GS PAPER II EDITORIAL
Calculating the benefits of lockdowns
Why in News
- Data show that as of now 26.2% of the world population has received at least one dose of a COVID19 vaccine. Of them, only 1% lives in low-income countries.
- By contrast, the richer nations, such as the U.S., Canada, Germany and Britain, registered above 50% vaccination by July 17. For India, the percentage of the adult population that has received at least one dose stands at 34.1% as of July 18.
- Several researchers have studied the effectiveness of the lockdowns in economic terms. It is important, therefore, to take stock of the issues that have materialized in this context.
- The discipline of economics or its dominant school at least, is intimately linked to tradeoffs and its fundamental teaching is that one cannot have one’s cake and eat it too.
- Draconian lockdowns help you to keep on living, but they prevent you from earning a living. With incomes drying up, essential expenditures such as those on food, health and education cannot be sustained, implying that life cannot be lived.
- Extreme lockdown policies imply that you cannot quite have your life and live it too — at least not meaningfully.
- The vicious trilemma needs to be torn down if humanity is to be preserved. This calls for a careful assessment of the severity of lockdowns, their costs, and the resulting gains they hopefully lead to in terms of lives saved.
- One needs to understand the nature of the tradeoff.
- The cost of a human life is priceless. In technical economic language, the monetary value of a human life is infinitely high. If this be so, saving a life calls for endless sacrifice. If such sacrifice assumes the form of extreme lockdowns, then the line of argument precipitates the trilemma all over again. It is counterproductive to start off with infinity.
- Some researchers believe this can be measured by the value of lost GDP. The Economist quotes the case of two European countries — France and Italy. Both imposed heavy lockdowns and suffered 3% shrinkage in GDP. Not that people did not die, but the 3% shrinkage cost of keeping a number of people alive was not insignificant.
- Similarly, Finland experienced a negligible rise in the mortality rate, experienced a 1% fall in per capita GDP.
- On the other hand, Lithuania performed miserably on its death rate front, but its GDP per person is expected to rise by 2%.
- Research says that, for every infected person cured in poorer countries, 1.76 children die on account of a fall in the quality of life, which is not enviably high even in the absence of lockdowns.
- This is worse than the trilemma scenario outlined earlier.
- There are other costs too that should not be overlooked. The horrors faced by migrant labourers in India will continue to jolt our collective memory.
- One wonders also if life expectancy itself has not been adversely affected in poor as well as emerging economies.
- Children are held back from school. One cannot rule out the emergence of child labour either.
- If and when the pandemic takes leave, researchers will surely address the child labour question in India caught in the iron grip of COVID19.
- The benefits of a lockdown, seen in isolation, do not appear to be all that clear. Lockdowns prevent the spread of the disease so long as they last.
- Mortality falls perhaps, only to resurface once the lockdown is lifted.
- For the U.S., a researcher has come up with the disappointing conclusion that there is no lifesaving impact of lockdowns at all.
The value of a human life
- There are many different ways in which the value of a human life may be calculated.
- A straightforward method is to study the life insurance premiums people are willing to pay to ensure proper treatment if afflicted by fatal diseases. In rich societies, large amounts will be paid. This could well be used to compute the social benefits of lockdowns, which will probably have higher values in rich societies than in poor societies where few are covered by life insurance.
- Further, all lives cannot command the same value. An aged person’s life has the same value as that of a younger person, means a person’s own valuation of his life may well differ from the way policymakers are likely to value it.
- Consequently, the social benefit of lockdowns continues to be a puzzle. This is not to suggest that lockdowns ought to be avoided.
- Quite clearly, they are unavoidable for now, but they need to be carefully designed, guided by tradeoffs between harsh and mild policies. Or else, the damaged economies of the world will not revive too soon.
GS PAPER II
Democratic Quad vs China’s Quad
Why in News
- Even as the sherpas of the Quad democracies (the United States (US), India, Japan and Australia) prepare for a summit of the top leaders in Washington in 2021, a rival quadrilateral grouping led by principal challenger China is in the making, with Russia, Pakistan and Iran.
- Fired by the hubris of the successful centenary of the Communist Party of China, Beijing has been plotting its next moves on the geopolitical chessboard, and countering Quad is one of them.
- Despite a complex and troubled past, in recent years, the China-Russia relationship has gone from strength to strength.
- The two define it as a comprehensive strategic partnership that can be turned into an alliance, if necessary.
- On June 1, the foreign ministers of China and Russia marked the 20th anniversary of the signing of the Treaty of Good-Neighbourliness and Friendly Cooperation.
- The treaty is viewed as a bulwark against the US-led West, and a pact of solidarity to perpetuate Sino-Russian pre-eminence and influence in world affairs.
- The two nations are neighbors and partners in the combat against Covid-19, and are deepening cooperation in trade, economy, scientific cooperation and technological innovation.
- Russia supplies energy resources to China and shares defence technologies; in turn, the Chinese provide capital, equipment and goods needed by the Russians.
- Lurking Russian suspicions that China seeks its territory in the Far East and the perception that Moscow has become a junior partner are troublesome, but these reservations are kept in check for the larger needs of this relationship.
- Western strategists are reflecting on ways to drive a wedge between Moscow and Beijing, but this is easier said than done.
- There is a convergence between the Russian and Chinese governments and strategic communities.
- The director of programmes at the Russian International Affairs Council (RIAC) stated in an interview with the Global Times, in March 2021 that, “Sino-Russian relations are still not an alliance, but they are more than a partnership.”
China’s relations with Pakistan
- Then there is China’s relationship with Pakistan, fueled by a shared hostility towards India, which are of a different level of depth altogether.
- In a joint statement on November 25, 2018, the two nations projected themselves as “good neighbours, close friends, iron brothers and trusted partners” with an “All-Weather Strategic Cooperative Partnership” from which Pakistan continuously draws political and economic dividends.
- China recognizes the central geostrategic location of Pakistan, and its value in keeping India pinned down to being only a regional player.
- Strategic congruence, economic benefits and close security cooperation make up this relationship.
- Its attempted collaboration to counter the “three evils” of extremism, terrorism and separatism should not fool anyone, except to signal that Islamabad refrains from any action that hampers China in dealing harshly with its Muslim minority.
- Since 2013, the China-Pakistan Economic Corridor (CPEC), with its generous package worth $62 billion covering projects in infrastructure, transport, energy, industry and agriculture, has become the centerpiece of the relationship.
- Experts, however, point out that lately, CPEC has lost some of its salience, as the Pakistan economy has failed to grow due to the absence of economic reforms as well as enhanced security challenges.
- Islamabad is now also enmeshed in working out its options in a post-US Afghanistan where it needs to reconcile its interests not only with China but also with Iran, Russia, Central Asian neighbours, and, to some extent, India.
- Pakistan will remain China’s steadfast partner, but given its long-standing relationship with the US, it will also be responsive to Washington’s overtures and offers of assistance in both the military and economic domains.
- China-Iran relations, marked by a shared hostility towards the US, are seeing signs of consolidation.
- In March, the two countries agreed to a 25-year commitment to enhance comprehensive economic cooperation.
- At the heart of this deal is China’s plan to invest $400 million in Iranian projects against a long-term supply of oil and gas to China.
- The Iranian foreign ministry clarified that the agreement contained a roadmap but not any contract, figure or exclusive rights to the other party.
- This agreement builds on President of China’s visit to Iran in January 2016 and the Comprehensive Strategic Partnership to support “their core interests” such as independence, national sovereignty and territorial integrity, and Iran’s commitment to the One China policy.
- On the US withdrawal from the Joint Comprehensive Plan of Action (JCPOA), China has strived to present itself as a firm upholder of Iran’s sovereignty and national dignity, and has called on the US to return to JCPOA.
- The $400-million investment plan can be Iran’s “insurance policy” for economic renewal if US sanctions continue and the US-China fight escalates.
- These three relationships are vibrant, but they are also vulnerable.
- The Russia-US summit in Geneva showed that Russia is willing to improve relations with the US (and the European Union) if their red lines are respected.
- Iran continues to be interested in JCPOA; if it materialises, this will increase US leverage.
- Steady friend Pakistan is unpredictable, but the army, the most powerful player, remains interested in measured normalisation with India.
- The task then for the democratic Quad sherpas is delineated, use all available levers to weaken China’s relations with its three partners.
- China’s potential Quad is flawed because it is founded on limited common interests and rivalries, and is not backed by compelling principles and values.
- The Quad of democracies should strengthen itself and their sherpas should watch China’s moves carefully.