Lives vs livelihoods

The low virus-related mortality rates for India and other tropical countries do not support the case for stringent lockdowns, which would also destroy businesses and jobs

There is a lot of data in the public domain on the rapid progression of the Covid-19 pandemic that, among other things, is threatening to result in another Great Depression. 

The course of the Covid-19 pandemic has varied sharply across space and time. Aggregating the data controlling for demography and geography reveals interesting patterns that have a bearing on the kind of differentiated public policy response that is warranted. The data from China, where the pandemic began, looks very different when controlled forpopulation size. 

Countries in the northerly latitudes, above roughly 30 degrees north latitude, have a different epidemiological pattern from those in and near the tropics. The influenza virus appears to take a more deadly form in the former zone, whereas the latter is more susceptible to bacterial epidemics such as malaria and  tuberculosis. 

The normal mortality distribution deriving from epidemics also follows this differential epidemiology. The United States has about 55,000-60,000 deaths annually from seasonal flu. Controlling for population size, this translates into roughly 200,000 deaths for a country of India’s size. That the seasonal flu has not been a major public health concern in India is apparent from the fact that flu data is not readily available, unlike the time series data available for tuberculosis and malaria.

Only data relating to Influenza A, H1N1, are available. Deaths from H1N1 have averaged at most around 2,000 per year for the past few years. Controlled for population, this translates into about 500 deaths a year for a country of the size of the US. Annual mortality from tuberculosis in India on the other hand exceeds 220,000. Another 20,000 die from malaria. 

The Spanish flu always comes up in any discussion regarding India’s vulnerability to large-scale flu-related deaths. According to received wisdom, India accounted for the highest number of deaths globally during the Spanish flu of 2018. There is, however, enormous difficulty in disaggregating flu mortality from other causes, especially since bubonic plague and malarial fevers were also rampant at the time of the Spanish flu.

Basal death rates were very high right from the first census in 1872 census till 1921, during which the population remained stagnant despite very high birth rates of about 35-40 (per thousand). A large number of Spanish flu cases were also imported through large-scale overseas troop movements on account of war. Basing public policy on a statistically challenged event over a hundred years ago and ignoring what has transpired since is suboptimal. 

Those in informal employment have suffered the most during India’s lockdown

The accompanying table comprises 29 big countries that together account for almost three-fourths of the global population. The countries are classified according to geography. The first set of 19 countries is located approximately above 30 degrees north latitude in the temperate zone. The second set of 10 countries is relatively poor and below 30 degrees north. The land mass and population below 30 degrees south is negligible.

The contrasting course of the Covid-19 epidemic in the two sets of countries is so startling that one wonders whether the same public policy response was ever warranted. Bangladesh and Pakistan, which do not have such a comprehensive lockdown as India, have fared almost as well. The countries south of 30 degrees latitude account for 37 per cent of the global population and just 3 per cent of reported Covid-19 cases and deaths. Most of the Covid-19 cases here are also linked to overseas travel. The lower number of cases in these countries might be because both testing and data systems are weaker. Deaths are, however, less likely to be under-reported than infections.

On the other hand, 19 major countries located above 30 degrees north latitude account for a slightly lower share of global population, but over 81 per cent of reported cases and over 87 per cent of deaths, despite having better resources and the best public health infrastructure in the world. Most of the remaining 16 per cent of cases and 10 per cent of deaths are also from countries in this region that are not included in the table.

The global best practice is to combine lockdowns with fiscal packages (10 per cent of the gross domestic product, or GDP, in the US so far, 15 per cent in the UK and 20 per cent in Japan), on a scale unknown outside times of war, in addition to very accommodative monetary policies. This attempts to address the catastrophic economic consequences of national lockdowns through a combination of basic income support, tax breaks, incentivising employers to protect jobs, and subsidising businesses. Such massive State support arguably tilts the trade-off between lives and livelihood towards the former. 

Source: https://ourworldindata.org/coronavirus-source-data

The poorer countries, where Covid-19 is far less rampant and severe, cannot afford such fiscal support. India’s fiscal package thus far is just 0.8 per cent of GDP, despite the large-scale dislocation arising out of arguably the most stringent shutdown globally. In these societies it is also impossible to enforce personal distancing outside urban middle class neigbourhoods. The absence of such support leaves a large number of persons at or just above the poverty line jobless and cashless in the absence of social security or automatic stabilisers.  They are unable to exchange labour income for food, and have no savings to fall back on, making them vulnerable to starvation.

A protracted lockdown also risks tanking the economy, destroying businesses and jobs permanently, and endangering complex supply chains. In these conditions, the trade-off between saving lives and saving livelihood tilts towards the latter, especially when the data does not support the case for stringent lockdowns. Would enforcing social distancing norms, enhanced testing, tracking overseas travel and data-based localised shutdowns have sufficed?

The bottom line is that an oversized fiscal stimulus is the flipside of a comprehensive lockdown, at least in compassionate liberal democracies.

The writer is RBI chair professor, ICRIER, New Delhi