Home > Opinion > Columns > Opinion | The lockdown dilemma: Is the cure worse than the disease?

Prime Minister Narendra Modi announced a lockdown that began on the midnight of 24 March. It was extended on 14 April till 3 May, and then again last Friday till 17 May, though in an attenuated form. However, many observers expect various restrictions to continue for longer than that. The smart money would be on India being at least partially locked down through the summer, perhaps longer.

At this point, one does have to ask the question: Is the lockdown a cure worse than the disease? This question is by no means unique to India. Throughout the advanced nations of the West, and within sub-national jurisdictions in federal states such as the US and Canada, political leaders and ordinary folks are asking whether the damage to the economy, to livelihoods, to the social fabric, even to mental health, is worth the putative gains of the lockdown in terms of containing the spread of the virus and “flattening the curve". To put it starkly, there is an inevitable trade-off between lives and livelihoods, a fact which few politicians will openly admit and which often evokes a strongly negative, emotive reaction from many.

The US and Canada are perfect laboratories for different policy experiments in different jurisdictions. This will help us learn how flat or steep is the trade-off between lives and livelihoods. While some states in the US push to reopen, others remain tightly locked down. In Canada, the French-speaking province of Quebec plans to begin re-opening on 3 May, while the largest province, Ontario, has steadfastly refused to announce a date for reopening, only a theoretical “roadmap" for a phased return to a new normal. Meanwhile, in Europe, in itself a type of large federal super-state, Sweden has taken a markedly relaxed approach from the outset, while others, such as France and Spain, are slowly normalizing from what began as a very restrictive lockdown.

This is where the science of epidemiology must be supplemented with the benefit-cost analysis that economics brings. For a healthcare expert, probably trained as a physician, the mantra is “do no harm". The focus is purely on health, with little if any consideration given to economic or social consequences. But here’s the rub: both the benefits and costs are difficult to measure.

In the US, for example, estimates suggest that the lockdown shaves $16-19 billion of economic activity every day. This is a huge number. As against that, there are the presumed public health benefits of containing the virus, reducing its spread, and ratcheting up public and private healthcare capacity to deal with a possible second and subsequent waves of infections. At this point in the US, sensible opinion seems evenly split on whether the lockdown needs to continue in its strict “shelter at home" form, or whether a phased, sensible, and safe phasing out of the lockdown, maintaining social distancing, hygiene and other precautions, merits serious consideration.

Unfortunately, the official discussion in India on reopening does not inspire much confidence. Nor do we seem to have a firm handle on benefits versus costs. The government claims that the lockdown has saved many lives; unfortunately, it provides no credible, model-based analysis to underpin this assertion. What one has mostly seen, including from scholars who seem sympathetic to the government, are unpersuasive linear extrapolations of the infection rate from starting dates that look cherry-picked to give the desired result.

What is more, the government looks likely to miss a golden opportunity to push the stalled agenda of second generation economic reforms. This would have been the perfect moment to announce reforms, such as of labour laws, that would help jump-start the economy once the immediate crisis has passed. Alas, no such luck, at least not yet.

On the flip side, there have been few trustworthy estimates of the economic cost of the lockdown. One that has surfaced publicly is from the NITI Aayog, which calculates a 2-3% loss in gross domestic product (GDP) over the fiscal year, assuming that the lockdown is eased mid-May and that production and consumption normalize in 3-4 months. This seems overly optimistic. In my judgement, a more likely benchmark for the degree of economic loss is a drop in GDP of 5%, or more. This would be bad enough in an advanced economy. In an emerging economy such as India, whose potential rate of growth is in the 7%-8% range, a contraction in output is only a little short of disastrous. And, if the lockdown lasts beyond the monsoon, that loss in output could continue to mount, conceivably into double digits. That would be an economic blow which would takes years, if not decades, to recover from, and, as is always the case, the poorest and most vulnerable will bear a disproportionately high share of the burden.

The world over, it is those with secure incomes and safe and commodious living spaces who push for a continuation of lockdowns—whether it is a neta or a babu in Lutyens’ Delhi or a tenured university professor in a posh neighbourhood of Toronto. They have a disproportionate voice. It is the poor who suffer the most and whose voices go unheard. That is a tragedy.

Vivek Dehejia is a Mint columnist

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