining on foreign investments, sending currencies plummeting, forcing people to pay more for imported food and fuel, and threatening governments with insolvency, all of this while the pandemic itself threatens to overwhelm inadequate medical systems.

Some social distancing measures could remain indefinitely. Households may remain agitated and risk averse, making them prone to thrift. Consumer spending amounts to roughly two-thirds of economic activity worldwide. If anxiety endures and people are reluctant to spend, expansion will be limited — especially as continued vigilance against the coronavirus may be required for years.

There is strong hope that the virus would be tamed — and no one really knows when that will be — but the world that emerges is likely to be choked with trouble, challenging the recovery. Depleted investment and innovation, steep fall in manufacturing, halt in international trade, acute shortage of essential commodities, mass joblessness and widespread bankruptcy are among the most frightening challenges for almost every nation. Resilience of every economy is going to be put to a rigourous test.

Still there is a lot to hope for humanity, which has survived two world wars. The hopes surround the governments and the leaderships the countries have. It is pertinent that the troubled times with a bundle of formidable challenges ahead call for strong and visionary leadership with unlimited prudence, fore-thought, far sightedness and deft handling of situations for any country. A country like India with its proven power of resilience should be able to prove to the world its true mettle, provided all sorts of conflicts, ideological differences and anti-development issues are put in cold storage at least till good times return.