29 Apr 2020: The Hindu Editorial Analysis
1) No end in sight: On India’s coronavirus strategy-
If it took 94 days to reach one million novel coronavirus cases on April 3 after China reported the first cluster of 41 cases to WHO on December 31, the number of days needed to double to two million sharply reduced to 12.
It again took just 12 more days to cross three million cases globally on April 27 night. The virus has now spread to 188 countries/regions.
The true number of infections will be several-fold higher as most countries have not been testing people who have mild or no symptoms. For instance, in the U.S., the Centers for Disease Control and Prevention has said that those with mild symptoms of COVID-19 who do not meet the criteria for priority testing will not be tested.
While new cases have declined in Europe, there is an uptick(increase) in Africa and South America. The virus is still spreading quickly in the U.S. — with 0.99 million cases, it has the most number of cases globally, a little more than four times that of Spain, which has the second most number of cases.
There have been over 2.1 lakh deaths worldwide, with the U.S. again accounting for the most — over 56,600, which is double that of Italy — over 27,000. New York City alone has 17,515 deaths, which is multiple times higher than that of many countries. The mortality(death) figures too may be an underestimation(undervalued).
India has reported over 30,300 cases and 973 deaths, based on data collated from States. The number of cases has multiplied several-fold from over 600 since the national lockdown from March 25.
At nearly 8,600 cases, Maharashtra has the maximum in the country; Dharavi alone has 330 cases and 18 deaths. With a population close to 1,00,000 that lives cheek by jowl(close proximity), physical distancing is an impossible luxury.
A central team has indicated that nearly 3,000 people might need institutional quarantine in the absence of effective containment in Dharavi.
LEARNING FROM OTHER COUNTRIES:
In this context, India could look at the experience of Singapore. Much appreciated for its efforts in almost containing the spread of the virus early on, the city-state has seen numbers rising since late March.
Fresh cases have been reported from dormitories(small town or suburb providing a residential area for those who work in a nearby city) that house over 0.2 million migrant workers from other countries. The crowding in the dormitories, which is akin(related) to what is seen in Dharavi and other slums in India, has provided an ideal setting for easy infection spread.
Despite shutting down educational institutions and workplaces on April 3, when the number of cases was 1,114, and moving many workers to alternative accommodation and quarantining others, it has not been able to contain the spread; nearly 15,000 cases have been reported as on April 28.
As India nears the end of its extended lockdown, it needs to learn from the successes and failures of other countries. India must learn from other countries in devising strategies to contain the epidemic.
2) Signalling support: On RBI relief for mutual funds-
The Reserve Bank of India’s decision to open a special facility to ensure the availability of adequate liquidity(money) for the mutual fund industry is a timely move in signalling to investors that the central bank is alert to the need to preserve financial stability in these challenging times.
In assigning ₹50,000 crore exclusively for commercial banks to lend to mutual funds, the RBI made clear on Monday that it wants to tamp down(make it calmer or less intense) on any build-up of liquidity strains at mutual fund houses in the wake of heightened volatility(fluctuation) in the capital markets and increased redemption(recovery) pressures as a fallout of the COVID-19 pandemic.
A mutual fund is an open-end professionally managed investment fund that pools money from many investors to purchase securities. These investors may be retail or institutional in nature.
A capital market is a financial market in which long-term debt or equity-backed securities are bought and sold. Capital markets channel the wealth of savers to those who can put it to long-term productive use, such as companies or governments making long-term investments)
The proximate trigger for the central bank’s move was last week’s announcement by Franklin Templeton Mutual Fund that it was winding up(closing) six debt funds — funds that collectively had assets under management (AUM) amounting to about ₹26,000 crore.
The RBI has rightly recognised the urgent need to ward off(turn aside) any incipient(beginning to happen or develop) contagion impact from the closure of these six funds.
With the overall industry-wide AUM for debt funds at about ₹15-lakh crore, it was crucial for the banking regulator to reassure investors that liquidity need not be a concern while deciding on whether to retain or redeem(rescue) their investments in these mutual funds.
The Association of Mutual Funds in India (AMFI) had, separately, last week, sought to assure investors that a majority of debt fund schemes had “invested in superior credit quality securities” and had appropriate liquidity to back their normal operations.
BANKING INDUSTRY’S UNWILLINGNESS:
While the facility is a straightforward 90-day repo-based lending window from which banks can avail credit to provide loans to mutual funds, there are concerns about the banking industry’s willingness to expose itself to the credit risk involved in making these fresh loans.
That the RBI was cognisant(aware) of this is evident in the way that the norms have been tailor-made(made, adapted, or suited for a particular purpose) to incentivise(motivate) the banks to lend.
From allowing banks to breach their 25% ceiling on held-to-maturity investments as a consequence of lending to mutual funds, to exempting the support extended from banks’ overall capital market exposure limits, the central bank has sought to ease the flow of credit to the fund houses.
Still, if the recent experience of getting lenders to support the non-banking financial companies through a targeted long-term repo operation backed by ₹50,000 crore is any pointer, clearly the banking industry — beset by bad loans — appears to have little appetite for adding any credit that it deems risky.
(Held-to-maturity (HTM) securities are purchased to be owned until maturity. A company's management might invest in a bond that they plan to hold to maturity. As a result, there are different accounting treatments for held-to-maturity securities compared to securities that are to be liquidated in the short term)
Moreover, with the economy still in lockdown and the credit ratings of even relatively well-established companies facing a real and not-too-distant threat of downgrades, how willing banks would be to use this facility to lend to debt mutual funds remains to be seen.
The Centre may need to be ready to step in with direct intervention if the RBI’s gambit(plan) fails to ease the pressure on mutual funds.
3) A task for South Asia-
South Asia, one of the world’s most populous regions, is also affected by the COVID-19 pandemic. Both Karachi and Mumbai, among the world’s most densely populated cities, where we live and work, are being overwhelmed by cases.
While the death rate in these places may not be as alarming as in Europe and the U.S., the collateral(collective) damage of the lockdown is taking its own toll(damage).
While there are many differences amongst the countries of the region, there are also common features which impact the health of its people, some of them a result of our shared cultural and geopolitical history.
The collective experience of dealing with COVID-19 may provide important lessons, which transcend (be or go beyond the range or limits of) national boundaries.
POOR HEALTHCARE SYSTEM:
South Asian countries have invested very little in health. This is reflected in our abysmally(poor) low health parameters.
It is interesting that Britain, which formulated our health policies before independence, went on to form one of the world’s strongest public health systems, the National Health Service, whereas its South Asian colonies chose to stray(stay away) from that path. This resulted in a dysfunctional public healthcare system.
Governments have also relinquished (given up) what ought to have been their primary duty, of health care provision, to the private sector. Having become an industry, the focus of healthcare in the private sector is on profit rather than on people’s needs.
Whilst privatisation has brought in advanced technology and expertise, the high costs of treatment in the private sector have resulted in impoverishment(poverty) as most of the population has no insurance or third-party coverage, and pays out of pocket.
The sector has also been poorly regulated. The result is that it is responsible for several excesses(going beyond limit) in its quest(hunger) for profit.
Hunger, malnutrition, poor sanitation and large-scale migration are features of this region. Existing infectious diseases like TB, HIV and malaria have been worsened by emerging ones like dengue, chikungunya, healthcare-associated infections and antimicrobial resistance. The region is also an epicentre of an epidemic of lifestyle diseases.
Constant internal and external conflicts in South Asia not only consume a large portion of national budgets, but also divert the attention of the public and policymakers from healthcare needs.
Defence budgets take the largest share of national budgets, and obviously adversely(harm) impact social sector spending. Underfunded public health is going to hinder(prevent) our capacity to fight COVID-19.
Religion continues to occupy a central space in the society and politics of the region. Though it offers succour(relief) to many, religious dogma(teachings) can impact health policy and health-seeking behaviour.
The refusal of devotees across Pakistan to avoid religious congregations during Ramadan despite the government’s orders has significantly fed the community spread of the virus. On the other hand, the Tablighi Jamaat congregation(assembly) in Delhi was used to whip up(raise) sentiments against the entire Muslim population in India.
This will only put a further strain on the social fabric. The medical community must emphasise that religious practices cannot be exceptions to epidemic-control practices.
A SILVER LINING:
If there is a silver lining(something positive in a negative atmosphere), COVID-19 has forced us to seriously reflect on our healthcare system. This is welcome if it results in policy change.
Healthcare professionals and bodies must seize(capture) this opportunity to push our respective governments to address it seriously and not just as a pre-election strategy. A long-term commitment to universal health care, with not only a national but also a regional and global focus, is needed.
The SAARC heads of state have already offered help to one another. A regional strategy has a better chance of controlling the pandemic than isolated national-level efforts.
Pooling of resources and sharing data may not only help flatten the curve but perhaps even develop into longer-term efforts towards effective treatment.
It is being speculated that our populations are behaving differently; that the BCG vaccine may be a protective influence. Joint research into such areas can be a unifying point for SAARC.
The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia. Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
BCG vaccine is a vaccine primarily used against tuberculosis. In countries where tuberculosis or leprosy is common, one dose is recommended in healthy babies as close to the time of birth as possible)
The region’s healthcare community has many tasks. We have the responsibility of upholding science as the guiding principle of policy, of guarding against fake cures, unethical experimentation and quackery(magic like superstition).
We also have the onerous(difficult) task of convincing our people that regional conflicts fuelled(raised) by geopolitical interests are not in our mutual interest. This could even mean standing up to populist narratives on nationalism and reminding our citizens that the real threat to the security of our nations is our misplaced priorities.
It is in our collective interest to look at health security and not just national security. By the accident of their birth, South Asians have endured(faced) a lot. They merit(deserve) better.