The government's role has to transition from that of an arrogant extortionist to a responsible shareholder: The reality is that governments across the world generally collect between 25-40% of income as taxes, writes Prof Rajendra Pratap Gupta for South Asia Monitor
We have seen how some governments had dismissed the potential of COVID-19 only to wake up later and realize that it has entered their homes. Now, they are trying to calm the public, assure the private sector and prep up healthcare workers to cope with the pandemic, which has become a nightmare for the common man.
COVID-19 has also given us a sense that governments occasionally underestimate the potential threats and overestimate their capacity to address the issue. COVID is a classic case in point if we consider the United States and a few other nations. But now it is a mass crisis, impacting 166 out of 195 countries. The virus may reach the remaining countries and so, what must they do?
In the age of internet and social media, rumours spread fast and need to be checked. Countries must set up a website: covid.gov. (country name) to give the latest updates, preventive steps and actions taken by the government, facilities for doing tests and should be the go-to point for all authentic information. This website must list an email id, that is attended by a team to address all queries, though a call centre (based on SOPs) would be ideal.
All countries should do serious multiple scenario planning, in case the virus impacts 1, 10, 30, 50, … 100 % of the population, how they would address the issue and what the level of preparedness is. Also, it is important to share the ‘real numbers’ and let the system be in a state of readiness. This cannot be business as usual. Private sector capability must be used for forecasting and backcasting.
The role of private healthcare providers is crucial. If you have national health insurance, pass orders to consider COVID-19 testing and treatment under the scheme without a co-pay. If you don’t have insurance, the government should fund the testing and treatment. Keep sufficient stock of COVID-19 kits for frontline healthcare workers. Put a team to monitor the healthcare workers’ exposure and prophylactic actions that follow. Don’t force the private sector to offer services for free. If they are volunteering, it’s okay.
It is now time to invest in R&D for COVID-19 prevention and therapy and to manufacture protective clothing on a mass scale for domestic consumption and exports. It is important that the regulators ensure that consumers are not charged exorbitantly for products and services related to the prevention and treatment of COVID-19.
The government's role has to transition from that of an arrogant extortionist to a responsible shareholder: The reality is that governments across the world generally collect between 25-40 % of income as taxes. This means governments are shareholders with an upside, without a downside. So, whenever a company makes money, the government will ensure that it collects its due. But COVID-19 calls for governments to also show that they can be a partner when there is a downside. If COVID-19 impacts a country for three months, stop tax collection for six months, put a moratorium of loans of corporates for the next six months and waive the interest due from them. For that period give them a line of credit. Let the private sector come out of this contagion. It’s time for governments to chip in. Else, the private sector will finally convert ‘work at home’ to ‘stay at home’ (retrenchment), and this will lead to a ‘viral recession’. It is shocking that the governments treat the private sector as a mistress. While government and bureaucracy seek all favours from the private sector, they are shy to come out openly to support them in a time of crisis.
Unorganized workers are the real engines of the ‘buying economy,’ keeping the corporate balance sheets in green and, because of COVID-19, they are facing a serious threat of survival. It is time to pass money directly to these unorganized workers for the next six months. Also, countries which run social service schemes like free or subsidized rations must ensure these are delivered to their doorsteps, along with other necessities.
All movement of the public must stop for a fortnight (complete lockdown) and the government must only keep police and hospital services open, with preventive testing of exposed or people with symptoms. Mass screening is the solution.
Governments must not worry about the rating agencies or fiscal deficits for the next year. These are unprecedented times that call for pre-emptive steps and not just preventive ones.
The government will be judged by actions and relief on the ground, and not by high octane statements, because the reality of infection and death cannot be manipulated. COVID-19 will change the way governments deliver or change the governments which don’t deliver!
(The writer is a public policy expert and former advisor to the Health Minister, Government of India)