Raking in profits as the world flounders is nothing but Insanity
Late last year, the head of the European Central Bank, Christine Lagarde, made a statement, as opposed to a warning, that the world’s debt would increase to $13 trillion to even begin economic kick-starts post-pandemic. That that was an understatement is becoming clear.
With governments scrambling between lockdowns and re-openings, touted vaccines suddenly no longer as reliable as originally stated, and the post-pandemic looking to be way ahead, no one knows for sure. For all the forecasting by economists and businesses, optimism seems to be dimming. It calls into question all the sciences, the learnings, and politics.
The popular view that politics “makes strange bed-fellows; that “there’s no last word in politics” and is grossly notorious for “horse-trading” -- these have never reached the stage of truism as today. Republicans are opposed to the $1.9 trillion stimulus that Joe Biden wants. Just as former president Donald Trump’s additional support package was sacked down, this too is heading towards a similar state.
The people’s elected representatives would seem to be going against the US population’s general views. Both these proposals have built-in allocations for spending that many argue have little connection with stimulus. In the UK, the seven years of austerity that Boris Johnson’s government pledged to come out of has had its achievements (or not) wiped out, putting the country into greater debt than before.
Labour is arguing for more spending by the government, and for once the conservatives are grudgingly consenting. The European Union countries, having suffered economic distress prior to the arrival of Covid-19, now has powerhouse Germany hitting a downward slide in GDP.
India’s economy, reeling in the face of a slump in all sectors of the economy, has declined further and is preparing for more dole-outs to keep the wheels moving.
It’s the Chinese who have proved to be the resilient stand-out. Its diversified and cheap export basket is chugging along, albeit not as fast as it had before, and innovative steps such as Huawei moving into pig-farming highlights their progressive thinking. Before that, while the ambitious spent money in useless wars, China had been probing ahead with steadying its economic clout all over.
The ace act has been the signing of a trade-pact with Asean that will provide fuel to its burgeoning factories. All of this might sound strange in times of new economic thinking, but the fact remains that the world was initially unwilling to accept and therefore unable to act effectively and quickly enough. No one had any plan, let alone plans B and C.
Countries already in dire debt have swiftly called for waivers or rescheduling. This, of course, before they ask for more funds. There are states that are tottering of their own volition, namely, spending in the wrong places, not utilizing revenue potential, and crass corruption. Third World countries are now getting the bad end of the banana.
Waiting for the first batch of vaccines to be sent their way, they have no option to pick and choose. Dr Antony Fauci had been cynical of the efficacy of the AstraZeneca vaccine due to processes not having been followed. He was stilted when he re-worded his cynicism. The UK may have gone full tilt ahead, but the EU has remained steadfast on over-65s receiving the vaccine.
South Africa pondered over sending back the lots it bought from India’s Serum Institute, and then decided to supply them to Zimbabwe even as it began using Johnson and Johnson’s version. Bangladesh too had no options as so vividly portrayed by the ire of the EU over delivery delays by Pfizer.
The pharma giants cannot have excuses for not unitedly having planned for excess production. They had both time and opportunity. Pfizer was too busy chuckling over the $15 billion profit that they would make.
That the pandemic would affect all forms of vocations had been clear early on. Yet the FAO, the WFP, and individual countries were caught off-guard in ensuring the continuity of the essential products required to sustain an already helpless citizenry. Third World countries are facing price-spirals of food and essentials and as they look towards imports, the export markets too are running short. Stocks maintained have been depleted by governments pulling out the stops to maintain supplies. In the developing world, food-bank lines grow longer.
Quietly the world’s billionaires, some 2,500 of them have grown 23% richer through a combination of owning individually or collectively all the sectors that have been called on for resources. Ms Lagarde and politicians might well think of imposing a sin tax on such individuals. After all, raking in profits as the world flounders is nothing but insanity.
Mahmudur Rahman is a writer, columnist, broadcaster, and communications specialist.