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4 years ago

Exiting economic depression: A blueprint

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Infecting about a million-and-half people, and taking nearly 100,000 lives thus far, coronavirus (Covid-19) seems set to leave an epochal economic footprint. With developed countries (DCs) at or near lockdown conditions, and emergent countries unwillingly perched at cliff's-edge, recessionary conditions predict economic depression by year's end. Just looking at the staggering human costs at the end of April 2020 suggests no less: Italy's corpse-leading 17,000-odd followed by Spain's 14,000+, the United States approaching 13,000, France just crossing 10,000, about 6,500 for United Kingdom, and Germany's 2,000-odd, among others with 5-figure fatalities; to which one must add Iran's 3,900-odd, China's 3,333, Indonesia's 250-odd, the Philippines with about 200, Sri Lanka's about 200, India's 150-odd, and Japan leading a string of others below the 100 mark.

Adding growing jingoism fattens the plot. Lurking in arcs from Great Britain to Brazil and the United States to India, it is not something that can be blamed upon any one person, group, or country, but from which no one can expect to escape unscathed. Everyone must begin (a) downsizing lifestyles; (b) accepting overburdened governments and collapsing policy priorities; and (c) preparing a Plan B for all activities, just to stay one-step ahead. Distancing oneself from populists, pedagogues, and politicians may very well provide the most healthy start.

This pandemic serves a better litmus test of 21st century country/individual leadership capabilities than democratic elections. Where to find cases, and where not to search, emerges from the country-specific cooperative capacity possible for any person, across both (a) domestic divisions, and (b) national boundaries. Since not even powerful/resourceful states can proceed alone, sharing scarce domestic resources externally becomes a big deal, and perhaps the spark. It is different from aid, even state charity. The historically highest state welfare provisions must be forged to inject life into commerce, investment, labour-flows, tourism, and other vitally-needed transactional springboards. How each state collaborates abroad, and to what extent they can go will standardise 21st century leadership. Peeking through critical 20th century economic turning-points supplies a good start, if we don't get bogged down over values and identity issues.

As the 1930s depression illustrates, no single factor was causal. Twin-sided technological developments, like tractors, evicted entrenched farmers, and townships bloated overnight into metropolitans dotting the DC firmaments, with newly-built factory assembly lines demanding higher work-skills as the price of growth. Liberating women, erasing segregation, and popularising elections from the 1920s were a necessary condition of the transformation, though still insufficient to push over stoutly stratified traditions. These transformations were not completed until the 1950s and 1960s, after a global war had quenched the similar populist fires as brewing today.

Externally, imperial systems collapsed, expanding markets, natural resources, tourist havens, and states. Ironically, many new ideas, intellectual juices, and human mobility, both horizontally (across country-boundaries) and vertically (through education) that were spawned, like free trade and immigration, become the primary populist targets today. Consciously warding off such 'bugs' permits leadership today.

Another pandemic, the Spanish flu, fed this brew from January 1918, eventually claiming 50 million and infecting 500 million lives (one-quarter of humankind). Enormous medical breakthroughs, facilitated by the above-mentioned technological, economic, political, and social transitions/transformations, dampened the crisis, just as we earnestly hope will be the case today. Facilitating these demands, inter-country cooperation cannot but be urged.

With the right hat on, our leaders can summon the same post-World War II peace, this time beyond DC neighbourhoods. Today's outbreak descends amid the transition from hardware-based manufacture-anchored 'Third Industrial Revolution' technologies (using the very assembly line just alluded to) to the software-driven 'Fourth Industrial Revolution', using artificial intelligence or AI (a human substitute that we, the most egoistic specie ever, ironically created). Net North Atlantic and Far East Asia DC populations have been graying, but their orderliness could model the unruliness of adolescent African, Asian, and Latin American countries. Even if sporadically done, or by parts, the 'epochal' 1920s/1940s change can become 'tectonic' 21st century changes from the 2020s and 2030s.

Coronavirus effectively severs 'old' world trappings from stalled 'new' aspirations. Though the 2008-10 recession could not, it spared us an economic depression. Now, as we face it, we must belt-tighten and swap horses swiftly. RMG (ready-made garment) booms could catalyse some areas, petrodollars turning deserts into modern cities and tourist beaches could do likewise elsewhere, while plenty of the Mukhesh Ambanis, Jeff Bezoses, Bill Gates, and Elon Musks sprouting everywhere, could do the rest. With populism growing faster and stalling those tectonic changes, opportunistic leaders could exploit localism to mobilise unsettled persons (such as those evicted DC farmers), exposing democracy's darker side for electoral gains (Aristotle called that a 'perverted' form of democracy, a 'mobocracy'). Whatever has prevented 'Third Industrial Revolution' residents from becoming full-fledged 'Fourth Industrial Revolution' citizens must be sifted and cleansed.

At stake is a combination of global growth-rates plummeting from a downwardly revised 1.5 per cent towards zero and trillions of dollars being released by handcuffed governments for the first time (2.2 trillion dollars, for example, in the United States doubles the 2008-10 bailout, and outstrips the 1930s recovery). When dozens of millions of unemployed workers have no income (highest US unemployment claims ever filed over two weeks, as at the end of March, was 9.9 million), thousands of factories shutter as supply chains snap (an impacted automobile industry adroitly shifted to ventilator production), and 'social distancing' also distances production from society, future indebtedness balloons, living expenses spirals, borrowings become costlier, and investments under-perform. How long the trauma remains determines how deep the trough will sink. Sports have vanished from our attention, food supplies await transportation, and human movements face restrictions, with doctors, security personnel, and legislators also more exposed.

As discrimination, fanaticism, racism, gender maltreatment, and poverty exploitation flourish, civic-mindedness fortunately grow. How states recover and find external support boils down to how communities or neighbours deal with each other inside the country. Only by absorbing homeless people, refugees, and farmers can success be predicted. Appropriate moment, this, for Bangladesh to accelerate free trade agreements, fully absorb refugees into jobs and homeless people into shelters, and boost exports (for income), energy (for fuel), and farming (food) industries.

Restructuring development pillars, while reforming policies, simply doubles the expected dividends. Keeping a Plan B for worse-case scenarios, all entry-points into the country, for example, could be fitted with medical facilities, even hospitals, a gesture that could be reproduced in our scores of special economic/export processing zones (SEZs/EPZs), as well as cantonments. Such independent domestic 24/7 bastions can easily cater to future pandemics, and by filling today's gaps, voting tax-paying public would be assuaged.

Crossing one costly but inevitable bridge, from manual to automated labour, is our due. Its pre-requisite of building upwardly-mobile value chains (new professions), also alerts us to a Bangladesh COVID-driven necessity: expanding health-care workers and nurses, as the tip of a far larger iceberg on service-sector jobs.

A developed-country (DC) future for a battle-scarred Bangladesh requires an ace-of-spade blueprint: groomed leaders with vision and facilitating policy mixes, delivered at the right time with the right kind of time-framework, both short-term, and long-term, and consistently shielded from job-market shocks. All else should be downhill.

 

Dr. Imtiaz A. Hussain is Dean (Acting), School of Liberal Arts and Social Sciences (SLASS) and Head, Global Studies & Governance Programme at Independent University, Bangladesh

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