The Economy Can Survive The Coronavirus, But Not A Costly India-China War

 

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The India-China border flare-up couldn’t have come at a worse time (Photo: Pixabay)

The Last Word By Awbuck Qandoe

May 29, 2020, New Delhi: There’s an uneasy wind blowing across the tense India-China border in Ladakh these days – winds of mutual distrust; winds that signal a disturbing face-off between two military powers; winds that threaten to spin into an ugly storm of conflict too costly to wage. Even from thousands of miles away from the harsh contours of the Ladakh landscape, you can almost hear the beating of the drums of war.

Riddled by the coronavirus pandemic and battered by an unaffordable lockdown, both India and China simply can’t afford a full-scale battle in these ominous times. An expensive border engagement would simply bleed the two countries’ economies dry. Yet, the prospect of war is exactly where New Delhi and Beijing appeared to have been headed till earlier this week – until the two governments miraculously decided to loosen the grip on the trigger for the time being.

    Also Read: Is America Leaving WHO Or Is WHO Leaving America Out?

Forget a full-fledged border war, even if India and China lock horns in a standoff along the lines of the 2017 Doklam crisis, that itself would be destabilising enough for the two governments that are still licking their wounds from the virus-induced battering.

 

WHERE’S THE MONEY TO FIGHT A WAR?

Covid-19 has dealt a blow to the two economies so painful that they will now need decades to recover from the unfolding impact. The immediate physical damage caused by the coronavirus in India and China doesn’t look as scary as the numbers of devastation in the US, Russia, Brazil or UK. India and China have reported well under 5,000 coronavirus deaths each so far. That’s nowhere close to the 100,000 killed in the US or the nearly-40,000 fatalities in Britain.

But it is the economic damage – the ‘economic axe’ rather – that has caused a much, much deeper impact in India and China, literally dispatching the two populations to the gallows. And there’s no end in sight to the dent the two economies are taking every day, every minute.

 

THE SOUP THAT CHINA IS IN

According to a revealing article published by Time, data shows China’s economy shrank 6.8% in the opening quarter of 2020, and during this spell, more than a staggering 450,000 firms were forced to wind up their businesses. Investors naturally developed cold feet as the registration numbers of new firms plummeted by almost one-third year-on-year between January and March, the Time report says.

The report adds that it’s the first recorded contraction of China’s economy “since before Mao-era collectivisation was abolished in the late 1970s”.

China’s National Bureau of Statistics points to a similar economic mess, disclosing that in January and February, the country’s industrial output collapsed by a staggering 13.5%.

Getting China’s economy back on its feet is not as easy as turning on the telly. Lockdowns have sufocated the virus, but they have also left millions of daily wage earners stranded far away from their workshops – from where they earn their livelihoods. Production of goods, for which China has been so well known, was also dealt a debilitating blow by the nationwide curbs. So, China’s famed export system has come to a grinding halt.

 

WHERE INDIA STANDS… RATHER, LIES FLATTENED

Several influential rating agencies, alongside World Bank, had downgraded India’s economic growth forecasts for the fiscal year 2021 with the lowest numbers that the country has suffered in 30 years since the disastrous opening up of the Indian economy in the nineties. The rot didn’t stop there. After an economic relief package was unveiled by the state in May, India’s estimated GDP was scaled down once more, this time to negative numbers, paving the way for a devastatingly deep recession.

According to the watchdog Centre for Monitoring Indian Economy, in less than a month of the opening spell of the country’s coronavirus shutdown, the unemployment level catapulted from 6.7% in mid-March to 26% in mid-April. The CMIE as well as other watchdogs also reported that about 140 million people in India went jobless during the lockdown period. A report published by Scroll.in says more than 45% of the households across India have experienced a decline in income.

India has been witnessing an unprecedented surge in reverse migration after a stifling lockdown set in in March end. The state has miserably failed to provide basic food to these people on the road. These stranded masses have had no access to their constitutional rights, underlining the inability and shortsightedness of the state, which has visibly been caught up in struggling to manage the free-falling economy.

So, it’s a no-brainer that we have here two countries with their economies in dire straits. In such a situation, how wise or suicidal is it for these two military powerhouses to escalate border tensions and furiously engage with the neighbour?

War in times of pandemic is not just a question of affordability. It is simply out of the question.

Can the Narendra Modi administration afford a war now? Even a lengthy border escalation? Out of the question. Where’s the money for it? Can Xi Jinping and his country afford to invite India for an expensive and toxic fight along the border? No way. Where’s the moolah?

Thankfully, diplomatic back-channels have already opened up, and New Delhi and Beijing are sending out cooldown signals to each other, indicating that there’s scope for dialogue and climbdown. It’s not all eyeball-to-eyeball confrontation only. Hands could gingerly be extended to be shaken.

If indeed the escalation in Ladakh freezes and the Galwan Valley build-up fizzles out, millions of people jolted by the pandemic’s economic aftereffects will let out a collective sigh of relief.

Millions on both sides of the dreaded India-China border.

A pandemic is raging out there. If the virus is not killing people, the economic crash certainly is. Flashing the gun is not the bravest thing to do in such tough times. Putting it back in the holster is.

Beijing and New Delhi need to show maturity, not muscle.

 

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