Learn from the rest, implement the best

The second wave of COVID-19 hit the country right when the ailing Indian economy was beginning to realign itself. According to Bloomberg, all major economists and financial institutions cut growth projections for India, including State Bank of India (11 per cent to 10.4 per cent), after the devastating second wave.

The situation was so bizarre that even Paris-based Organisation for Economic Cooperation and Development, which had the most optimistic growth numbers of all, decreased their projection from 12.6 per cent to 9.9 per cent. According to a report titled ‘State of Working: India 2021’, the number of Indians reporting less than national floor-level minimum wage of `375 increased by more than 200 million during the pandemic.
The GDP shrunk by 23.9 per cent in the first quarter of the financial year 2020-21, according to official data by the National Statistical Office (NSO). On the other hand, various foreign nations are experimenting with new growth models and measures to tackle the economic setback caused due to the pandemic. Learning from their methods and implementing them in India can be beneficial for the country to stimulate economic revival.

Inoculating economic packages in Brazilian cities

Brazil’s economy grew by an unexpected 1.2 per cent in the first quarter of 2021 as compared to the last quarter, according to data from the National Statistics Agency. The numbers show an optimistic growth pattern for the country even after the deadly second wave of COVID-19 hit the nation. The growth of the country is led by a 5.7 per cent jump in the agriculture sector and a 4.6 per cent surge in internal investments. Brazil launched a financial package worth US$ 150 million to face the economic challenges posed by the lockdown due to the COVID-19 pandemic. According to official data, the Government of Brazil introduced various measures, including temporary relief in custom duty, simplifying customs clearance process and many different schemes for employment generation. As cities were first responders during the pandemic, the Brazilian Senate passed a bill which gave financial aid of US$ 116 to informal workers and US$ 1200 to single mothers.
As economic stimulus measures, especially for cities, Brazil directed the state-owned federal banks to extend credit of US$ 14.9 billion to small and medium-sized enterprises aimed at stimulating the investments and expenditure in the economy. The generous pandemic welfare programs, which reached to almost one-third of the population, helped to balance the economy a lot. COVID-19 has hit Brazil drastically as it is the second country in the world with the largest number of deaths and the third largest number of active cases, according to official data. Amid such chaos, the country has managed to decrease the effects of the second wave of the pandemic successfully.
What Rebeca Palis from the statistics agency said about lesser restrictions this year in Brazil as compared to the previous wave is also true for the Indian scenario. The lockdown in the states during the second wave was not as strict as last year’s and the Government of India never announced a central lockdown, but economy shrunk regardless. This is peculiar and points to some loopholes in the Centre’s approach. It is high time that that we look to countries like Brazil, which are on the same level as India in
many ways.

Seattle setting vaccination goals for the world

Cities are leading the vaccination drive of the United States of America (USA). Jenny A Durkan, Mayor, Seattle, announced that the city is first in the country to fully vaccinate 70 per cent of the population. It is past its second wave of COVID-19 and is driving global economic revival with economists predicting growth of more than
6 per cent in 2021. The country has already vaccinated close to 45 per cent of the population, when in fact, it is the worst hit country in the world in terms of active COVID-19 cases. The economy of the country will take a longer time to fully recover from the effects of the pandemic. However, the recovery is faster than expected in USA.
Aggressive vaccination drive across the country is clearly visible as more than half of the 30 largest cities in USA have completely vaccinated more than 50 per cent of the population, according to Seattle’s official website. Rollout of COVID-19 vaccines across the US has helped them in getting back on track as there is less anxiety among the people and domestic demand is growing which is allowing the small businesses such as bars, restaurants, gyms, etc, to get back on track. Consumer spending in the country reached a 14 month-high in April and the Government of USA has spent around $6 trillion in COVID-19 relief measures since May 2020, according to an official statement.
Economists around the world believe that robust spending in the economy and conducting vaccination at a faster pace will certainly help improve the economic health of the countries. The US government, on this line, has spent $1.9 trillion in relief packages to help those in need, which was approved in March 2020. Job creation is the key in economic revival of the USA. According to BBC, employers in the US have added more than 9,00,000 jobs due to reopening of restaurants, bars, schools, etc., which has slashed unemployment by 0.2 per cent as compared to February 2021. Boost-up spending on infrastructure and its related avenues can help boost employment rate and this, in return, will show a positive effect on the growth numbers of the country. The US is still almost 8 million jobs down as compared to the pre-pandemic levels in February 2020, according to the Department of Labour, Government of USA.

Shenzhen leading the innovation sector

China has retained its 14th position among top performing economies in the Global Innovation Index (GII) 2020, according to World Intellectual Property Organisation (WIPO). Shenzhen is leading China’s growth as it is the innovation and technology hub of the country and COVID-19 has further strengthened the digitisation process. According to the World Economic Forum, Shenzhen has the largest population of the so called ‘engine room’ population, which constitutes people in 20-40 years of age.
As the only major economy to have showed positive growth in 2020, China is well ahead in its path to achieve pre-pandemic growth. However, due to the second wave of COVID-19, the Chinese economy’s growth took a small pause in the first quarter of 2021. Innovation and export demands have been robust due to a continuous increase in the demand for Chinese goods. The exports have increased by 9.9 per cent as compared to last year.
China is one such country where government interference has been the key in the evolution. The Chinese government has spent a lot of resources in research, development, investment and in governing the global innovation market by allocating 2.23 per cent of its gross domestic product in research and development in 2019-20, according to data released by the National Bureau of Statistics.

Conclusion

The COVID-19 pandemic in India has resulted into long-lasting chaos amongst people as it is creating a section of poor population which is not used to categorising themselves as poor. Moreover, the bruises are long-lasting and will take time to heal as the economy gradually comes back on track. Authorities have to learn from countries such as Brazil, which are spending with both hands to implement economic stimulus measures and relief packages, providing spending power to people so that the economy slowly gets back on track. There is no doubt that vaccination is the key, which in India has to begin by addressing vaccine hesitancy which has loomed among people for a long time. China has shown the power of innovation and technology in pushing the economy which has given unexpected results. Implementation of these revival measures by way of knowledge sharing and adoption of key economic models can go a long way in helping the Indian authority on its path of economic revival after the devastating second wave of the
COVID-19 pandemic.