EPISODE #4: 2021: THE FEAR OF KNOWN UNKNOWNS
The New Year is like none other the world has seen before.
Hi Everyone,
A very happy Monday to you. And of course a very happy new year too (on a wing and a prayer that is).
Given the cruel experience of 2020 most of us are approaching 2021 with great trepidation. Even a roll out of the vaccine is failing to calm our nerves. Exactly the topic I picked this week: the imponderables of 2021.
Once you have read this post, please, please do drop me an email with your thoughts or ping me on twitter at @capitalcalculus. It is key to growing this newsletter. A big shout out once again to Vandana S and Vandana B, Kapil, Krishnendu, Yugainder, Balesh and Premasundaran who went the extra mile to share their thoughts and encouragement. Would be nice if more of you joined the act. And, many thanks to readers (few, yet precious) who hit the like button 😊.
Finally thanks to Rahul Sharma for the very poignant cover pix.
If you are not already a subscriber, please do sign up and spread the word.
Read on.
2021: The year of the imponderable
It was 18 years ago, in the aftermath of the audacious terror attack on 9/11, when the then US secretary of Defence Donald Rumsfeld coined the phrase ‘Known Unknowns’.
“There are known knowns. There are things we know we know. We also know there are known unknowns. That is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know,” Rumsfeld said during the briefing.
Actually, this tongue-twister from the feisty Defence Secretary best describes the challenge and opportunities awaiting the world and India in 2021.
The cheer that a New Year normally brings is definitely missing. Largely because the terrible legacy of 2020—the covid-19 pandemic, which originated in Wuhan, China—is still playing out. The spread of the virus has only ebbed and no one can assure us that it will not have a second Act (as we are seeing in England); a known unknown with devastating consequences. One among many imponderables that can’t be just wished away.
Here is my shortlist of known unknowns for India:
The covid virus
A year ago the idea of an antidote for the covid virus appeared to be a moonshot. Remarkably though, in less than a year, not only are we seeing a rollout, even better these vaccines are expected to deliver results with unprecedented efficacy. Undoubtedly, India’s ability to be part of the global supply chain for the vaccine is a big step in securing self-reliance. It also gives the country bragging rights at the global high table and an opportunity to earn valuable social capital by sharing the vaccine with less well-off countries.
However, the country has to bear in mind that the vaccine (being tried out for the first time) is just an exercise in mitigation; it is no silver bullet and vaccinating 130 crore people will take time (given the limited supplies) and cost the exchequer. At the same time the government has to also take tough judgement calls on the vaccine’s roll out: including, deciding who will be left out of the priority list.
It is quite obvious that the frontline covid warriors will be on top of this list. The rub lies thereafter: should the older populace (who are mostly home bound but have co-morbidities) be vaccinated first or should it be the younger population (key economic agents). Either way it is a tough trade off as they could impact the spread and incidence of the pandemic—not to speak of the underlying politics.
In a must read interview to Financial Express Dr Gagandeep Kang, clinical scientist, vaccine expert and professor at the department of gastrointestinal sciences, Christian Medical College, Vellore, batted for the latter option. Her logic has merit.
“The virus will not magically stop circulating the minute you get 60% of the population infected or vaccinated. A reduction in transmission is going to come from vaccinating young people. It’s not going to come from vaccinating the elderly,” she said.
In short the fight to combat the covid-19 pandemic is far from over. It is only turning a corner. The known unknowns are scary: we will continue to fly blind as we work our way through the post-vaccine phase.
The New Poor
Overall the assessment is that the worst may be over for the Indian economy. At least that is what comes through in the latest release of high frequency data. For finance minister Nirmala Sitharaman this is welcome succour as she readies to present the union budget on 1 February. At the least it will free her hands, if as many anticipate, to loosen the purse strings to continue to stimulate the economy till such time the private sector can reclaim the baton.
But the national numbers mask a scary situation in the other half of the economy. The lockdown, which disrupted supply chains and restrained the contact economy have played havoc with the livelihoods of people. The pain worsens as we go down the ladder of economic empowerment.
The World Bank estimates that the ranks of the new poor may have grown by about 70 million—reversing the gains in the fight against poverty alleviation. (If you have the inclination and time do listen to this 12-minute podcast I had done last year with the brilliant Anirudh Krishna on the growing number of new poor.)
The generous spread of social safety nets, including provision of free foodgrains, in the last one year has provided some relief—it would have been catastrophic otherwise. At the moment the known unknown is that nobody has a clue as to when and how the displaced personnel can reclaim their livelihoods, especially in the contact economy. India’s social stability is depends on it.
Spike in Inequality
Flowing from the above is the obvious inference about inequality. While the top 1% has not grown richer, the bottom half has definitely become poorer. A deep dive will reveal even worse.
One stark facet is the consequences of a year-long shut down of schools. The Internet only helped a few make up for lost facetime. For most the digital divide has been exacting; effectively it entails the loss of one academic year. Worse, many less privileged children lost out on the safe space of a school. The known unknown is the extent of damage and what it will take to fix the problem.
Yes we can
The list of known unknowns could be endless. But you get the drift. In conclusion I would like to flag a known known which holds out hope.
If there is one thing that Indians have demonstrated in the last year it is their resilience. We have managed to build a respectable medical infrastructure from scratch and managed to break into the big league by developing the vaccine capability indigenously. And all this while standing up to bullying by China on our eastern border and battling unprecedented economic blues. Lesser countries would have simply buckled under the pressure.
Not India. It hung in against all odds. Sufficient cause for comfort as we chart the rest of 2021.
Salute!
Recommended reading
If any of you appreciate refreshingly new insights about life around us I would recommend picking up The Alchemy of Us by science writer Ainissa Ramirez.
Just stumbled upon it. Ramirez examines eight inventions—clocks, steel rails, copper communication cables, photographic film, light bulbs, hard disks, scientific labware, and silicon chips—and reveals how they shaped the human experience and in turn these materials reshaped human culture etc. Was fascinated by the thought that till the invention of the electric bulb (which in itself she points out is not the simple story about Edison) human sleep patterns were fundamentally so different; the bulb extended the length of the day. Or the bit about how Hemingway had to reinvent his writing style to adjust to the brevity of the telegram (just what twitter is doing for us today). Enjoy.
Till we meet again next week. Stay safe.
Two issues highlighted by you of health safety and economic security are most current concerns arising out of Covid Pandemic ! Disparity in income lines have not only impacted the capacity to fight back the Covid but also affected the demand generation.
Other Disparity issues of 1) Infrastructure 2) Regional Development and 3 ) International Growth emerging out of Covid Pandemic are what I will be awaiting from you in next few weeks.
Please do suggest solutions as well!
Keep on writing- you have avid readers now 👍👍