“Corona” and the fall of “Global Village”

• Spread from Hubei in Wuhan late December 2019, took foothold in 14 countries in lesser than 30 days
• Now 187 countries across the world are affected, including Sri Lanka
• So far, the world has witnessed over 88,000 deaths due to COVID-19

Coronavirus or the COVID-19 virus travelled across the globe much faster and more conveniently than both “capital” and “labour” in this global neo liberal economy. Since it was first announced in late December as fast spreading in Hubei, Wuhan, COVID-19 took its foothold in 14 countries across the globe in less than 30 days from Asia to Europe, North America, Middle East and Australia. Now, 187 countries are listed as COVID-19 affected. Finding fault with countries for not being alert to the threat, the WHO Director General himself said, the spread is due to most countries not being serous enough in taking adequate preventive measures in time.
Accepting those explanations and excuses for this massive COVID-19 spread as the reason, the question that still remains unanswered is, “would it have spread this way, in the pre-1977 world, before neo liberalism stitched the world together to move capital and production across to the South?” I firmly believe it would not have. 

The world has witnessed epidemics from prehistoric times. In North-Eastern China, a prehistoric village that was wiped out by an epidemic 5,000 years ago is one of the best-preserved archaeological sites with mass burials, named “Hamin Mangha”. Another in the same region during that same period with similar mass burials is Miaozigou. Around 430 BC after a war with Sparta, City of Athens was plagued by an epidemic said to have accounted for over 100,000 deaths. In mid-14th Century, the first travelling epidemic recorded as “Black Death” travelled from Asia to Europe and is said to have devastated half of Europe. In the 16th Century, the “American Plague”, a cluster of Eurasian diseases including “Smallpox” resulted in the fall of Inca and Aztec civilisations. First Polio epidemic in 1916 broke out from New York city and accounted for 6,000 deaths in the US. The last epidemic recorded before WW II is the Spanish flu (H1N1) in 1918 to 1920. From prehistoric times 5,000 years ago, world records only 14 epidemics and no pandemics.

"Fallout from COVID-19 would thus be mass scale retrenchment and scaling down of all export manufacture in a shrinking global market. The apparel sector had a direct and indirect employment portfolio of nearly one million with about 80% women employed"

In this modern world, during the first 30 years when geographically demarcated Nation States dominated the world order, the two major epidemics the Asian flu (H2N2) and the Hong Kong flu (H3N2), did not travel across the globe as did other epidemics. 
Thereafter, in the past 40 plus years, we have on record most number of epidemics and pandemics in this neo liberal global economy travelling across the globe. Neo liberalism in this Southern hemisphere being inherently city centred created heavily populated urban centres with large migrant labour from neglected and left out rural areas. These big cities have all fallen prey to COVID-19 in almost all countries. Beginning from Wuhan, COVID-19 has toured the whole globe covering almost all mega cities in the 186 countries listed as affected by now. All massive urban centres like Milan, Madrid, Berlin and Munich, Paris, London, New York and Seattle, Sydney, Mumbai and Delhi have come to an economic and social standstill. 

The result is horrendous. Devastation of cities mean devastation of consumer markets. COVID-19 has basically dismantled the neo liberal global economy. Despite efforts by giant oligopolies to resurrect the global market through regional groupings like the G-20, EU, the ASEAN, African Union etc., most countries have begun turning towards their own national economies. Most of the EU countries are gradually tightening their borders. Though Indian PM Modi proposed a SAARC fund with 10 million Indian rupees for regional anti-COVID-19 co-operation, Indian economy is now looking for their own potentials to bounce back.  

Though Indian PM Modi proposed a SAARC fund with 10 million Indian rupees for regional anti-COVID-19 co-operation, Indian economy is now looking for their own potentials to bounce back. Indian pharmaceutical industry employs over 2.7 million people directly and indirectly in specialist, technical and skilled areas 
They have to. Their massive pharmaceutical industry employs over 2.7 million people directly and indirectly in specialist, technical and skilled areas including manufacture and R and D. It attracted over US$2 billion as FDI during the last three years (The Indian pharmaceutical industry – way forward / IPA, June 20, 2019). India served global demands with exports to around 200 countries with US as the key market. They supplied over 50% of the global demand for vaccines, 40% of the generic demand in the US and 25% of all medicines in the UK (India Brand Equity Foundation / February 20, 2020). Indian pharmaceutical industry lived totally on Active Pharmaceutical Ingredients (APIs) imported from China. With COVID-19, they are in a major conundrum. 

"COVID-19 has basically folded up the global market within two months. While our economy cannot even think of any more concessions to attract FDIs, even with concessions there will hardly be any investors coming to produce for a global market that isn’t actually thriving"

How can India face this with pharmaceutical exports that has always positively dominated their foreign trade income? Their major pharmaceutical manufacturers, are now turning around to produce their own APIs. In fact, till early 1990’s India was producing their own APIs, until major manufacturers turned to China for cheap APIs and expanded their capacities in formulation. Cheap APIs from China was what allowed India to compete in the global market. The immediate problem now is not about serving the global market. The global market itself is disintegrating. Now the problem is to save the industry to maintain their own healthcare, with hospitals and clinics served adequately and providing the needy with required medicine. No country can allow their citizens to go without medical care. Then comes millions of jobs in the industry. Majority are all skilled labour and they cannot fit themselves as Agri-labour in rural villages.

This tells us, our own post-COVID-19 crisis is in the making. Leaving aside all issues regarding governance, elections, Constitutional and legal provisions, we are stuck in a massive economic crisis. We were unable to service debts and had to appeal for moratoriums even before COVID-19 came on the scene. Even with EU’s GSP “Plus” and the US’ GSP as incentives for exports, our export manufacture including the much-touted apparel sector could not contribute more than one third of the cost of imports. That too, after all the State patronage offered in terms of tax holidays, tax concessions and infrastructure facilities provided from tax payer money during the past 40 years when the global market was vibrant despite the 2008 meltdown. COVID-19 has basically folded up the global market within two months. While our economy cannot even think of any more concessions to attract FDIs, even with concessions there will hardly be any investors coming to produce for a global market that isn’t actually thriving. In short, free market neo liberalism all past governments lived with, promising prosperity with FDIs and export manufacture is now fast coming to a dead end. 

Fallout from COVID-19 would thus be mass scale retrenchment and scaling down of all export manufacture in a shrinking global market. The apparel sector had a direct and indirect employment portfolio of nearly one million with about 80% women employed. Rest of the export manufacturing industries adds another one million making a total labour force of roughly two million with an unaccounted number employed through Manpower Agencies as daily paid contract labour. Towards the end of 2020, export manufacture will have to cut back on about 50% of their workforce, in a bid to survive with profits they plan to earn. These are all youth from outside Colombo district and the vast majority from rural society the free market economy had no interest in. Culturally, after many years of work in factories in an organised urban setting, they will not be able to get back to village life. There will thus be other social issues erupting anew in rural society with large scale unemployment of once employed youth.
Added to these numbers are those who will once again start drifting back from villages to the urban sector in search of income in the informal sector. Already the informal sector is showing signs of folding itself up much faster than it opened up. Thus, the informal sector too will not be able to provide incomes as it did during the pre-COVID-19 period. 

"The world has witnessed epidemics from prehistoric times. In North-Eastern China, a prehistoric village that was wiped out by an epidemic 5,000 years ago is one of the best-preserved archaeological sites with mass burials, named “Hamin Mangha”

Bottom line is, this regime in whatever form it continues, will have to forget the free market economy that has been shattered beyond repair. This “coronafied” free market economy now demands a serious national development programme, that would define what socio-economic and cultural development is. It would have to make certain the whole development process is inclusive from North to South and East to West. The question neo liberal economists, the affluent middleclass and the “filthy rich” would keep asking is, if not “free market” what next? 
Next, we would have to first agree on a definition for “inclusive development” for all. Agree on what type of a “development” we need to improve the quality and standard of life. Thus, it would have to be an “integrated national development programme” that would allow for a regulated and a guided “market”. It would have to modernise agriculture and facilitate greater productive use of cultivable land, with strict measures adopted for environmental safety and a “green canopy” that would not be less than that in 1991. In short, we would have to revisit the pre-1977 “import substitution” policy and redesign that economy to allow for private sector participation in a regulated market. This no doubt would make the affluent middleclass and the “filthy rich” grumble with disagreement. But post-COVID-19 life is not about free markets that breed and nurture mega corruption with luxurious opportunities for a selfish urban middleclass. Its now about making life worth living for the vast majority in comfort. That needs serious discussions on.