COVID-19: Why big nations like India and the US have been brought low by coronavirus

India is now the epicentre of the global coronavirus pandemic. It ranks just behind the US and Brazil in confirmed cases and is growing faster than either. The total rose 20 per cent in just the last week, despite the fact that India is testing less than most of its peers.

It’s looking increasingly likely that India will wind up being the country with the most cases in the world. This is not just a function of its massive population; China, too, has over 1 billion people. It is a reflection of the fact that big, diverse countries are at a disadvantage in dealing with pandemics.

Smaller nations such as New Zealand or Thailand can manage the flow of cases by shutting down their international borders. But internal borders are as porous in India as they are in the US. Imagine, for instance, how impossible it would have been for Europe to flatten its curve if it hadn’t suspended the Schengen agreement and freedom of movement for its 450 million people. Generally, officials in large nations are reduced to playing whack-a-mole: Even if they suppress an outbreak in Kerala or New York, chances are it will pop up somewhere else.

The pressure to “reopen” in such countries is also greater. Large nations do well economically because they have big, interdependent and diverse internal markets. Consequently, they can ill afford to have those supply chains broken for long. Unlike the US, India was quick to impose a proper nationwide lockdown — at great economic and human cost. Yet now the virus is spreading because people have to move across internal borders if the economy reopens even slightly.

One mistake Kerala made: The Communist-run local government waited too long to incorporate the private health care sector in its plans, undoing much of its earlier success.

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That puts a premium on effective government. Keeping close track of such movements and of every little outbreak would require a centralised state with no shortage of spare capacity — ideally one already primed to spy on its own citizens, such as China’s. For better or worse, no other big-nation government has similar abilities.

In the US, the pandemic has made the consequence of decades of misallocation and paralysis tragically clear. The American edifice of government has been hollowed out and its federal structure made unfit for purpose in a partisan and divided age. This ineffectiveness is reflected in data such as the World Governance Indicators, which has seen the US decline steadily over the past two decades.

India short on managerial resources, talent, and time

The world’s largest economy should not have a state that struggles to respond effectively to a crisis, even a once-in-a-century crisis. India’s state, on the other hand, has always been low on capacity. In fact, it’s a standard joke among policy analysts in India that any conversation about what needs to be done ends with the statement, “But we can’t do that anyway.” The Indian state, at every level, is chronically short of managerial resources, of talent, of resources and of time.

Often, if it does one thing well, something else is shorted. Early on in the pandemic, the southern state of Kerala received praise for how well it had limited the spread of the virus through vigorous contact-tracing. But, it turns out, the state devoted so much of its capacity to contact tracing that it failed to ramp up testing. Now state leaders have had to admit that cases are increasing through community spread.

One of the long-term consequences of this crisis will certainly be new thinking about federal states — and a fresh assessment of what in government constitutes “waste” and what is vital excess capacity.

Even in the short term, though, there are quick lessons to learn. Consider one success story in India — the outbreak in the massive Mumbai slum of Dharavi, where “Slumdog Millionaire” was famously set. Early on, it seemed that Dharavi would almost certainly suffer an exponential rise in cases. Instead, an innovative combination of privately staffed fever clinics, repurposed public infrastructure and manpower from non-governmental organisations managed to flatten the curve there.

What underperforming states should do

When the state has insufficient capacity, it needs to strike alliances like this with players in the private sector and non-profits. In fact, that’s one mistake Kerala made: The Communist-run local government waited too long to incorporate the private health care sector in its plans, undoing much of its earlier success.

Large countries with underperforming states need to shift approach swiftly. In Brazil, an uncooperative national leadership has already forced communities to turn to local organisations and transnational non-profits for help. Governments are going to have to treat NGOs and companies respectfully, as partners, if they want to have a chance of getting through this.

— Bloomberg

Mihir Sharma is a Bloomberg Opinion columnist. He is the author of “Restart: The Last Chance for the Indian Economy.”