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March 18, 2020

Converting crisis into opportunities

The Financial Express |
March 16, 2020| 

Sajjad Zohir

I recall reading the Patterns of Evolution by Niles Eldredge. One of its central propositions suggests improvements to the Darwinian evolution theory, which appears akin to a crisis theory. Citing examples from the vegetation world, Neil expounded how some species are quick to expand and occupy the space made vacant due to, say, an accidental fire. People talk about system-generated crises that recur (such as, inventory build-up leading to downturns in business cycles).

However, occurrences such as COVID-19 are considered accidents, similar to Niles’ fire in a forest that opens up space-grabbing by the smartest specie. In case of the crisis caused by COVID-19, the strategic game-playing appears to surface long before the pandemic character of the virus fully unfolds. This paper highlights some of those trends.

A recently published China Monitor (Issue 2) by the Delhi Policy Group (DPG) mentions of three-fold Chinese strategy to manage the COVID-19 crisis. These are:

(i) Provide”People’s Rice Bag and Vegetable Basket through continuous supply and by maintaining quality and stable prices of commodities of daily need. It is presumed that when people have sufficient food in their hands, they won’t panic and devote themselves more actively to the war against the epidemic”.

(ii) The central enterprises (petroleum and petrochemical companies, power grid and power generation companies, iron and steel producers, etc.) along with other key players in the services sector have been instructed to resume production on an urgent basis, so that employment is maintained, and China’s global supply chain dominance remains unchallenged.

(iii) There is a deliberate push to transform the epidemic crisis into an opportunity, particularly in terms of upgrading China’s industrial structure, deepening supply-side reforms, and promoting technologically advanced manufacturing, unmanned manufacturing and service industries, through extensive use of big data and artificial intelligence (AI). Further, in order to netralise the impact of harsh quarantine measures, platform economy, sharing economy, and digital economy are being encouraged.

While all three are important lessons to be learned for governments to face similar situation, let me add to the third. Historically, Chinese leadership recognises swings in development path and opts to use a crisis to consolidate for future progress. Extensive use of 5G-supported IOTs (Internet of things), spread of online education and methodical implementation of decisions on cordoning cities and movements are nothing less than a ‘cultural revolution’ that are possibly preparing the Chinese people for a post-Fourth Industrial Revolution (4IR) society!

In this regard, the Italian case is puzzling. While latitude, higher proportion of old-age population and the culture of mass congregation are tabled to explain the deadly spread of the virus in the country, the conspiracy-tainted minds raise two additional issues. Will there be a technology-driven response with further use of 5G-based IOTs on the European soil? And, is there any reason to fear that cordoning of neighborhoods and cities will be misused to segregate undesired segments in a population? Unfortunately, coverage in the media on Italian resistance is rather scanty. Information pouring in through social network give a gloomy picture denting all hopes on humanity. It is however heartening to see a Chinese medical team reaching the Italian soil to support treatment of the infected people, and hearing of Bangladeshi volunteers risking their lives to assist the Italians.

The war with words, between USA and China, has been a source of entertainment for onlookers. The blame-game reached a new level recently with the Chinese hinting at possible links between visits of US military personnel in Wuhun and the spread of COVID-19 in that city! A significant (and baffling) development is the US declaration banning European air travel, which excluded Ireland and the UK. It is possible that limited logistics at European ports compelled such a decision, after all, it is difficult to purge with the practice of having US-entrants checked at departure ports outside the USA! The sceptic had presumed that the US move is aimed at influencing the supply chain in the trans-Atlantic region to better position post-Brexit UK. This turned to be short-lived since the decision was revised within 24 hours to include both UK and Ireland in the ban. One, however, expects many more moves from the US to realign global supply chain before China moves fast to reestablish its dominance (as narrated in DPG monitor). While the strategic games may continue beyond the taming of COVID virus, EU-China bondage is likely to be on rise.

For the developing world, or should I say, the (lower) middle income countries, aid/loans are likely to be packaged under coronavirus. USAID committed 37 million US$ to 25 countries, about 2.5 million of which is for Bangladesh. The support is to the World Health Organisation (WHO) to set up testing labs and other accessories to contain the spread of the virus. Clearly, there will be reallocation of global resources for which countries like Bangladesh will have to be ready. There will also be opportune-seekers, quick to convert ‘shops’ to ‘mask-producers’ or rebottling sanitiser fluid. Still worse, there will be frauds to play on ignorance and beliefs trying to market ‘totka’ medicine!

Amidst all that are happening, India’s decision for ‘self-isolation’ could be consulted with its neighbours. There are reasons to be worried when one hears of notices served by state governments in the northeast. Tripura is a case in hand, and information suppression along with a COVID-based rationale for isolating clusters can turn out to be a deadly instrument in the hand of wrong-doers! It is sad to hear scare-mongering against the so-called ‘immigrants from Bangladesh’ when the urgency of cooperation across borders should not be undermined. Unfortunately, caught in the inertia, politics appears to fall behind the changes in the real world, and rhetoric around citizenship continues with COVID-related deaths at doorsteps!

The failure to capitalise the crisis situation to the betterment of  society is no less evident in Bangladesh.  It took a while for the government to acknowledge the severity of the ensuing crisis. The inertia due to long-planned celebrations of Bangabandhu’s centennial is understandable. Yet, to face it with partisan cadres, lacking the specialised knowledge of delivering social and public services, is too naïve an idea. The Wuhun experience, as revealed through many writings and videos in social networks, suggests of a wide number of state-supported (often, community-level) engagements to bring about qualitative changes in society. Basic hygiene is one. No less important is to establish sovereign space for in-country health-related research, not meant to perpetuate the role of blindly monitoring and maintaining protocols! A second important area is the education, where online facilities should be supported to complement the school-based efforts in the restricted environment. There also needs to be qualitative changes in the delivery of public services. The bottlenecks to digitisation and bringing transparency in public services can be effectively dealt with during a crisis situation if there is a political will.

Many of the changes can be better managed by involving communities and business associations, and by supporting startups in the IT-enabled service sectors. A large number of youths could be motivated to engage in innovation that would be locally rooted and would provide more appropriate routes to engage for the collectives. To realise those, the government however needs to get out of party-centric social engagement.

There is also a need to protect the public interest from the hyenas, which are always on the lookout to feast over agonies of other animals! In summary, spaces are being created by the crisis and it will be a failure of the political leadership if those are sold out to wrong players, with no attempt to promote locally rooted activities and agencies for grabbing those spaces and prepare society for a better future. Clearly, we do not want to turn into an enclave of guinea pigs!

Sajjad Zohir is an economist and the views expressed in this article are of the author’s own and do not reflect those of the Economic Research Group,where he works.