Friday, April 17, 2020

India: Bracing for the Covid-19 Viral Contagion


India’s indefinite nationwide lockdown will exacerbate India’s pre-Covid 19 economic slowdown.

India’s weak healthcare system, extreme urban pollution, high urban density, and citizenry with underlying health issues are deadly conditions for a conflagration of a novel pandemic.

The fragmented structure and impending unraveling of India’s food supply chain will result in shortages thus dramatically higher food prices.
  
India is among the emerging countries that are bracing for the pandemic onslaught which has only recently touched their shores. It’s only a question of the severity of the economic and human cost. The Indian government’s mandated full country lockdown for 21 days, set to expire 15 April, was recently extended indefinitely.

The emerging pandemic storm is an imminent threat to India, a country of 1.4 billion citizens. Virology experts estimate they are two weeks behind the US and four behind Italy’s apex infection points. India’s woeful healthcare facilities with respect to qualified and available medical professionals and necessary equipment are more under-prepared than their western and American counterparts particularly since they are already burdened with handling known, endemic and treatable diseases.

Socio-Economic Demographic Primer

According to the 22 February 2020 IMF report, India has the world’s 5th largest economy as measured by nominal GDP. Nonetheless it faces a daunting task in containing the Covid-19 virus which thrives under conditions that categorize India.

According to the report India’s Smart Cities Missions, June 2017, these are some critical data. Of the total population of 1.4 billion:


·         380 million are urbanized (31%).
·         833 million are rural (69%).
·         632 million live in poverty – 25% of the world’s poor.
·         Almost two-thirds of statutory towns in India have ‘slums’ and a total of 13.75 million households live in them.
·         About 36 per cent of households in these settlements do not have basic facilities of electricity, tap water, and sanitation within their premises.
·         India also records the world’s largest number of homeless persons (at least three million in urban areas according to independent estimates).”
·         Historically there is a large rural to urban migration in search for work.

Water scarcity [especially potable] and urban density by the lower socio-economic classes including many migrant workers, make it difficult to maintain good hygiene and social distancing.

Economic Update

In 2019 India’s economy slowed considerably to 4.7% with a stubbornly high unemployment aggravated by the sudden internal exchange policy eliminating large dominated currency in 2016.

According to the BBC News article dated 3 April 2020 Coronavirus: India’s Bailout May Not Be Enough to Save Economy the Indian government has pledged a $23 billion relief package aimed specifically at the informal industry (such as migrant workers) that consist of 94% of the working population through direct cash transfer and food security measures.

Additionally India will receive $1 billion from the World Bank for scanning, contact tracing, lab diagnoses and set-up of isolation wards according to the Wall Street Journal article 9 April 2020, “IMF, World Bank Face Deluge of Aid Requests”. However as the pandemic is at the brink of engulfing the Asian subcontinent these aid packages are too little, too late to prevent an overwhelming contagion.

Although the confirmed Covid-19 cases to date are low, the paucity of testing kits and testing has grossly under-stated those who are infected.

Health Care Primer

The following are key points discussed which I paraphrase with respect to India’s health care dilemmas according to the 12 June 2019 article entitled India’s Ailing Health Sector in The Diplomat:

·         Over 50% of health professionals in India — including doctors, nurses, paramedics, and midwives — do not have proper qualifications while 20 percent of adequately qualified doctors are not part of the current workforce. Of the currently working health professionals, around 25 percent do not possess the necessary qualifications as laid down by professional councils.
·         The geographical distribution is a problem with two-thirds of doctors, nurses, and midwives working in urban areas where only 29 percent of Indians live. In many villages, the density of healthcare professionals lags behind many African countries.
·         India’s low spending on healthcare. Despite being the world’s fifth largest economy, public health spending has languished at under 1.5 percent of GDP, one of the lowest rates in the world. For comparison, the United Kingdom shelled out 9.6 percent of its GDP in 2017 on health. The United States’ health expenditure is 18 percent of GDP.
·         The high cost of medicines in which an overwhelming 70 percent of healthcare expenses in India are paid by Indian patients out of their own pockets, one of the highest rates in the world.

The following chart entitled The Countries with the Highest Density of Doctors provided by OECD on 19 March 2019 and presented by Statista, an online German statistical service, highlights the dearth of doctors in India per 1,000 inhabitants:






Food Supply Logistical Labor: A Double-Edged Sword

India’s requires highly labor-intensive work for harvesting and transporting foodstuffs employing millions of workers. However the methods in combatting a pandemic through lockdowns and social distancing threatens India’s ability to feed its citizenry. The Wall Street Journal article 8 April 2020 India’s Food Supply Chain Frays as Workers Stay Home, provides a background summary on how India feeds itself:

·         India’s food industry is highly fragmented consisting of millions of small farmers, selling through millions of middlemen who then deliver to millions of tiny shops.
·         Every food industry is labor intensive including the wheat industry, high mechanized in western countries.
·         Already there are fewer farm workers (particularly for the current wheat harvest), fewer trucks arriving to load and deliver foodstuffs to distribution warehouses and fewer warehouse laborers to unload and reload foodstuffs for local delivery.
·         The entire process is labor-intensive because wheat is harvested by hand, sacks of foodstuffs are unloaded and loaded on trucks using lines of men not forklifts, and local deliveries of perishable items are done by bicycle, not refrigerated trucks.

In other words the pandemic has made a robust food industry that provides employment to millions is at risk into a fragile one. It’s an industry that is dependent on millions of people in face-to-face transactions making it almost impossible to maintain social distancing to contain the virus.

Pollution + Novel Virus = a Lethal Combination

India’s high pollution serves as an accelerant for this particular novel virus. According to the IQ Air Report, India has 14 of the top 20 most polluted cities in the world. In the following chart entitled Study: Pollution Kills 8.3 Million People Annually from the Global Alliance On Health and Pollution published 20 December 2019 and provided by Statista, an online German statistical services which also includes poor water sanitation and contaminated indoor air.



The present-day health figures, even for young urbanites, are not encouraging because many Indians already have underlying health issues such as hypertension, respiratory problems, high rates of smoking and compromised immune systems caused by pollution.

In every country the Covid-19 virus has caused a high human toll and devastated their economies. India will be not be any different. Nonetheless because of the aforementioned factors plus weak surveillance, lack of voluntary reporting, and sheer size of the population, the full extent of the pandemic will not follow the usual timetables as played out elsewhere.

Copyright 2020 Indo-Brazilian Associates LLC

Indo-Brazilian Associates LLC is a NYC-based think-tank and advisory service that provides prescient beyond-the-horizon contrarian perspectives and risk assessments on energy investments, geopolitical dynamics and global urban security.



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