By Arun Srivastava
The head of World Food Program David Beasley cautioned the UN Security Council last week of the hunger pandemic that the world was facing. He warned that this could push the global fraternity to “multiple famines of biblical proportions” within a few months if immediate action isn’t taken. What was most significant was he went upto predicting that at least three dozen countries would face acute famine.
The world has already started feeling the pinch of the famine like situation with companies and industries expressing their helplessness in supporting their workers and staff. But what is shocking is most of the governments, even the capitalist countries are not willing to confess this brute reality and continue to claim that the general health of their economy was in good condition. They are telling the lies and only lies.
Initially, just after the pandemic broke out the countries tried to hide the true fact from the global fraternity and more from their own people. They concealed the real information for the reason that it would erode their credibility and smear their image. The politics of masking the fact was compelled by the administrative concern. This was nothing but purely an attempt to mollify the frustration and anger of their people and keep their supporters in good mood.
Beasley has particularly cautioned the richest nations with a critical message: the coronavirus pandemic is not only affecting your economy but is impacting the economies of vulnerable and conflict-torn countries where millions of people will face starvation if you cut the UN agency’s funding for food. “If we have money and access we can avert famine and we can truly avert catastrophic humanitarian death from starvation, but if we lose our funding, or we lose supply chain, there’s going to be disaster.” he added.
Beasley said; “our analysis shows that 300,000 people could starve to death every single day over a three-month period and that doesn’t include increased starvation due to the new coronavirus. In a worst-case scenario, we could be looking at famine in about three dozen countries, and in 10 of them there are already more than 1 million people per country on the verge of starvation.”
In fact similar apprehensions have been expressed by noble laureates Amartya Sen and Abhijit Banerjee including famous economist Raghuram Rajan. In an article they pointed out: “We in India worry a lot about the possible missteps that can happen in the implementation of large-scale transfers; the money (or the food ) may end up in the wrong hands, some intermediary may get rich at the expense of the taxpayer. As it becomes clear that the lockdown will go on for quite a while, in a total or a more localized version, the biggest worry right now, by far, is that a huge number of people will be pushed into dire poverty or even starvation by the combination of the loss of their livelihoods and interruptions in the standard delivery mechanisms.”
Unfortunately it does not appear that the Modi government has taken these signs and suggestions seriously. Its careless handling of the crisis simply underlines that it is using the present crisis with an eye on the future political gains. After 50 days of the coronavirus crisis his government took the decision to transport the workers stranded in various states. The national lockdown has been in place since mid-March but instead of witnessing a decline the number of deaths from the virus has been on rise. The rise in the number of positive cases has been the matter of concern.
Though the doubling period for the disease in case of India is comparatively better, the fact cannot be ignored that it has been consistently on rise. True enough the doubling rate of some other western countries, particularly the capitalist which suffered serious virus attack till a fortnight back, has been better than India. Most of the affected people belong to the working force.
According to the CMIE studies COVID-19 crisis has led to a spike in the country’s unemployment rate to 27.11% for the week ending on May 3, up from the under 7% level before the start of the pandemic in mid-March. Joblessness which has already acquired scary proportions for last few years has attained a new dimension during the corona crisis. Already more than 1 crore hands in domestic circuit have lost their jobs. Jobless people coming from abroad are raising the level of loss. Even government data confirms unemployment rising in the country.
The Mumbai-based think tank said the rate of unemployment was the highest in the urban areas, which constitute the most number of the red zones due to the COVID-19 cases, at 29.22 per cent, as against 26.69 per cent for the rural areas.
Analysts have been warning about the spectre of unemployment ever since the country was put under a lockdown on March 25 by Prime Minister Narendra Modi to arrest the spread of the virus infections.
Lockdown continuing till mid-May is expected to put 32 million livelihoods at risk and swell non-performing loans (NPLs) by seven percentage points, resulting in the economy contracting sharply by around 20% in the first quarter of fiscal year 2021. According to the report by leading management consulting firm McKinsey and Company, the cost of stabilising and protecting households, companies and lenders could exceed Rs 10 lakh crore, or more than 5% of GDP in such a scenario.
The report, ‘Getting ahead of coronavirus: Saving lives and livelihoods in India,’ said that restarting supply chains and normalising production and consumption can take three–four months. According to an estimate not less than 40 per cent of the daily wage earners who returned to their native places, are in the bracket of starving people.
If the lockdown continues for additional two–three weeks in Q2 and Q4 FY 2021 because of virus resurgence, it could mean an even deeper economic contraction of around 8 to 10 per cent for fiscal year 2021. A majority of the owners of the MSME companies have joined the rank of job losers. They are facing the acute solvency risk. IN this backdrop the unwillingness of the government to evolve a financial package has really been shocking. Given the magnitude of potential unemployment, business failure and financial-system risk, a comprehensive package of fiscal and monetary interventions may need to be planned.
The Union government may disburse a substantial amount of fund from the PM care fund to the MSME. A revival of small business in this segment would be of immense help in salvaging the crisis. Migrant workers fleeing urban centres like Delhi and Mumbai has only confirmed the long-held concerns on their employment as the economic activity came to a grinding halt. So far all the government announcements of income and food support to the vulnerable people has proved to be a simple hoax. As usual a group of termites including politicians and bureaucrats have been active siphoning off the money.
CMIE’s weekly series of data pointed to a steady increase in unemployment since the start of the COVID-19 pandemic in India, with the week to March 29 showing the sharpest spike to 23.81 per cent. As per CMIE’s data, the monthly unemployment rate in April stood at 23.52 per cent, up from March’s 8.74 per cent.
India is not only facing the health pandemic but also a humanitarian catastrophe. Crores of poor have been being pushed to the brink of starvation, with the spectre of famine a very real and dangerous possibility. The workers, the creators of prosperity, are surviving on virtual alms. Around 821 million people go to bed hungry every night all over the world and the new Global Report on Food Crisis published a couple of days back shows, there are a further 135 million people facing crisis levels of hunger. The World Food Programme analysis shows that, due to the Coronavirus, an additional 130 million people could be pushed to the brink of starvation by the end of 2020. That’s a total of 265 million people.
Lockdowns and economic recession are expected to lead to a major loss of income among the working poor. Overseas remittances will also drop sharply in coming months. Already rising unemployment as a result of lockdowns has severely diminished people’s purchasing power, driving down demand for higher quality products amid rising food prices and a lack of agricultural labour. It cannot be ruled out that the virus would create the conditions conflicts as it erodes livelihoods and spreads fear. (IPA Service)