The world's largest all-electric aircraft is about to take to the skies for the first time. The Cessna Caravan, retrofitted with an electric engine, is expected to fly for 20-30 minutes over Washington State in the US on Thursday. The plane can…
arvindmahajanThe world’s largest all-electric aircraft is about to take to the skies for the first time.
The Cessna Caravan, retrofitted with an electric engine, is expected to fly for 20-30 minutes over Washington state in the US on Thursday.
Is India's richest man betting on a tech cold war? Petrochemicals czar Mukesh Ambani plans to list his fledgling digital business overseas, Bloomberg News reported Tuesday, citing people with knowledge of Jio Platforms Ltd.'s initial public…
Amazo AMZN n may be preparing to make a big move into the self-driving vehicle world as the logistics giant is said to be in “advanced” talks to acquire Zoox, a stealthy developer of robotaxi technology, according to the Wall Street…
WITH MUCH of the world economy in an induced coma, it is easy to think that it will be permanently hobbled by the covid-19 crisis. Yet history suggests that if a vaccine or a treatment is found, there is a good chance that the world will bounce…
WITH MUCH of the world economy in an induced coma, it is easy to think that it will be permanently hobbled by the covid-19 crisis. Yet history suggests that if a vaccine or a treatment is found, there is a good chance that the world will bounce back to where it was—provided wise economic and public-health policies are in place.
The speed with which Germany, Japan, Britain and France recovered after the second world war is testimony to the tendency of market economies to return to their previous performance when normality is restored. In Japan, aerial bombings destroyed 66 major cities almost entirely and killed around 350,000 people. Yet within 15 years the cities had completely recovered. The worse they were hit, the faster they returned to their pre-war levels. Something similar happened in Germany.
This rebound is not just a feature of advanced economies. During the Vietnam war, the country was subjected to the most intense bombing campaign in history, at massive human and economic cost. And yet again, by 2000, there was no difference in poverty, infrastructure, or physical and human capital between areas that were bombed and those that were not.
For economists, this rapid regional convergence is the best example of the logic of capitalism. The fundamental qualities that made an area attractive in the first place are still there: a river, a central location, a long history, a good education system and the like. Businesses will want to invest, people will want to move back and the more a city is damaged, the faster its recovery will be.
A pandemic is somewhat similar to bombings during a war, in that the levelling of the economy is mainly caused by external forces. So we may expect something similar to happen. (Of course, if a vaccine or treatment does not show up in the near future, then things will be considerably more complicated, as the way every business operates will need to be rethought.)
It is worth remembering that the economic convergence that prevailed after the second world war did not happen without government intervention. In Europe, the Marshall Plan brought in much needed American financing. Post-war Vietnam was a highly centralised economy that could direct funds where it wanted easily and swiftly.
Another feature is that these countries emerged from conflict with strong governments that enjoyed a fair amount of legitimacy (albeit with very different political systems). Finally—and relevantly—most of these countries had very little inequality, which surely contributed to the sense of a joint enterprise.
It is probably no accident that in countries where institutions and the economy collapsed in wartime, such as the Democratic Republic of Congo, Somalia and Afghanistan, there was no rebound when the conflicts ended. Instead, the countries plunged into further chaos.
The biggest danger, therefore, is that the combination of a public-health crisis where many people die and an economic crisis that results from the lockdowns will undermine the legitimacy of the state and exacerbate pre-existing problems. This may make it very hard to return to a more-or-less stable social equilibrium.
This risk is probably highest where the social equilibrium is already fragile, for example in much of the developing world. However countries like Italy, France and America—where inequality has become corrosive and resentment drives a substantial part of politics—may not be too far from the precipice of social instability.
To preserve its future, it is critical that the state in many of these vulnerable countries acts to hold on to, and ideally rebuild, its legitimacy. That is a complex undertaking, but at a minimum involves organising a competent response to the covid-19 crisis, including management of its economic implications.
There is a rough consensus among public-health experts and economists about what countries must do. First, avert a collapse of the health-care system during the epidemic’s peak. Second, support vulnerable citizens financially through unconditional and nearly universal cash transfers, to make the lockdown bearable (and feasible). Third, test enough people for the virus on a systematic basis to determine when and where reopening is possible.
This is undoubtedly going to cost a lot. In rich countries, this should not be any problem whatsoever and any failure to do that would be a self-inflicted wound. They can borrow at very low cost without affecting their credit standing. We hope that the American and European governments remember the lessons of 2008 and do not call for a return to fiscal “discipline” too early.
Poor countries, however, fret about their credit ratings if they are seen to be fiscally undisciplined. Even India, a large, middle-income economy, is paralysed by fear of the consequences if it deviates from macroeconomic conservatism. In Africa, countries are unable to put the necessary measures in place unless they are financially supported and their debts are forgiven. Moreover, they will need funds to pay for medicine and potential vaccines.
So these countries won’t manage on their own. What the world needs now is a “Covid-19 Marshall Plan” for poor countries. Only then would we have a chance to experience a post-coronavirus recovery that will look more like the “thirty glorious years” that followed the second world war, the Great Depression and before that, the last great pandemic.■
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arvindmahajanAFRICA’S FIRST confirmed case of coronavirus was recorded in Egypt on February 14th. Some worried that, as outbreaks took hold across the globe, the virus would rapidly overwhelm the continent’s fragile health-care systems. For the moment, if official figures are to be believed, such fears have not been realised: Africa, home to 17% of the world's population, currently accounts for just 1.5% of the world’s confirmed covid-19 cases and 0.1% of deaths, according to the World Health Organisation.
The true death toll may be far higher. The low numbers reported so far may partly reflect a paucity of testing. Africa CDC, a public-health agency of the African Union, reckons that just 1.8m Africans have been tested for the virus, or slightly more than 0.1% of the population (Germany, by comparison, has tested nearly 4% of its people; across the OECD, the testing rate is 2.3%, on average). Africa CDC plans to distribute another 1m tests. But even if they succeed, this will still be just 0.2% of the population, far short of the 1% health experts reckon is needed for a successful testing strategy.
Testing has been uneven, too. South Africa, which is home to 4% of the continent’s population, has accounted for more than a third of all tests, thanks to an ambitious screening programme using community health workers. Nigeria, meanwhile, is home to 15% of Africans but has conducted just 2.5% of tests. In Sudan, where there have been 3,820 confirmed cases and 165 deaths from covid-19, authorities have tested only 1,700 people. Tanzania, a country of nearly 60m, has tested fewer than 1,000 of its citizens.
Such failures are caused in part by a lack of market clout, according to a recent report in the Lancet, a British medical journal. As demand for the ingredients needed to make tests has soared, richer and more influential countries have muscled African ones out of the market in order to add to their own stockpiles. “Even when there is enough money, many African health authorities are unable to obtain the supplies needed,” the report states.
Africa’s covid figures would probably be relatively low even if testing were more widespread. Africans travel less, because of poor road networks, making it harder for the disease to spread. African population distribution is also skewed towards the young, which reduces the rate at which infected people are likely to die. But the continent’s poor—many of whom are employed informally—are suffering severely under lockdowns in crowded cities where social distancing is impossible. Better testing would make it easier for them to return to work.
Here are the 50 ideas that changed my life. These are my guiding principles and the light of my intellectual life. All of them will help you think better, and I hope they inspire curiosity. 1. Inversion: Avoiding stupidity is easier than trying to…
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(3 level villas with underwater living, glass-bottom Jacuzzi, and private man-made coral reefs teeming with marine life) Connected to Honeymoon Island by jetties, the Floating Seahorse Villas were designed for investors and second home end users.
arvindmahajanInteresting time to launch : when Dubai is going bust