The associated risks can come from (i) rising Oil prices, (ii) rising interest rates due to fiscal deficit, and (iii) synchronous global market correction as US multi-year economic expansion is behind India.

Bond Interest Rate and the Stock Market

In the month of February, the bond investors were revolting against the bond market interest rate. As a result of which reflation (stimulating the economic output by means of fiscal stimulus or reduction in taxes)- the guiding light of treasuries betting on rebounding growth is proving to be resilient. Long-term Treasury yields touched the highest in almost a year, the market stumbled on the expectations of inflation that accelerated to the fastest pace since 2014 and the yield curve reached the steepest levels in more than 5 years (Bloomberg, 2021). 

The reflation trade paused for a while after the government press release on 10 February showed the consumer-price inflation to be revolving around 1.4% annually, which was lower than expected. According to Michael Pond, global head of inflation strategy at Barclays, the CPI report was a disappointment as it doesn’t change the outlook of investors and there is no expectation that it will change investors’ views about expected inflation (Bloomberg, 2021).

Hence the theme of reflation is based on a story about where inflation will move once the majority of the citizens are vaccinated and demand normalisation. 

Does a Change in the Federal Reserve Interest Rate on New Bonds Stimulate the Indian Market?

After Joe Biden swearing as the 46th US President and taking over his role in the White House, the Fed, the central bank of the US has been closely involved in changing the interest rates on new bonds in the month of February. For an emerging economy like India, these changes have a significant effect. The India investors whose speculations are based on the daily movements in the world stock markets are of the view that the decision of the Fed to decrease the interstate rate on bonds will be welcomed by the citizens as the economy struggles to revive from the COVID-19 pandemic. The ultimate goal is to infuse liquidity in the market so that citizens have cash in their hands which will help to pull up the demand in India. 

The Fed expected its interest rate to be close to zero and signalled that it will remain close to zero in many years to come. This is a part of a long-term strategy that the Fed adopted in the year 2020 that proved to be helpful while navigating a world of persistently low-interest rates that makes it difficult to hit its 2 percent inflation goal (Reuters, 2020). 

A sharp increase in demand as Covid-19 inoculations allow more of the economy to reopen could push inflation above the Fed’s 2 per cent target. If markets push up long-run interest rates a bit to reflect expectations for future faster growth, the Fed likely wouldn’t change course. That’s consistent with the new framework if the economy hasn’t achieved sustained 2 percent inflation by then (Reuters, 2020).

RBI Having a Tough Time in Keeping a Check on Bond Yields

After the release of Union Budget 2021, RBI is under constant pressure to keep the traders of bond calm. Although a higher fiscal deficit was expected, it rose to 9.5% as a percentage of India’s GDP for FY21 and is forecasted to touch 6.8% in FY22. A higher fiscal deficit came as a daunting news for the bond market which led to a surge in bond yields. 

There is an estimate made that the market borrowing of the central government will be at Rs 12 lakh crore in FY22. There is an increased supply of government bonds in the market that could lead to a demand-supply gap, thus putting pressure on yields. The investors in the government bonds are receiving higher yields thereby causing a similar demand on corporate bonds (ET Contributors, 2021). This leads to a rise in borrowing cost for corporates, thereby negatively impacting private investments in the country. In addition, higher bond yields further complicate the transmission process of the rate cut by the central bank (ET Contributors, 2021).

The responsibility now falls on the shoulders of RBI to keep a check on bond yields. In the last bi-monthly Monetary Policy meeting (MPC), there were no announcements made in this regard. As the economy is currently recovering from a recessionary phase, the phase of increase in inflation is getting stronger (ET Contributors, 2021). 

Thus given the current circumstances, RBI would be having a tough time in keeping the check on yields. The central bank has to deal with two-fold problems: on one hand to check the inflation while on the other hand has to handle the market borrowings from both the central and state governments. RBI needs to actively participate in the bond market and communicate well with the market participants in order to ensure that the bond yields are in check. 

Pandemic Fatigue Leading to a Fear of Lockdown

As news around the second wave, COVID-19 pandemic in foreign countries like UK, US, Australia are reaching the Indian households, residents are in a fist that there might be phased lockdown across the states in India. Several states like Maharashtra, Uttar Pradesh, Gujarat and Kerala are recording a spike in COVID-19 cases again which is directing the state and central government to impose night curfews in these states. Cities like Mumbai, Pune, Amravati, Aurangabad, Ahmedabad are already observing night curfews due to a rapid hike in COVID-19 cases. 

In a recent report released by Union Health Ministry, the primary reasons for the growing number of cases in few states were reported as – COVID inappropriate behaviour due to “lack of fear of disease”, pandemic fatigue, missed cases, super spreading events and crowds due to recent gram panchayat elections, marriages, reopening of schools, and crowded public transport.

The Recent INR-USD Change

The US Dollar to Indian Rupee Exchange Rate measures the ratio between the US Dollar and the Indian Rupee. Exchange Rates can be used to measure the relative health of an economy versus another. Exchange rates are also important in corporations that operate worldwide because they will directly impact their financials (YC, 2021).

US Dollar to Indian Rupee Exchange Rate is at a current level of 73.92, up from 72.74 the previous market day (February 25, 2021)  and up from 71.65 one year ago. This is a change of 1.62% from the previous market day and 3.17% from one year ago (YC, 2021). 

F&O Cues

F&O stands for Future and Options. These are the major types of stock derivatives traded in a share market. These Derivatives are the financial instruments deriving their values from an underlying such as currency, gold, or the stocks of a company.

Such contracts try to hedge market risks involved in stock market trading by locking in the price beforehand.

• Nifty February futures ended at 15,195; premium of 22 points 
• Nifty February futures add 1.2% and 1,745 shares in Open Interest
• Nifty Bank February futures ended at 35,854; premium of 102 points
• Nifty Bank February futures add 4.3% and 2,621 shares in Open Interest 
• Nifty Put-Call Ratio at 1.48 Out of F&O Ban: Sun TV Stocks In F&O Ban: BHEL, SAIL 

Brief on FII and DII Trading Activities during February 2021

Foreign Institutional Investors (FII) is the term used for investors who belong to foreign lands and are interested in putting their money in the Indian stock market. These are available in various forms such as mutual funds, investment trusts and pension funds. Domestic Institutional Investors (DII), on the other hand, refer to the investors belonging to India who invest their money in the Indian stock market. This comprises domestic mutual funds, banking and financial institutions, insurance companies and domestic pension funds (Dhanorker, 2020).

Indian stock market attracts millions of investors annually. These investors are primarily driven by institutional money. Both FIIs as well as DIIs constitute the major part of liquidity in the stock market. Therefore the effective tracking of their inflows and outflows are helpful in forecasting the broader trends in the markets. FIIs are believed to have a greater influence on the domestic markets along with the sustained flows from DIIs (Dhanorker, 2020). The countries which constitute a major portion of FII inflows into India are listed below. 

The performance of FIIs and DIIs have been carefully traced to meet the expectations of the investors during the month of February 2021. One of the primary reasons behind this is that the year 2021 will mark the arrival of the COVID-19 vaccine followed by the economic recovery that will see the Indian government taking stimulus measures to cope with the weak performance of the Indian economy during the COVID-19 pandemic. So it becomes of utmost importance to keep a track of previous FII and DII trading activities. 

The above table shows the trading activities of FIIs and DIIs from December 2020 to February 2021. There has been a continuous increase in the gross purchase of FII from Rs. 182 crores (approximately) in December 2020 to Rs. 223 crores (approximately) in February 2021. The gross sales of FII also increased from Rs 134 crores (approximately) in December 2020  to Rs. 180 crores (approximately) in February 2021. This increase was sharp for the month of  January and February because of the speculations surrounding the foreign investors due to the successful release of the COVID-19 vaccine and vaccination of common citizens which ultimately registered a steep increase in the net purchase/sales for the FIIs. 

Similarly, DIIs showed an impressive improvement in their performance as their gross purchases increased threefold from Rs. 84 crores (approximately) in December 2020 to Rs. 104 crores (approximately) in February 2021. Due to the restrictions on the movement across the borders and closing of the economies worldwide, the domestic investors started putting their money in the Indian stock market as a result of which the gross purchase increased. However, the gross sales had reduced from December  2020 to January 2021 2020 but increased during February 2021. 

Conclusion

In my opinion, the COVID-19 pandemic in 2020 delivered some of the greatest shocks to the global economies since World War II. The entire economies have been locked down and people adjusted to the new ways of working, studying and socialising. There are millions of people who have lost their jobs and became unemployed as a result of which inequality and poverty soared. The globalised economies acting as lifelines to billions of people worldwide has suddenly become vulnerable, owing to the disruptions of the global supply chains and government strategies to protect domestic stock market. Given the persistence of COVID-19, the recovery in 2021 will largely depend on how effectively the vaccine is distributed and how the various industry stakeholders reacted to the Union Budget 2021-22. The multidisciplinary robust approach will be required to mitigate the ill-effects of the pandemic and to address longer-term challenges posed by climate change. For this current and former political leaders, scholars, academicians, senior policymakers should provide exclusive analyses of the tasks that lie ahead in order to ensure that we are ready to meet the forthcoming challenges. 

References

Bhise, R. (2021, February 11). February 2021 Stock Market Outlook. investment shastra. https://www.moneyworks4me.com/investmentshastra/february-2021-stock-market-outlook/

Bloomberg. (2021, February 14). Bond market reflation trade absorbs punch to extend 2021 advance. Economic Times. https://economictimes.indiatimes.com/markets/bonds/bond-market-reflation-trade-absorbs-punch-to-extend-2021-advance/articleshow/80906847.cms?from=mdr

Dhanorker, S. (2020, June 29). What stocks are FPIs, FIIs and DIIs buying and selling? Economic Times. https://economictimes.indiatimes.com/wealth/invest/retail-investors-urged-to-stay-away-from-gamestop-inspired-communities/articleshow/80663373.cms

ET Contributors. (2021, February 18). Why is RBI having a tough ride in keeping bond yields in check. Economic Times. https://economictimes.indiatimes.com/markets/bonds/why-is-rbi-having-a-tough-ride-in-keeping-bond-yields-in-check/articleshow/81088372.cms?from=mdr

Reuters. (2020, December 16). Fed will be tested in 2021 as vaccines boost US economic outlook. Economic Times. https://economictimes.indiatimes.com/markets/stocks/news/fed-will-be-tested-in-2021-as-vaccines-boost-us-economic-outlook/articleshow/79751536.cms?from=md

YC. (2021, March 7). US Dollar to Indian Rupee Exchange Rate 73.92 INR/1 USD for Feb 26 2021. Charts. https://ycharts.com/indicators/us_dollar_to_indian_rupee_exchange_rate_h10

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Nevertheless, such a political crisis is not new to the country. Italy has always been at the centre of political turmoil for decades. It is quite evident with the fact that the country has seen about 60 governments since WWII. Conte and Renzi’s drift has been known to the public for a long time, and hesitation escalating was very much anticipated. So far, the drift was kept at bay by this centre-left coalition due to the coronavirus emergency. However, the pandemic situation has also now escalated, and it seems that it outlasted the political goodwill. [2]

Why Did the Problem in Italian Politics Start?

The reason for this drift started due to the approach of Conte and Renzi concerning financial matters. [3] Back in 2020, the GDP of Italy slumped by about 10% due to COVID-19. [4] Adding on to that, was a stimulus package that was given by the European Union (EU) worth €750 billion that was allocated to several EU nations. In July 2020, Italy was allowed to get the lion share of the EU stimulus package, amounting to over €200 billion (about $243 billion) in a grant and low-interest loans. [5] Because of such loans, Italy is now the second most debt-ridden economy after Greece. [6]

For weeks, Matteo Renzi had criticized the plan laid out by Conte to use the EU funds to use these handout purposes and less on serving the health needs. Even when the plan was improved on Tuesday night as per the request, Matteo Renzi was still not satisfied. Finally, the usage of €200 billion worth of that package was approved during the night of about 12th and 13th January 2021 by the lawmakers. However, the lawmakers of the Italia Viva abstained from voting on it. Also, two members of resigned including Elena Bonetti, the former minister for family and equal opportunities.  Both Conte and Renzi have a different opinion on how this recovery money given by the European Union should be used.

It increased the difference between Renzi and Conte, as the issue became a matter of political vote bank and both the centrists are competing for the same voters. [7]

Matteo Renzi’s move has been met with a mixed response, ranging from anger to confusion to chaos. One opinion poll even suggested about 70% of the Italians feel that this move by Renzi is not due to the difference of opinion, but rather for his political gain. Some experts also state that this move by Renzi may be due to him being side-lined by the coalition in recent times. [8] So, Renzi was doing nothing but using this opportunity to improvise on his political gains.

However, on Wednesday, Renzi argued in a news conference that dealing with the pandemic also meant “solving problems, not concealing them,” He has taken issue with Conte’s strategy for rebuilding Italy’s tattered economy.

Nonetheless, it cannot be denied that Matteo Renzi is a very well-known political figure in Italian politics and holds an even more crucial role in the current government headed by Giuseppe Conte.

Why Renzi Is Crucial to the Italian Government?

Italia Viva was formed by Matteo Renzi in September 2019, after he quit the centre-left Democratic Party. After the populist right-wing League Party’s departure, Renzi and his party played a significant role in forming the coalition government by Conte. The coalition government comprises the centre-left Democratic Party, Five Star Movement (MS5) and the left-leaning parliamentary group called Free and Equal.

According to recent polls, even though Renzi has only 3% public support, his party Italia Viva has 30 lawmakers in the lower house and 18 lawmakers in the upper house, thereby making them a junior coalition partner.

Way Ahead

Renzi had elected as the Prime Minister in 2014. So, he understands how the situation prevails while on that post and how politics needs to be done to rule the state. Not only that, but he also has been known for mediating conflicts among parties having varied political inclination- ensuring that the far-right parties are out of power by making sure that a coalition is created between populist and centre-left parties. 

With the decision of Renzi, there are only a few alternative options that can be viable for moving ahead in this situation. First, that Conte and Renzi come to a compromise by keeping the current coalition government. In other words, without escalating the situation, Conte needs to convince Renzi to support the government. It is still possible as Renzi is still. However, if this does not happen, the country would be on the brink of losing a government in the middle of a pandemic. Alternatively, the Conte government can go through a no-confidence motion. If he loses, the situation of Conte’s government will be like Schrödinger’s cat. In other words, Conte would only be left as the caretaker of the government, and he would also not have much power over Renzi. However, a coalition is still possible. After all, with a lack of public support, Renzi would not want to put his 48 lawmaker seats at risk. Nonetheless, if this not, the situation may move ahead in a different path.

Second, if the coalition government does not move ahead, then considering the pandemic, a government of national unity will be sought to be created by President Sergio Mattarella.

Third, the country could go ahead with the national vote. It would mean that the country may end up going into an election right in the middle of the pandemic. In case of an election, either Conte would win the third term as the Prime Minister, or the far-right wing parties would form the government. The far-right in Italian politics comprises of the League Party and the Brothers of Italy. They have been gaining support for the past few years and hold about 40% of the electoral vote. So, in case an election happens and the far-right wins, then there Italy will have the most anti-European government in Western Europe. [9]

In this way, one can state that Italy is currently in such a political situation that it will not be suitable for the nation if escalated. [10] Hence, sorting out the differences is the best possible way out of this situation.

References:

[1] Italy – COVID-19 Overview – Johns Hopkins. coronavirus.jhu.edu/region/italy

[2] Harlan, Chico. “Italy’s Government Falls into Chaos, Further Complicating the Covid Response.” The Washington Post, WP Company, 13 Jan. 2021, www.washingtonpost.com/world/europe/italy-government-renzi-conte/2021/01/13/dd65f6bc-55c6-11eb-acc5-92d2819a1ccb_story.html.

[3] Roberts, Hannah. “Italy’s Coalition Fights for Control of EU Recovery Cash.” POLITICO, POLITICO, 5 Jan. 2021, www.politico.eu/article/matteo-renzi-giuseppe-conte-coalition-government-recovery-fund-cash-coronavirus/.

[4] Amaro, Silvia, and Sam Meredith. “Italy’s Government in Crisis after Former PM Pulls Support for Ruling Coalition.” CNBC, CNBC, 13 Jan. 2021, www.cnbc.com/2021/01/13/renzi-italys-government-in-crisis-after-former-pm-pulls-support.html.

[5] Speak, Clare. “How Italy Plans to Spend €209 Billion of EU Money.” Thelocal.it, 17 Sept. 2020, www.thelocal.it/20200917/more-growth-lower-tax-for-families-italy-sets-out-plan-for-spending-eu-recovery-fund.

[6] Samuelson, Robert. “Opinion | Why Italy’s Debt Matters for Everybody.” The Washington Post, WP Company, 24 May 2020, www.washingtonpost.com/opinions/why-italys-debt-matters-for-everybody/2020/05/24/12b2f310-9baf-11ea-ac72-3841fcc9b35f_story.html.

[7] Roberts, Hannah. “Italy’s Coalition Fights for Control of EU Recovery Cash.” POLITICO, POLITICO, 5 Jan. 2021, www.politico.eu/article/matteo-renzi-giuseppe-conte-coalition-government-recovery-fund-cash-coronavirus/.

[8] Bozza, Claudio. “Sondaggio: Crisi Di Governo Incomprensibile per Un Italiano Su 2. E per Il 73% Renzi Persegue i Suoi Interessi.” Corriere Della Sera, Corriere Della Sera, 13 Jan. 2021, www.corriere.it/politica/21_gennaio_13/crisi-governo-italiano-due-non-capisce-motivi-il-73percento-renzi-persegue-suoi-interessi-59b0ac42-5515-11eb-89b9-d85a626b049f.shtml.

[9] Zampano, Giada. “Giorgia Meloni Is Rising Star on Italy’s Far-Right Stage.” AP NEWS, Associated Press, 18 Oct. 2019, apnews.com/article/fa37b62daab246f2a9ccb0887284aaee.

[10] “Italy’s Government in Crisis after Junior Coalition Partner Quits.” Euronews, 13 Jan. 2021, www.euronews.com/2021/01/13/italy-s-government-close-to-collapse-amid-row-over-covid-recovery-cash.

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Current Situation

Over time, the process was expected to create a robust global economic powered by the mutual economic and social cooperation. However, this expectation soon became a distant concept as the world’s economy struggled to overcome disturbances caused by a number of political and economic setbacks that permanently disturbed the socio-economic fabric of society. Most recent of these events being the novel Coronavirus. The crises we face today is unlike any other we have experienced earlier, forcing us to question the existing international systems, and with that the concept of globalisation. On the other hand, there are those that have come to coin the present situation as, ‘Globalisation’, signalling a return to globalised world post the pandemic. There exists no doubt about the fact that the Globalisation has connected not only industries and business, but it has done away with social, economic and political borders, that has allowed for the free flow of intellect, capital and resources. While this has acted to the benefit of many nations, a number of people have been extremely vocal about the fact that the process has enhanced the vulnerabilities of nations by making them over-dependent on the global supply chain. Loopholes and drawback of this nature have been further highlighted by the COVID 19 pandemic, as underdeveloped and developing nations have been left struggling to meet the demand of essential items such as masks, sanitisers and medicines. In the past few months itself, we have recorded a 13-32% decline in merchandise trade, a 30-40% reduction in FDI and 44-80% reduction in International air travel. 

Future of Globalisation

Seeing the present situation, that has resulted in a major role back on the gains made by globalisation in the previous two decades and a fundamental collapse of the international market integration, many have come to envision the world in the post-pandemic days. The most obvious answer to these questions seems to be that, leader shave to plan for and shape a world where both globalisation and anti-globalisation pressures remain enduring features of the business environment. 

It is too early to say, if whether the world is done and dusted with the concept of Globalisation. However, recent statistics and forecasts, predict that the concept should be in currency following the end of the pandemic. However, the nature of the same might be different from what we have experienced previously. The pandemic that had a universal impact, left all national economies in shackles, then whether it be the United States or some of the richest European nations. The economic recovery has been the top priority for all countries. However, such robust economic growth can only be pursued once the pandemic has been brought under control. Viewing the economic trends prior to the pandemic, it is clear that globalisation is an important agent in the growth and health of nations. Countries higher up in the DHL Global Connectedness Index tend to record faster economic growth. There is well-founded evidence to the fact that well-connected countries have a more advanced medical system, making them less susceptible to infectious diseases and put them in a better place to deal with the same. This goes to show that the negatives of globalisation, can just as easily be turned into positive contributions, by investing in health, growth and international cooperation. 

Global Growth

The COVID 19 pandemic has added fuel to the fire, by further destabilising an already fractured world. The pandemic introduced new levels of complexity, an example of which is the national restrictions and differing government response policies, which have further highlighted the differing ideological grounds. However, it is but natural to assume from here on forth that the global socio-economic environment will be driven more by factors based on regional competition, domestic self-sufficiency and when it comes to transnational companies and organisations, the country of their origin will decide the nature of policies they will adopt. Even as the lockdown restrictions have begun to ease we have seen that short distance and domestic trade have recorded a stronger comeback than international trade, hence the importance of regions should not be underplayed and the possibility of stronger domestic and regional trade flows should not be completely forgone while envisaging a new world order.

Technological Advancements

As the pandemic disrupted the status quo, forcing us to adapt to and adopt new ways, it invariably led to the creation of new technology and adoption of e-commerce, videoconferencing and robotics. Before we were faced with the challenge of dealing with a world pandemic, it was a commonly held belief that strides in technological development may not lead to an increase in global flows. However, recent times are a complete antithesis to that belief, as the cross border, e-commerce has come to expand export opportunities for smaller companies, and forced experimentation with remote work could spur more service offshoring. In planning ahead, for the post-COVID 19 scenario, business leaders have to think creatively by taking a structured approach to consider both internal and external implication. For most companies, technological trends should lead to more globalisation in some areas and less in others, rather than a uniform shift in one direction or the other.

Public Perception

Public Opinion towards globalisation has taken a hit, calling back the strong support trends as international trade and immigration had received in the last two decades in particular. The fact that international travel has led to the spread of the virus and the increasing economic stress has resulted in trade protectionism, politicians have used this in their favour to consolidate support against globalisation and the evils that it has introduced into our polities. In these uncertain times, citizens and more important customers and employees have turned to corporate leaders to make a statement regarding globalisation. The rise of anti-globalisation and anti-capitalist movements, as the virus spreads globally has further complicated the role of businesses in the public debate about globalisation. The need of hour requires us to focus on the real economic contributions and how they can help support a healthier form of globalisation. 

Conclusion

A tremendous challenge lies ahead of us, to transform the current world order by regulating and weakening the burdens of globalisation. As the days have passed it has become clearer to us that we have to create a mechanism to respond to diseases through effective international cooperation, without retreating back to the evil of ethnocentrism. Covid-19 effect on the globalisation can be seen more as a bend, rather than a permanent break. Attention to the drivers of globalisation, can lead and navigate companies through and even profit from the turbulence. It is now that the value of globalisation in the form of international cooperation can be portrayed to ensure a suitable and stable future.

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Past Challenges

The economic and social exploitation of the continent’s resources for decades along with horrendous violence and poor administration by corrupt leaders leading to widespread poverty and untimely deaths, which could have been prevented, has greatly contributed to its present economic scenario of Africa. Africa has witnessed one of the biggest cruelties of humanity, slavery. African slaves were supplied to American plantations which not only led to the loss of welfare due to denial of basic Human Rights but also hindered progress due to scarcity of labour in Africa. The anti-slave legislation solved the problem of scarcity and brought about a major change in the continent that led to the expansion of tropical agriculture in the economy.

However, that did not guarantee good days for Africa because, soon, they came under Colonial Control. The colonizers plundered their resources, worked them to death, impeded growth and development, and projected Africa as an economically weak continent in the global economy. They employed Africa’s necessary resources in the production and export of cheap primary commodities and raw materials only, which forced them to import the expensive manufactured goods which caused unequal trade transactions and greatly increased the trade deficits. The colonial rule has had serious long-term consequences on the economy of Africa and has greatly contributed to the underdevelopment of the continent.

Africa’s commendable growth potential is evident from the way it has bounced back from decades of torture and exploitation and maintained a somewhat average growth rate of 5% since 2000 in the Sub-Saharan region. This shows that Africa has the capability to increase and sustain its growth despite facing adverse conditions.

Present Scenario Due to the Pandemic

Despite not achieving the desired growth in 2019, forecasters were hopeful about the acceleration of growth at a stable rate, with an increase to 3.9% in 2020. However, due to the sudden onset of the pandemic, all prior forecasts have been rendered futile. New predictions state a sharp contraction in the Real GDP by 1.7% in 2020, indicating a 5.6% fall from the previous forecasts. These predictions are valid only for the short-term impact of the virus. If it were to last beyond the first quarter of 2020, then GDP would contract by 3.4%, i.e., a 7.3% fall from the previous predictions. This fall in GDP is accompanied by a 5% sharp rise in headline inflation due to supply-chain disruptions, thus, putting the economy in a state of stagflation. However, there is scope for the internal stability of the inflation rate due to immense fall in aggregate demand.  

Challenges Being Faced

Effect on Fiscal Deficits

The pandemic will lead to a great cyclical increase in fiscal deficits in Africa. It will happen in a two-fold process of decreasing government revenues and increasing fiscal expenditures to boost demand in the economy. In 2020, the deficits have been predicted to rise to 8% – 9% of the GDP, depending on the severity of the situation.

From the pandemics and other crises of the past, it has been noted that government revenues fall more rapidly than economic activity. Situations are more likely to worsen and be volatile to COVID-19 shocks due to the ineptitude of the administration in successfully implementing proper policy reforms to ensure smooth flow of government revenue.

Effect on Poverty

If there is a continuation of the prevailing trends, Africa will not be able to do away with extreme poverty by 2030, as planned before.  Taking into account the current scenario, there have been estimations that poverty will only fall to 24.7% in 2030 from 33.4% in 2018, which is still way above the 3% Sustainable Development Goal Target. Figures in the Economic Outlook of Africa (2020) indicate that the number of poor people will merely fall by 8 million, from 429.1 million in 2018 to 421.2 million in 2030. Only North Africa is expected to somewhat meet the 3% target by 2030.

However, the process of eradication can be sped-up by accelerating growth and development in the continent and taking measures to increase the social well-being of the people. Aggregate personal consumption needs a massive boost, of about 10% per annum, to help achieve the target by 2030. If these measures are not implemented properly then poverty eradication will remain a distant unachievable dream for the continent.

Other Challenges

There are other challenges being faced by Africa at the moment like increases in the debt burdens and fall in remittances and Foreign Direct Investment (FDI). Several countries in Africa have high debt-to-GDP ratios which are projected to drastically increase in the onset of COVID-19 and possess the risk of transforming to a sovereign debt crisis if not dealt with properly. In addition to it, remittances and FDI which constitute a dominant financial flow to Africa have been falling during the pandemic. This poses serious threats to the African economy and makes it vulnerable to economic instability.   

Policies to Ensure Stability

The African Economic Outlook (2020) suggests a few actionable policies to not only improve the quality of growth in Africa but also combat the impact of the pandemic. They are as follows:

• The government should ease the main constraints to productivity like poor infrastructure, uneducated and unskilled labour, poor administration, and others. Relaxing these constraints through adequate policy will guarantee growth revival.
• Governments across the continent should take adequate measures to not only stop the spread of the coronavirus but also economic stability by formulating and implementing a variety of combined fiscal and monetary policies.
• The fiscal and monetary policies should work hand-in-hand to collectively help in the revival of the economy. The fiscal policy should keep the debt buildup in check and provide a massive boost to aggregate demand and the monetary policy should work towards maintaining a stable inflation rate and minimizing exchange rate fluctuations. 
• There must be a shift from low-productivity informal sectors to high-productivity formal sectors which would help utilize the untapped resources of the economy.
• Despite the moderate growth of Africa over the past few decades, the quality of growth has been far from inclusive. Only a combination of rigid structural reforms by policymakers can accelerate Africa’s growth and improve its quality and inclusiveness. 
• Even if there is reduced scope for increased gains, policymakers should implement measures to sustain the gains already achieved in the past few years including macroeconomic stability, minimum fluctuations in exchange rates, and others.
• The government should increase the welfare of the people amidst the pandemic by providing proper healthcare benefits to labourers in the form of paid sick leaves and ensure income safety to those sick or quarantined and ensure job security to all who are suffering to check the increase of unemployment.
• The government should also facilitate Universal access to financed health services for everyone irrespective of their sector or employment status.

Conclusion

The Global Health Security (GHS) Index shows that 33 African countries are inadequately equipped to deal with the threats of the pandemic from a clinical perspective. However, Africa might stand a chance to stay strong in this adversity if proper arrangements can be made for rampant testing across the continent at affordable costs.

The future conditions of the economy depend on the competency of the governments to deal with the issue at hand. If the economies can uphold their resilience at this time, there is hope for a speedy revival and acceleration of the growth of Africa. This resilience can be maintained via effective structural reforms, to keep high debts and deficits in check, and minimal vulnerability, in the form of external reserves, to be able to finance imported advanced medical consumables and to make them available to the public. Thus, there has emerged an urgent need for policymakers to implement drastic reforms to strengthen resilience to be able to withstand shocks at all levels, be it macroeconomic, microeconomic or household levels.

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The US-China Dispute

The Red Dragon and Uncle Sam have a lengthy history of being at loggerheads. The US initially refused to recognise China as a sovereign state and indulged in many ministrations to displace the latter’s communist roots.  It was only in the 1970s that diplomatic relations took flight with the US acceptance of One China Policy. Still, their relations were fraught with friction, especially over human rights. When China entered the world economy and began opening up its economy, its engagement enhanced, with China going on to become America’s largest trading partner. With a few hiccups, the relationship seemed to be aiming for cooperation. However, it all radically changed in 2018 when the Trump government’s tariffs targetted China, setting off a vicious trade war that is still ongoing. What started out as a trade dispute couple of years ago has now turned into a full-blown show of might, branching into other areas as well.

In late 2018, the US signaled its hardline approach towards the eastern giant. The Huawei issue only intensified the same, and the US has done everything in its power to kick the Chinese MNC out of the 5G race on charges of spying. By 2019, the trade war had intensified, with both countries levying hefty tariffs on the other, and placing various other sanctions as well. Early 2020 saw the signing of a trade deal which provided a brief breather for the economic world, but the respite period remained short. The onset of the Covid-19 pandemic sent the global economy tumbling. America faced multi-faceted effects: its capitalist system suffered a downfall and the health system was brought to its knees. This tension had the hegemon accusing China of mismanaging the pandemic and causing harm to the world, eventually pulling out of WHO due to the latter’s support of China. China obviously, did not take the accusations well. But it was the new security law imposed in Hong Kong that proved to be the last nail in the coffin. Trump went on to strip the city of its special status, reducing its credibility as a world economic and financial hub. China accused America of interfering in its domestic affairs, and everything has been downhill since.

The Asian Playground

Due to the deterrence that comes with two giants battling each other, the countries are unlikely to engage in an all-out war, even if relations have diminished to a new low. Their historical animosity played out in the Asian region much like the proxy wars that dominated the global landscape during the Cold War. Both nations have tried to expand the ambit of their influence by espousing Asia-centric policies. Obama’s presidency saw a more active role in the region coupled with an enhanced military presence. China on the other hand relies on its geo-economic power to bind Asia to it. The Belt and Road initiative, the String of Pearls approach, ADB Bank and increasing economic investment promises financial advancement for the region. South Asia in one of the most populous regions in the world, yet intra-regional trade is quite fragmented (just 5%), which reduces the economic benefits it can reap. Thus China’s meteoric economic rise has proved to be a fundamental driver of economic growth. 

US security cover coupled with economic benefits from China has helped in the advancement of many countries, resulting in the expectation that Southeast Asia will become the fourth-largest economy in the world, overtaking the European Union and Japan by 2050. Therefore for Southeast Asian nations, especially the ASEAN market is a key area for both America and China. The US is now frantically looking to shift Asian loyalties to its side as it perceives the rising Chinese aggression and economic strength as a threat.  That is why it has taken a strong position against China’s assertions in the South China Sea and has tried to play on the insecurities of the latter’s neighbours regarding the same. This ‘harbinger of justice’ role has helped the nation gain influence in the region, which was a difficult task because of China’s proximity to it. America is also banking on its military and technological investment to gain the region’s unequivocal support. 

Since the beginning of the Sino-American trade war, Southeast Asia has been an undisputed winner on account of the benefits it is reaping. The high American tariffs on Chinese goods have led to a shift in manufacturing processes to the region. In 2019 Chinese acoustics manufacturer Goertek announced that it will shift its Apple’s Airpods wireless headphones production to Vietnam because of the ongoing trade dispute. Similarly, Cambodia has bagged bicycle production for a high-value US firm, and Thailand has become a hub of vehicle assembly plants. According to Forbes, a survey of U.S. firms manufacturing in China found that 18.5% had either moved production to Southeast Asia or were considering it.

Usually, ASEAN countries have been able to maintain a delicate balance between American geopolitics and Chinese geo-economics. But as both countries increase the heat, it is difficult to predict if the future will force the region to choose sides. For now, Southeast Asia is having a good ride!

The Indian Factor

India has been facing a sudden increase in tensions with China too. The border dispute has led to a fresh impasse, the first one since Doklam. But this time the costs have been higher, with multiple skirmishes and martyred soldiers lining the situation. In response, India, akin to America, has tried to economically isolate China by banning 59 Chinese apps and making calls for being ‘Aatmanirbhar’. But it is easier said than done, for the mammoth amount of trade between the two is skewed in China’s favour. Some would think it is natural for India to lean on the US, especially in view of the latter’s vocal support of India in the afore-mentioned border dispute. It is to an extent true too: India has gained around $755 million in US exports since the trade war disrupted relations. India is also the only country capable of countering China’s influence in a disintegrated Asia. It also has a large youthful population capable of rapid mass production which it could use to its advantage in view of the trade war. 

But the path is not as smooth as it looks. There are multiple factors that weigh India down as compared to Southeast Asia when it comes to being business-savvy. The country has a massive supply of cheap labour but lags glaringly in other areas. Poor infrastructure to accommodate foreign production, inadequate technology, complicated labour laws and red-tapism of a sloth-like bureaucracy have tainted the country’s hopes of attracting foreign investment. That is why despite improving its Ease of Doing Business rankings by 37 places, it still is only the ninth-largest trading partner of the USA. Its tedious land-acquisition laws coupled with hostile neighbourhoods have not done much to attract investors. In addition to this, India’s decision to not be a part of the trade agreement with ASEAN called Regional Comprehensive Economic Partnership (RCEP) has put it on the back foot. It passed up on a chance to economically seal the deal with the fastest growing economic region and its markets.

In view of these shortcomings, Southeast Asia proves to be a better region to direct investments to. In fact, India is not extremely affected by the trade war as it has not gained much from it. 

Conclusion

The United States of America and China are the two hegemons that balance the current multi-polar world. This grandiosity of sorts, coupled with their mutual interdependence in terms of trade and technology makes it difficult for them to inflict real-time damage on each other, or indulge in an all-out confrontation. That being said, the current animosity between the two is different from their usual spats. In this pandemic-riddled world their tensions have been aggravated by blame-game, allegations of spying, erosion of Hong Kong’s democratic rights and of course, the rejuvenated trade-war. Many Asian countries have benefitted from this fallout and gained increased investment from the US and more come-hither offers by China. It is now to see how their balancing act will progress. However, India has a long way to trudge before it can fully reap the benefits of the clash and needs to work on its internal infrastructure and policies to attract any advantages.

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“Health is the core of human development”

– Gro Harlem Brundtland

Economy and health are inseparable. Healthy people can live a prosperous life leading to more productivity, saving and investment, boosting economic growth and development. When an economy is interrupted by an unusual happening, economic effects follow up. Morbidity rate – the percentage of people infected, mortality rate- death rate, duration of the pandemic’s existence, number of workweeks lost, level of inequality during and after pandemic are some of the variables which can be used to estimate the economic effects of the pandemic.

Effects on supply

At the very initial stage when the disease starts spreading it creates panic among workers and there are possibilities for the rise in the rate of absenteeism. When the situation turns worse and the government intervenes by preventive and curative actions through lockdown and quarantine then it leads to loss of working weeks, shut down of businesses and industries at least till the restrictions are eased. Even after industries resume its functions, there will be a restriction on the number of workers, possibilities of workers getting affected by the disease or being deceased or laid off. This will not only affect a separate industry but there will be a break in the supply chain due to the breakdown of linkages– the flow of intermediate inputs in production. In the present time where many countries have trade liberalization, international flow of goods and services may also get severely affected. Businesses will hesitate to make an investment. Tourism, aviation, automotive, real estate, manufacturing industries of non-essential commodities may face loss while health care product industries, E-commerce may become some of the potential gainers at least for a short term.

Effects on wage

The Black Death of the 14^th century wiped out a quarter of Western Europe’s population, had economic effects like a drop in GDP, hike in the price of basic commodities and hit in the agriculture sector. But on the perspective of income, some thought to have positive or no effect on income per capita at least in France and England. Even 1918 influenza has had a positive impact on income per capita in the US. 

In a simple economic model, when the supply of labour is reduced in the manufacturing sector, initially there will be an increase in the marginal product of labour and capital per worker, increasing the real wage for a short term. The same way in a research it was found that over the period of 1914 to 1919 there was a greater increase in the manufacturing wage growth in the cities and states of the United States where influenza mortalities were greater. This may be possible only in short term but in the long run, fall in demand, loss of skilled workers, political pressure to control the wage, higher mobility of workers, reduction in human capital may result in equalization of wage. There is no clear view on both short and long term effects, as it depends on various circumstances.

Effects on demand

The anxiety created by the pandemic situation may result in loss of consumer confidence, people may hand back to spend. The economic cost may rise irrespective of whether the morbidity and mortality rate is high or low. The anxiety created during SARS (2003) outbreak which relatively had low mortality rate led to the economic cost of over 11 billion dollars in the areas where tourism and business were affected. The precautionary measures to avoid the spread of disease may isolate people from other activities like going to gymnasium, theatre, hotels etc. There may be effects on savings too.

Poverty and Inequality

Generally, the most vulnerable section, prone to diseases, is the poor due to lack of good sanitation, health care facilities and insufficient nutritious food. Even if the pandemic affects people indiscriminately the degree of an economic burden to be borne by the poor will be more.  During the lockdown, they have to face a hard time as most of their lives depend on day to day wages. Poor people may not have life insurance due to non-affordability or lack of information/awareness, in such a case if the principal earning person dies in that family the economic situation of that family will become worse and it will prolong until another person from the family enters into the working population with sufficient income. Education may become a distant dream, as the unfavourable economic situation may force them to send their children to work than to school, but education is one of the significant factors for the development of an individual as well as the economy a whole. 

The historians noted an improvement in economic equality after Black Death of 14^th century but currently, the pandemic situation which we are facing is quite different, now technology has taken lead. Right from health care services to education to work, for time being, is dependent on the internet. In the case of education students who cannot afford to electronic devices with internet connections or from remote rural areas will be set back. Half of the world’s population does not have access to the internet. If the gender gap prevails in access to the internet then it will increase the disparity between men and women. According to research, nearly 15% of the workforce on an average from 35 advanced and emerging countries, among 189 member countries of IMF is unable to do their works remotely. Even when vaccines are developed, distributional inequality may arise both within and between countries. Not only during its existence but even after COVID-19 vanishes a fear emerges that it may have an impact on inequality in different ways.

Loss of life can never be comparable at any cost.  

“Hope is important because it can make the present moment less difficult to bear. If we believe that tomorrow will be better, we can bear a hardship today.”

 -Thich Nhat Hanh

Even when Spanish flu led to the death of nearly 3-5% of the population and having a severe impact on the economy by increasing the unemployment and poverty, history shows that humankind with resilience fought back and got recovered soon. There is a greater chance of being flexible to the unforeseen circumstances to bounce back to normality. Fiscal and monetary measures used by the government, funds from international organizations, improvement in public health, infrastructure, education, cooperation by the people, love and compassion for others, giving a helping hand to the needy and most importantly faith in healing to have a better future will definitely lead us to recovery.

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Following the PM’s address, our Finance Minister, Dr. Nirmala Sitharaman, through a set of conferences, laid out the specifics of the package divided into 5 tranches. This article seeks to explore the details, benefits and drawbacks of the same. 

The Package in Details

Some of the Key Highlights of the Package for various sectors in several tranches have been provided below:

EARLIER MEASURES 

The “Pradhan Mantri Garib Kalyan Yojana” provided the following:  

• Foodgrains and gas cylinders to the needy for three months.
• ₹500 to women Jan Dhan account holders for three months.
• Relief to construction workers via a Welfare Fund.
• Insurance cover to health workers.
• District Mineral Fund to facilitate greater medical testing.
• Increased minimum daily wage rate 
• An increased limit of collateral-free loans for Women Self Help Groups.

Apart from the aforementioned activities, the Indian government has also provided relaxation in Statutory and Compliance matters such as extending the last date for Income Tax Returns and filing GST returns, allowing for 24*7 customs clearance till 30th June 2020, and others. It has also sanctioned Rs. 15,000 crores for Emergency Health Response Package and issued pending income-tax returns up to Rs. 5 lakhs.

RBI’s Monetary Measures:

• Reducing Cash Reserve Ratios.
• Providing Targeted Long Term Repo Operations for fresh deployment in investment-grade bonds, commercial paper, and non-convertible debentures. 
• Increasing banks’ borrowing-limit under the Marginal Standing Facility.
• Special refinance facilities for NABARD, SIDBI and the NHB at policy repo rate.
• 3 months of moratorium on payment of all installments and interest on working capital facilities.

MSMEs AND OTHER BUSINESSES

• Availability of collateral-free, automatic loans with 4-year tenure.
• 25% reduction in the rate of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) 
• Equity infusion and Equity Support for MSMEs.
• Providing a new definition of MSMEs with additional turnover criteria to incentivise them to grow.
• Amendments of General Financial Rules to disallow Global tenders up to Rs.200 crores.
• Extension of the due date of all income-tax return for FY 2019-20.

AGRICULTURE^[3]

• Additional Emergency Working Capital for farmers through NABARD
• Provision of concessional credit to PM-KISAN beneficiaries.
• Promotion of ‘Vocal for Local with Global outreach’ vision via schemes formalising Micro Food Enterprises.
• Facilitating risk mitigation, assured returns and quality standardisation for farmers.
• Implementation of schemes for sustainable development of marine and inland fisheries, development of herbal cultivation, animal husbandry and beekeeping.
• Subsidies on transportation and storage.

MIGRANTS, LABOURERS and OTHERS^[4]

• Setting up shelters providing food and water to migrants by utilising  State Disaster Response Fund.
• Launching schemes to provide free food supply and affordable rental accommodation to migrant workers.
• Providing employment opportunities to the urban-poor by mass production of sanitizers and masks.
• Launching a Special Credit Facility for Street Vendors.
• Universalizing the minimum wage right and implementing the statutory concept of National Floor Wage to reduce regional disparity in minimum wages.
• Boosting the housing sector and the middle-income group through the extension of the Credit Linked Subsidy Scheme.

NEW HORIZONS^[5]

• Fast track Investment Clearance through Empowered Group of Secretaries (EGoS)
• Implementing schemes to upgrade industrial infrastructure and bring about beneficial policy reforms.
• Encouraging private sector participation and boosting investment in several sectors, including space activities.
• Facilitating Efficient Airspace Management for Civil Aviation.
• Improve autonomy, accountability and efficiency in Defence Production.
• Implementing a Tariff Policy Reform pertaining to Consumer Rights, Industry Promotion and Sector-Sustainability.

      GOVERNMENT REFORMS^[6]

• Promoting India as one of the easiest business locations by modifying the Ease of Doing Business Reforms relating to easy registration of property, fast disposal of commercial disputes and simpler tax regime. 
• Facilitating Technology-Driven Education via PM eVIDYA programme
• Increasing investments in the Public Health Sector to not only combat the present pandemic but also prepare for future pandemics.
• Supporting State Governments & promoting state-level reforms.
• Modifying policies to allow for the privatization of various sectors, while upholding the prominence of Public Service Enterprises in defined areas. 

Overall Stimulus Provided by the Aatmanirbhar Bharat Package

Problems

The earlier fiscal relief measures along with RBI’s measures constitute ₹9,94,403 crores, which leaves an effective amount of ₹11,02,650 crores. Thus, the immediate fiscal boost announced with such grandeur by the government is quite less than the promised amount because of the inclusion of RBI’s monetary measures, despite both being independent institutions. Direct investment by the government in the form of a boost to the aggregate demand guarantees immediate impetus to the economy, however, that might not be the case with the government’s indirect measures and RBI’s credit easing because the banks, instead of lending, might park the money back with the RBI, thus, rendering its help ineffective. Even if the banks transmit the liquidity measures from RBI to the citizens, the transmission procedure will not be smooth due to the prevailing inefficiency of monetary policy transfers.

The economic package includes a lot of measures spread over 5 tranches. However, there exists the problem of implementing those measures. A classic example is the provision of collateral-free automatic loans to MSMEs. There is a high risk of non-return to banks in such cases unless the businesses end up earning high-profits amidst a global crisis, that is if the MSMEs get the required loans after overcoming the hurdles of meeting the high credit score criteria, bearing high processing costs followed by tedious procedures, and still not receiving the entire amount applied for. 

Conclusion

Both ‘Aatmanirbhar Bharat Abhiyaan’ and the ‘Make In India Campaign’ attempt to attract Foreign Direct Investment by laying emphasis on the promotion of local products to help with the declining job market. However, this causes a critical problem in a developing country like India which needs to depend on cost-effective imports of several products in which it does not have a comparative advantage and the domestic production of which will lead to increased manufacturing cost, thus, leading to the loss of a competitive edge in the Global Market. Although, Aatmanirbhar Bharat Abhiyaan does possess an advantage due to the inclusion of agriculture, which had been neglected all this while.

Although the package is very comprehensive and caters to the needs of all people, past history of failures due to the presence of corrupt bureaucracy raises the question of whether the relief package will have its desired effect. However, if the package is properly implemented and people are educated about the schemes through various drives and trained to utilize the benefits available to them, then there exists the possibility of success of the package through economic upliftment of the nation.

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Food Insecurity Before the Pandemic

 The Middle East and surrounding regions have always suffered from food insecurity when compared to the rest of the world. According to a report by the Food and Agricultural Organization (FAO) of the United Nations, “The number of chronically undernourished in the region has doubled from 16.5 million people in 1990–1992 to 33 million people in 2014–2016.”

War and a generally unfavourable climate have persisted for producing and distributing food in the region. This led to a dependence on imports for food, which was a worrying trend. There is a huge deficit between the import and export of food in the region. Even when food was available, it did not lead to a transition of nourished populations. 1 in 5 people in the Middle East and the areas around it have been undernourished. The number of poor in the region is high, and according to the FAO, the poor typically have to spend between 35 and 65 per cent of their income on food. In such a backdrop, food insecurity was likely to worsen with the pandemic.

Food Insecurity in Light of Covid-19

There are several ways the pandemic has worsened food insecurity – several people have lost their livelihoods. Lessening in purchasing power has led to tighter budgets and food becomes difficult to afford. Plus, the quality of food that can be afforded also decreases. People shift to packaged, processed foods and away from fresher foods, leading to a significantly less nutritious diet. But the price of food has definitely risen in the pandemic – In Syria alone, a 200 per cent price hike for basic food has been noted in under a year – a level not seen before in the country’s nine-years of civil war.

This is especially worrying considering that the pandemic has also weakened the already feeble food supply chains. Consider the aforementioned dependence on imported food – restrictions on movement and enforced social distancing is a unique characteristic of the pandemic, which is going to affect trade like never before. The world merchandise trade can drop between 13 and 32% in 2020 due to the pandemic – such occurrences will affect the availability of food. Even domestically, food transportation requires movement which is being restricted as much as possible. 

Apart from these obvious ways, there are a host of related problems that the pandemic has brought. Recently, locust outbreaks have affected food crop production. Closing down of borders and restrictions on movement will hinder locust control operations, further deteriorating crop production. In lots of areas, nutrition is provided to children when they go to school. However, with the coronavirus pandemic shutting down schools, another way to access food has become unavailable. From war-torn countries, refugees and asylum seekers cross the borders to get better lives and basic amenities. These displaced people will have to remain in situations with no access to basic amenities such as food and clean water as the pandemic forces borders shut. 

Moreover, the region already has a host of diseases. For example, for the last few years, Yemen has also been dealing with an endemic of cholera – between October 2016 and November 2019, over 2.2 million cases of cholera had been reported in the country. With the coronavirus likely to put pressure on the already weak healthcare infrastructure of these regions, these endemics can also worsen. All in all, both pandemic and endemic are slated to disrupt people’s livelihoods and safe access to food.

Conclusion

The region, already having unfavourable factors such as war, locust outbreaks, other endemics and unstable regimes has always suffered from food insecurity. The further unemployment, restrictions on the movement of goods both globally and domestically and rising food prices caused by the pandemic have all led to an even tenser situation. Food insecurity is not just a problem, it is also a cause of different problems. Food insecurity in this pandemic is made dangerous by the perception that “foreigners” bring in the virus. This attitude can lead to discrimination and further shunning of refugees. Limited food supplies in refugee camps can cause strife between local communities and refugees.

The people in this region are already at risk – due to poor healthcare facilities and less nutritious diets, they are likely to have underlying health conditions and suffer from malnutrition. This makes for weaker immunity systems. The region has been engulfed in a vicious cycle – of food insecurity leading to weaker immunity systems, followed by higher cases and more diseases. This, in turn, leads to disruption of food supply chains and hence, food insecurity. The heartbreaking reality is that even if these countries can somehow manage to save their citizens from coronavirus – they might just die from hunger anyway.

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Confinement in homes, and lack of steady incomes, seems to have been fostering tensions and frustration in households and strain due to concerns over health and security. The lockdown is also putting women in isolation with violent partners, with nowhere to turn to for help. In India, the National Commission for Women has reported a 200 per cent increase in the reporting and stress call numbers of domestic violence on their helpline in the month of June alone.

Even before the lockdown was imposed, domestic violence was one of the most prevalent violations of human rights and a key impediment to the implementation of the United Nations Sustainable Development Goals (SDGs) with one in three women have experienced it at some point in their lives. Economist Amartya Sen has estimated in 1990 that more than 100 million women are ‘missing’ — that includes those that never lived because of sex-selective abortions and infanticide, child neglect and maltreatment. That number was revised in 2015 to 136 million – this just shows how females have been subject to violence, at times even before they are born, at an alarmingly high rate.

Furthermore, it is essential to address that violence against women not only affects individuals, but also households, families and communities. However, the only way to change this stark reality is to hold the aggressors accountable and ensure that the problematic social norms that perpetuate the instances of violence are also tackled in an inclusive manner. The SDGs act as an apt framework to work off of, in order to shape a violence-free world – here’s how:

SDG 1: No Poverty

Women’s work – in agriculture, in communities, and at home, fuels economies and yet, isn’t regarded as ‘economic activity’. The exposure of females to incessant discrimination and mistreatment at the workplace makes them vulnerable and susceptible to gender-based violence. Women and girls are four per cent more likely to live in poverty and poor living conditions, a risk that rises up to twenty-five per cent as we factor-in other inequalities. Financial independence for women creates new opportunities and avenues for them to reject typical gender norms and leverage independence against violent partners. It also helps them to create a mentality of freedom and a sense of self for themselves. As a result, the reduction in poverty proves to be a catalyst towards enabling women in societies.

SDG 4: Quality Education

An estimated 246 million girls and boys experience school-related violence every year and one in four girls say that they never feel comfortable using school washrooms, according to a survey on youth conducted across four regions by the United Nations. Quality education is essential to ending violence against women. Educated girls are more likely to make their decisions towards family planning and managing finances, it is fundamental for the development of aspirations and skills, and children of educated women are more likely to have been safeguarded against malnutrition and illiteracy. Educational exposure also enables women to get access to leadership and decision-making opportunities. Hence, it propels them into a cycle of development that helps them create barriers to economic violence at home or in their communities.

SDG 5: Gender Equality

According to a 2018 report by United Nations Development Program (UNDP) in India, 18 per cent of women and girls aged between 15 and 49 years of age have experienced physical or sexual violence by an intimate partner or family member in the past twelve months. Further, someone is known to them – every day kills more than 137 women around the world. These figures represent a fraction of the discrimination against women in terms of opportunities, wealth, inheritance, safe access to public spaces, lack of decent work, and safe and healthy environments of living, learning, working, and engaging with their communities. These inequalities leave them extremely vulnerable to gender-based violence.

SDG 8: Decent Work and Economic Growth

Unsafe and poor working environments affect women regardless of their age, location, income, careers, or social standing. As of 2020, 18 countries have laws that enable husbands in preventing their wives from going to work. UN Women estimates that the economic costs of violence and harassment amount to US$12 trillion every year. As of 2018, 59 countries do not have laws protecting women from sexual harassment in the workplace. Economic growth cannot be achieved without the inclusion of women and their contribution to sustainable development in an empowering work environment.

SDG 11: Sustainable Cities and Communities

In developing countries, concerns of safety and restricted access to public transport reduce the probability of women participating in the labour market by 16.5 per cent. As the processes of urbanization and industrialization catch up to tier two and tier three cities, the UN estimates that more than 5 billion people will reside in cities by 2030. This becomes an essential notion to address in the light of crimes against women that are prevalent in most urban regions. Further, there is widespread human rights abuse in many industries, such as fast fashion, many of which employ women in majorities. Women may be subject to exploitation in such circumstances and need to be safeguarded against such instances.

SDG 16: Peace, Justice and Strong Institutions

In 37 countries, rape perpetrators are exempt from legal prosecution if they are married to, or subsequently marry the victim. Improving access to justice for survivors, and strengthening the legal framework against violators is an essential step towards making justice accessible for women – be it against violence, sexual misconduct at the workplace, or any crime against them. It is further imperative for women to mobilize and advocate support for their personal rights and those of their communities. This can be done digitally, individually, or at any level.  

Conclusion

At this point in time, COVID-19 is already testing humanity in unprecedented capacities. The shadow pandemic that we have had to face additionally is a mirror to the kind of societies we have built for ourselves so far. As we emerge from the pandemic, we must renew the outlooks towards inequalities and factor them into our responses to create a more equitable and sustainably sound world.

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The Covid-19 pandemic has put a standstill to regular schools and colleges. The Prime Minister of India, Narendra Modi on 24th March announced a nationwide lockdown to fight against coronavirus or COVID-19. Hence, schools and colleges all over India had to shut. Some state governments had already ordered schools and colleges to send the students back to their homes and close down the campus. 

Since the new academic session was to start in schools, they did not have a choice but to start online classes for students. Colleges too went ahead with the online teaching as they too had to complete the semester. Online classes may sound fun but it comes with its challenges. Some of these challenges and issues are raised by the United Nations Educational, Scientific and Cultural Organisation (UNESCO) and United Nations Children’s Fund (UNICEF). 

Concerns raised by UNICEF and UNESCO

E-learning has arguably helped educational institutes around India beat the Covid-19 lockdown to “push ahead with the academic calendar.” But experts including those at UNESCO and UNICEF have raised concerns w.r.t. these online classes.  

While a few experts are worried about the potential dangers of longer internet exposure for younger students, some of them are scared that this digital shift may alienate economically backward students who do not possess the technology required for online lessons. 

On 15 April, UNICEF said that “millions of children are at increased risk of harm as their lives move increasingly online during the lockdown in the Covid-19 pandemic”. 

As per UNICEF’s statement, “the internet exposure puts children at the risk of online sexual exploitation and grooming, as predators look to exploit the Covid-19 pandemic”. 

A greater internet exposure leads to online grooming which is a serious concern in this social media age. It involves mischievous and predatory adults who build fake online relationships with gullible children and trick or pressure them into different kinds of sexual behaviour.

UNICEF executive director Henrietta Fore says that “under the shadow of Covid-19, the lives of millions of children have temporarily shrunk to just their homes and their screens. We must help them navigate this new reality.”

UNESCO published a report on 21st April, which highlighted another major concern regarding the online classes. The report said, “Half of the total number of learners — some 826 million (82.6 crores) students — kept out of the classroom by the Covid-19 pandemic, do not have access to a household computer and 43 per cent (706 million or 70.6 crores) have no internet at home at all, at a time when digital distance learning mediums are used to ensure educational continuity in the vast majority of countries.” 

A Stark Reality

Now even though the above-mentioned concerns are very serious, educational institutions have no choice but to conduct classes online. But as already stated above not everyone can afford online education. There are various reasons for this, the prominent one being, lack of internet in households. According to a National Sample Survey report, “less than 15 percent of rural Indian households (and 42 percent urban ones) have access to the Internet.” This gives us an idea that the majority of students are not able to get the education they rightfully deserve. The fact that not many poor households can even afford a smartphone is also a major concern. 

The other issue is the technological issue. According to a report published in The Indian Express, the University of Hyderabad did an in-house survey of around 2,500 students on issues pertaining to online teaching. The results showed that 90 percent of the respondents have a mobile phone but only about 63 percent of them could access online classes infrequently or they could not attend at all. 40 percent of the surveyed students reported unreliable connectivity as being a major deterrent while 30 percent of them cited the cost of data as an issue. 10 percent, again a significant number of students, reported uncertain electricity supply as a concern.

Other Problems with Online Classes

As is quite evident from the figures above that many students in India cannot access online education because of a lack of internet. There is an illusion among those in urban areas that the internet has reached every nook and corner of our country but a report by NITI Aayog, called “Strategy For New India@75” highlighted that at least 55,000 villages in India don’t even have mobile network coverage. 

One area which has been ignored to an extent is stereotypes associated with using mobile phones in rural areas. According to a report in Newsclick, Gaurav Sikka, assistant professor of geography at Lalit Narayan Mithila University in Darbhanga, Bihar, said that “the online mode of teaching is widening the social and gender divide.” He further said, “I teach a majority of students who hail from conservative families where the parents have no idea that the students can take classes online. Thus, they are denying the girl students access to mobile phones.”

This gap between the haves and have nots has become a major hindrance in providing education to most of the students. Governments in the past came up with the Right of Children to Free and Compulsory Education Act, 2009 or RTE under which education was free for all the students under the age of 6 to 14. Some state governments did extremely well under the RTE but many of them did not focus much. 

Now under RTE, it’s the duty and responsibility of the states to provide the basic infrastructure to students so that no student suffers because of lack of facility. But still, government schools all over India are struggling to conduct classes, and the schools which have been able to conduct classes see a very low turnout. 

The elite schools in urban areas initially had trouble making the switch to online teaching but since then, they have been able to take regular online lessons. Although students are not facing connectivity issues as such, they certainly feel online teaching is no match for physical classes. The students feel that it’s difficult to interact with teachers and the teachers feel the same way too. Teachers say that they developed a methodology over the years to teach students in a physical classroom but they now have to adjust to online teaching. They say that they cannot figure out during a class if the students are attentive or not and also subjects like mathematics cannot be taught online because it requires a lot of practice and hence it is difficult to monitor each student during the online lesson. 

Conclusion and Suggestions

It’s pretty unclear what lies ahead and no one can predict anything at this stage, so the need of the hour is that the state governments take all the necessary steps to provide the basic facilities to students so that they can continue with their education. Internet penetration can’t happen overnight and students too can’t become tech-savvy in a day so it is suggested that classes be recorded and broadcasted through television channels to students in rural areas. Doordarshan the state broadcaster could be used for this purpose. At the same time, the state government must ensure that there are enough television sets in the area for the students. 

Along with this, the school administration must prepare themselves and better internet facilities so that in due course a better education could be delivered to students. These steps along with the students’ zeal to learn will definitely make India stand out from the rest of the world. 

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