📰 Central Asia meet forms Afghan group
PM says countries ‘concerned about the developments in Afghanistan’; leaders discuss connectivity.
•Overcoming the lack of land connectivity between India and Central Asia’s land–locked countries was one of the “main issues of discussion” during the first India-Central Asia Summit hosted by Prime Minister Narendra Modi with the Presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan, officials said on Thursday.
•PM Modi also proposed a number of high-level exchanges between the two sides, including bi-annual summits, and annual meetings of the Foreign, Trade and Cultural Ministers and Secretaries of Security (National Security Advisors) to “strengthen cooperation in the areas of political and development, partnership, trade and connectivity, culture and tourism and security”, the officials said, adding that these proposals were accepted, along with a plan to build a “Central Asia Centre” in New Delhi. They also announced two “Joint Working Groups” (JWGs) on Afghanistan and the Chabahar port project.
•“Further development of mutual connectivity is essential for enhanced trade and commerce between India and Central Asian countries in the context of their land-locked nature and lack of overland connectivity with India,” said the “Delhi Declaration” joint statement issued at the end of the 90-minute long summit.
•“The Leaders emphasised that connectivity projects deserve priority attention and could be a force-multiplier for trade and economic cooperation and contacts between countries and people,” it added, but did not directly refer to the blocks on transit trade imposed by Pakistan.
•The leaders discussed possibilities of increasing Indian trade with the region beyond the currently low levels of about $2 billion, welcoming options over sea provided by Iranian ports including the Chabahar port terminal managed by Indian and the International North South Transport Corridor (INSTC) through Bandar Abbas that is promoted by Russia and Iran, and which is due to include both Chabahar and Turkmenistan’s Turkmenbashi port.
•Notably, the joint statement recorded that President Gurbanguly Berdimuhamedov had “stressed on the importance of TAPI gas pipeline project” that runs from Turkmenistan’s Galknyshk oil fields near Mary (Marv) through Afghanistan and Pakistan to India, but did not record any support from India on the project.
•The TAPI project, which was inaugurated in 2015, has run into issues over India-Pakistan tensions and the situation in Afghanistan, though the Taliban officials announced after talks earlier this month that they hope to restart work on the pipeline in September 2022. Turkmenistan plans to hold an International Ministerial Transport Conference for Landlocked Developing Countries, in April 2022, which may discuss TAPI further.
•Asked at a briefing whether the Central Asian leaders, who are engaged in consultations with the Imran Khan government over trade links, would impress the need for allowing trade connectivity on the Pakistani government, MEA Secretary (West) Reenat Sandhu said the “question on Pakistan is best addressed to Central Asian countries”.
•The leaders also spoke at length about concerns over Afghanistan, sharing the “same concerns and same objectives” in broader terms and agreed to setting up a JWG of senior officials, said Ms. Sandhu, listing those concerns as the need for immediate humanitarian assistance, ensuring the formation of a truly representative and inclusive government, combating terrorism and drug trafficking, and preserving the rights of women children and minorities.”
•Prime Minister Modi tweeted that all countries at the summit were “concerned about the developments in Afghanistan”. “In this context, our mutual cooperation has become even more important for regional security and stability,” he said.
•The India-Central Asia summit, that marked 30 years of diplomatic relations, came two days after a similar China-Central Asia Conference was held where Chinese President Xi Jinping offered $500 million in assistance and pledged to ramp up trade to $70 billion from the present levels of about $40 billion a year. To a question about whether China’s deep engagement with the region was discussed, Ms. Sandhu said ties between India and Central Asia “stand on their own merits” and are based on a foundation of “deep historical, cultural and civilisational links.”
Policy efforts to formalise the economy will have limited results as the bulk of informal units are petty producers
•Since 2016, the Government has made several efforts to formalise the economy. Currency demonetisation, introduction of the Goods and Services Tax (GST), digitalisation of financial transactions and enrolment of informal sector workers on numerous government Internet portals are all meant to encourage the formalisation of the economy. But why the impetus for formalisation? The formal sector is more productive than the informal sector, and formal workers have access to social security benefits.
•The above-mentioned efforts are based on the “fiscal perspective” of formalisation. This perspective appears to draw from a strand of thought advanced by some international financial institutions such as the International Monetary Fund, which foregrounds the persistence of the informal sector to excessive state regulation of enterprises and labour which drives genuine economic activity outside the regulatory ambit. It underplays informality as an outcome of structural and historical factors of economic backwardness. Arguably, excessive regulation and taxation ensure the endurance of informal activities. Hence, it is believed that simplifying registration processes, easing rules for business conduct, and lowering the standards of protection of formal sector workers will bring informal enterprises and their workers into the fold of formality.
•The fiscal perspective has a long lineage in India going back to tax reforms initiated in the mid-1980s. Early on, in an attempt to promote employment, India protected small enterprises engaged in labour intensive manufacturing by providing them with fiscal concessions and regulating large-scale industry by licensing. Questions of efficiency aside, such measures led to many labour-intensive industries getting diffused into the informal/unorganised sectors.
•Further, they led to the formation of dense output and labour market inter-linkages between the informal and formal sectors via sub-contracting and outsourcing arrangements (quite like in labour abundant Asian economies). In the textile industry, the rise of the power looms at the expense of composite mills in the organised sector and handlooms in the unorganised sector best illustrates the policy outcome. While such policy initiatives may have encouraged employment, bringing the enterprises which benefited from the policy into the tax net has been a challenge. The challenge is only partly administrative. Political and economic reasons operating at the regional/local level in a competitive electoral democracy are responsible for this phenomenon, too.
Sign of underdevelopment
•Undoubtedly, widening the tax net and reducing tax evasion are necessary. However, global evidence suggests that the view that legal and regulatory hurdles alone are mainly responsible for holding back formalisation does not hold much water. A well-regarded study, ‘Informality and Development’ (https://bit.ly/3KOBEVx), argues that the persistence of informality is, in fact, a sign of underdevelopment. Across countries, the paper finds a negative association between informality (as measured by the share of self-employed in total workers) and per capita income. The finding suggests that informality decreases with economic growth, albeit slowly. A similar association is also evident across major States in India, based on official PLFS data. Hence, the persistence of a high share of informal employment in total employment seems nothing but a lack of adequate growth or continuation of underdevelopment.
Transformation in Asia
•The defining characteristic of economic development is a movement of low-productivity informal (traditional) sector workers to the formal or modern (or organised) sector — known as structural transformation. East Asia witnessed rapid structural change in the second half of the 20th century as poor agrarian economies rapidly industrialised, drawing labour from traditional agriculture. However, in many parts of the developing world, including India, informality has reduced at a very sluggish pace, manifesting itself most visibly in urban squalor, poverty and (open and disguised) unemployment.
•Despite witnessing rapid economic growth over the last two decades, 90% of workers in India have remained informally employed, producing about half of GDP. Combining the International Labour Organization’s widely agreed upon template of definitions with India’s official definition (of formal jobs as those providing at least one social security benefit — such as EPF), the share of formal workers in India stood at 9.7% (47.5 million). Official PLFS data shows that 75% of informal workers are self-employed and casual wage workers with average earnings lower than regular salaried workers. Significantly, the prevalence of informal employment is also widespread in the non-agriculture sector. About half of informal workers are engaged in non-agriculture sectors which spread across urban and rural areas.
It has many layers
•It needs to be appreciated that informality is now differentiated and multi-layered. Industries thriving without paying taxes are only the tip of the informal sector’s iceberg. What remains hidden are the large swathes of low productivity informal establishments working as household and self-employment units which represent “petty production”. To conflate the two distinct segments of the informal sector would be a serious conceptual error. Survival is perhaps the biggest challenge for most informal workers (and their enterprises), and precarity defines their existence.
•Despite (well-intentioned) efforts at formalisation, the challenge of informality looms large for India. The novel coronavirus pandemic has only exacerbated this challenge. Research by the State Bank of India recently reported the economy formalised rapidly during the pandemic year of 2020-21, with the informal sector’s GDP share shrinking to less than 20%, from about 50% a few years ago — close to the figure for developed countries. As we have argued elsewhere (https://bit.ly/3G6JtST), these findings of a sharp contraction of the informal sector during the pandemic year (2020-21) do not represent a sustained structural transformation of the low productive informal sector into a more productive formal sector. They are a temporary (and unfortunate) outcome of the pandemic and severe lockdowns imposed in 2020 and 2021. The informal sector will perforce spring back to life soon, for sheer survival, to produce whatever it can, using its abundant labour and meagre resources.
The necessary elements
•Policy efforts directed at bringing in the tip of the informal sector’s iceberg into the fold of formality by alleviating legal and regulatory hurdles are laudable. However, these initiatives fail to appreciate that the bulk of the informal units and their workers are essentially petty producers (self-employed and casual workers) eking their subsistence out of minimal resources. Therefore, these attempts will yield limited results. The continued dominance of informality defines under-development. Policy-induced restrictions are minor irritants, at best. The economy will get formalised when informal enterprises become more productive through greater capital investment and increased education and skills are imparted to its workers. A mere registration under numerous official portals will not ensure access to social security, considering the poor record of implementation of labour laws.
📰 What approach should we adopt to treat Omicron?
If symptoms settle down within four days, there is no need for aggressive treatment
•With Omicron becoming the dominant COVID-19 variant in the country, and with its reputation of being a ‘milder’ form of the disease, there is a debate raging on what treatment methodologies are appropriate. Should we adopt a conservative line or an aggressive line to treat Omicron? The responses to SARS-CoV-2 have been changing constantly, whether in the form of treatment or social restrictions. In a conversation moderated by Ramya Kannan, infectious diseases specialists Dr. V. Ramasubramanian and Dr. Subramanian Swaminathan discuss the question and the challenges of responding to an evolving pandemic. Edited excerpts:
Omicron has a reputation for being ‘mild'. Is this true?
•Dr. V. Ramasubramanian: We are fortunate that the current third wave, which is caused predominantly by the strains of lineages of Omicron, appears mild. In other words, the disease is much more rapidly transmissible but disease severity is significantly less compared to the Delta variant. The incubation period is much shorter, the transmissibility is much, much higher and faster, and the disease is mild. The only slight difference I would say is that unlike Delta, which caused milder infections among younger people, we find now that even youngsters have high-grade fever. But fortunately, it settles down in three to four days in most people. Even though Omicron has significant mutations, and it spreads very fast, disease severity is lower compared to Delta.
•Dr. Subramanian Swaminathan: Delta was an unmitigated disaster for the whole world, not just for us. We do have a lot of symptomatic disease now. We are seeing quite a few of the extremely elderly, especially those with co-morbidities, now coming in with severe disease; my ICU is currently full. And I have quite a few patients who we would classify as critical COVID-19 cases.
•And let's not forget that mortality is not insignificant. We call this variant mild, based on the need for oxygen. But having said that, I'm seeing an increasing number of people who are completely miserable due to Omicron because of the fatigue and body ache it causes. I'm seeing a lot of elderly people with mental fogginess. They have loss of energy, some of them tend to buckle and fall, some have had a fall in blood pressure. None of this would qualify as severe disease, but the symptoms in older people can be dangerous.
So, while treating COVID-19, presumably since the dominant strain is now Omicron, do we take a conservative approach or a more aggressive path?
•Dr. Ramasubramanian: It’s a difficult question in the sense that there are people who can become sick — for instance, the elderly with co-morbidities can end up very sick. But if you look at the percentage of people who become sick, it's very small compared to the number of people who fall ill and have symptoms, which is significantly higher than what we saw with Delta. So, people who are elderly, have co-morbidities, or people who are unvaccinated can fall ill. But this percentage is very small.
•Because [symptoms in] most people settle in three to four days, we have a window of at least five days before we need to react to it. I don't think we should hurry and give something on the first or second day of the infection. So, my advice has been to wait for three to four days. If by the fourth day, the patient is feeling significantly better, which is what happens to most people, they should be fine. But if by day four or five, things are not settling down, the patient is not feeling better, we need to probably act.
•Dr. Subramanian: I agree with that. Jumping the gun and running for medicines for every patient is probably ill advised. I think we should be very generous with things like paracetamol. Rest, drink lots of fluids. The [symptoms in] the majority of patients are going to settle very nicely.
Is vaccination helping keep death, severe disease and hospitalisation at bay? Are more children infected now?
•Dr. Subramanian: The vaccine campaign has been one of the major victories that we've had in reducing the impact of COVID-19. That is certainly making a difference. The question is, how long does immunity last and how effective is it, especially in the most vulnerable groups? Obviously, the unvaccinated do remain a significant vulnerable group. However, we are noticing that among patients 70 years and above, especially those who have multiple co-morbidities, if the second dose of the vaccine was administered to them more than six months ago, it seems as though it is not protecting them adequately. Those who had received the second dose of the vaccine within the last six months didn't seem to do so badly, irrespective of their age. So, I think there is some value in the booster dose. And I really wish we had started administering the third dose earlier.
•And yes, we are getting a lot of children and adolescents coming in with fever. But thankfully, the majority of children do not have a problem. Just watching symptoms and providing symptomatic therapy is enough. My colleagues are telling me that children are coming in with fever-induced seizures. It’s too early for us to say if there is a real link with COVID-19 or is just happenstance. But that's something that we need to observe very carefully.
•Dr. Ramasubramanian: With regard to vaccination helping, it is spot on. But we have seen that as the antibodies wane, there is a higher risk of picking up Omicron. Now studies have shown that if a booster dose or a third dose had been given to people, they would have stood a lower chance of having symptomatic Delta virus infection. If your immunity after two doses was about 80-90% and went down after six months or so and you were given a booster for the Delta virus infection, the protective efficacy would have gone up again to 80% or 90%. In other words, the booster would have brought up your level of protection from symptomatic disease to 80-90%. But with Omicron, protection from the third dose was actually only about 50-60%. So, the booster dose was not as effective for Omicron in preventing symptomatic disease as it was with the Delta variant. This has been clearly documented.
•But if you look at severity, which warrants hospitalisation or complications and death, even for Omicron, the third dose actually did very well. The necessity for a booster in preventing serious infections, whether it is Omicron or Delta, is very well established. But one thing I would like to add is, even though we are looking at administering three doses for most people, I think the priority is to ensure the two doses are given to the entire population.
How do you deal with the constantly changing goal posts for treatment for COVID-19?
•Dr. Subramanian: The process of data gathering is not necessarily linear or streamlined. If we look at medicine as such, we have evolved our way of looking at the data and understanding the science of it in a much better way right now than we did, say, 50 years ago.
•When you have a new problem, and a new molecule, and new drugs, if there is one study done very well with enough numbers, it may be fairly useful in concluding the path ahead. But we need to do studies in different settings and populations, and then decide how it works. During an evolving pandemic, what is true in one wave may or may not be applicable in the second wave, especially when it comes to antivirals. That’s exactly where we’re going.
•The third thing is that it also depends on the kind of population we are looking at. For example, a lot of the studies, on the basis of which we have got approvals for various drugs, were done on people who were unvaccinated. But now, nearly all the people who are coming in are vaccinated.
•When we talk about COVID care, there are two parts to it — antivirals and the treatment of hypoxia. And the good news is that for the second part of the treatment, which is treatment of severe COVID-19, which is basically lung injury, the data on treatment are fairly clear. The antiviral use is a moving target and it changes based on where you are and who you are studying.
•Dr. Ramasubramanian: Medicine is constantly evolving. But what we have to understand is that there are two issues. One is medical and the other is advocacy. If you look at the medical evidence, this should be based purely on science, purely on randomised control studies. But these kinds of trials and studies take time, you cannot be waiting around to come up with advocacy. The advocacy will involve political issues, logistic issues, such as the question of lockdown.
•In the early part of the pandemic, all kinds of drugs were recommended for all kinds of situations. That has been streamlined. So, we have definitely become a lot better in our approach to handling this crisis. But we need to understand that this situation is constantly evolving. Earlier, nobody was vaccinated; now we have a vaccinated population. So, would the same drugs work? It depends on the population dynamics and behaviour; on the susceptibility of each person to infection, whether they are unvaccinated/vaccinated; on the immune response to earlier infections. And most importantly, it would depend on the variants and how they behave. So, the bottom line is, this is still constantly evolving, and we need to learn along the way.
Is it possible to ensure that certain recommended protocols are implemented across the country?
•Dr. Subramanian: It's a pretty complex area. While COVID-19 has shone a spotlight on it, it is happening everywhere else. So, therefore, while the government has had very detailed guidelines on treatment for several diseases, not many doctors are aware of them. There is obviously a problem in education and dissemination, and that needs to be addressed. These protocols should be strictly followed in academic institutions. Only if that happens will we be able to fix the private sector.
•Dr. Ramasubramanian: With regard to COVID-19, even with evidence there is a problem because this is constantly evolving and what was true two months ago may not be valid now. In the Indian situation, one more complication is the spectrum of care which is given to the patient, unlike in the U.S. or the U.K., where the standard of care is a very small band and the best and the worst fall within the band. In India, the best hospital is probably on par with or better than some hospitals in the West, but the worst hospitals are really bad. So, it is very difficult to come up with guidelines to cover this entire spectrum of population and healthcare delivery.
