Is Economic Doom In Post COVID-19 Scenarios Exaggerated? – OpEd

In  living memory, the worst disaster and miseries took place during World War II. Large number of manufacturing units, airports and seaports were destroyed and buildings demolished. Japan suffered the worst when the atom bombs were dropped on Hiroshima and Nagasaki, causing the death of millions of innocent people. When the World War II ended, Germany and Japan were subjected to huge destruction by invading allied forces. Large number of people thought that Japan and Germany were destroyed beyond repair. Further, several countries like France, Britain also suffered heavily, though they were part of the victorious team.

Recovery after World War II

After the World War II ended and world returned to peaceful time, Japan and Germany rose from ashes and in a few years, emerged as one of the strong economies of the world  by achieving remarkably in the technology front and building up massive infrastructure projects and manufacturing units. At the end of World War II, no one predicted such a grand recovery by these two countries. Other countries like Britain and France also made rapid recoveries.

Difference in intensity of disaster between World War II and COVID-19

Unlike the World War II disaster, in the case of the present COVID 19 disaster, infrastructure facilities, manufacturing units and  research centres remain intact.

What is happening now in the ongoingCOVID 19 crisis is that a large part of the world is going through a near total lock down conditions with manufacturing activities and transport facilities being stopped and very large section of world community asked to remain indoors.

Economic activities have come to a near halt in several countries in the world. That means the basic strength  determining the status of  world economy remain intact and any slowdown in economy  is likely to be for a short period of a few months.

Prediction of economic doom for India

Taking the case of India, several international rating agencies have predicted that India’s growth projections could severely slide down with GDP of !% or even less, that would lead to massive job losses and perhaps even social unrest, since around 250 million people in India live below the poverty line.

Most of these grim predictions for India have been made on the basis of the so called mathematical model, where  past trends of data are the basic inputs for working out the predictions. Several  factors including human ingenuity and the inevitable efforts and work of common man to overcome the obstacles and move on have not been given any weightage and which are immeasurable. As far as India is concerned, one can confidently say that such prediction of  impending economic doom will not happen.  

Indian scenario

A strict lockdown has been imposed for around 40 days period when the agricultural operations have not been affected though the transport of agricultural goods from one place to another have been impacted to some extent.

It should be kept in view that Indian agricultural sector contributes substantially for India’s GDP and employs a large number of workers, both men and women. With agricultural operations continuing during the lockdown period, there is unlikely to be any drop in production of food grains due to lockdown and food shortage is unlikely.

The basic strength of India in the form of manufacturing facilities, software expertise, transport infrastructure, etc. remain intact and can resume full-fledged operations to a normal level within a few days of lifting the lockdown.

While many people in the lower income group have lost wages during the lockdown period and have been given some sort of welfare support by the governments competently and to the extent possible, people will forget the lockdown period as a bad dream after the normal operations resume.

In other words, what has been lost during the 40 days of lockdown period can be easily made up by increasing the production of goods and services in the coming days. Of course, some sort of concessions have to be made available by the government to vulnerable groups, which is already being planned and some measures already announced.

Judging the economy of a country

The judgement of economic performance of any country is always done in comparison to several other countries including the developed and developing ones at a prevailing time. In the case of COVID19, most countries have suffered in nearly equal measure in terms of degree  and would revive themselves back sooner or later, perhaps, sooner than later, depending on their strength and weakness.

When all countries suffer nearly uniformly in the economic and industrial front, the parameters for measuring the performance of the individual countries would themselves change and perhaps, the “balance of power” of different countries in the world would remain intact nearly at the same level.

Ground reality give hope

While the armchair economic pundits and statistical speculators may predict economic doom and bad news always attracts attention, the ground realities are different and gives hope for the better. COVID 19 is a passing crisis  and the world has always been jumping from one event to another.

COVID 19 will also go away leaving the world with temporary scar.