Framework for unlocking the economy: Scenarios and Choicesfeatured

(Manish Agarwal (Infrastructure specialist &AskHow volunteer) and Sanjay Srivastava (Integrated industrial ecosystem professional) ask, How would the lockdown be released? This is an indicative framework, intended to provide structure to a crucial dialogue. All views are personal).

Why do we need an unlocking framework:

1. There is general appreciation that lockdown was an unanticipated necessity, with the singular objective of containing the spread (even though the Disaster Management Act 2005, required preparation for such scenarios, but more on that at the right time). The unwinding of the lockdown will be more complex, with multiple conflicting objectives, in an uncertain environment. The race to achieve medical readiness in each district, will have to be run in parallel with continuing production and supply of essentials. The list of essentials will expand over time, to both, service demand and maintain livelihoods. Large parts of the population do not have deep savings to survive an extended period of inactivity. Even with Central & State Govts DBTs (which is also limited), it is quite likely that people will begin to violate the curfews. The time to develop the blueprint for unlocking is now; not least because several stakeholders will need to be consulted and onboarded to the unlocking plan.
2. While we have proposed several dimensions of the “unlocking framework”, we recognise that this is neither complete in coverage, nor has sufficient depth. The intention is to start a discussion, so that the most important issues, and their interdependence, is better understood. We are convinced that a simple approach of opening up the unaffected districts will not have an impact on the manufacturing sector, for instance, considering the widespread domestic supply chain.
   What are the elements of an unlocking framework ?
3. Where? Two tests should inform the decision on where to start unlocking. (I) Medical readiness – i.e extent of impact, rate of growth, depth of medical facilities and ability to ramp up medical support. (II) Criticality to the domestic supply chain – i.e role in providing labor, raw material, production or market for key goods and services. The “per capita infections” measure is misleading, and not helpful, at the country level. We need to look at this at State level, and at district level, considering our size. This could also provide the decision-structure for unlocking more areas as they achieve the desired parameters (and, to roll back, if the situation deteriorates). The Domestic Supply Chain will need to get re-aligned, and there will be difficult political implications. It is critical that there is an objective, independent approach that can minimise politicisation of this process.
4. Who (or in what sequence)? The first priority has to be to ensure that the production and supply of essential services gets reinstated, lest we consume away the reserves. The next question, as to what is “semi-essential” and what is “discretionary” is more challenging. It is perhaps easy to agree that businesses like entertainment, sports and tourism are discretionary, and could remain closed for longer, to avoid crowds. But what about manufacturing and sale of TVs and ACs ? And, manufacture of a component that goes into both, ACs and Medical equipment like ventilators ? A simplified approach will need to be quickly developed, to avoid protracted lobbying. A mechanism to support businesses that get classified as “discretionary” is equally critical for success.
5. How? To achieve a balance between minimising spread of infection and enabling economic activity to commence, there will be a need for “Sanitised Workplace Guidelines” for different business environments. Construction sites (including NREGA sites) would perhaps be a useful place to start, considering the employment potential, and the ability of the Govt to put money into the economy (besides the benefits of completing infra projects). The Guidelines would need to address not only the site operations, but also transport and living conditions of the workers.
6. The Transport & Logistics industry is uniquely critical to the problem and the solution. It was shut down to stop the spread; and the revival cannot take place without opening it up. As the Domestic Supply Chain gets realigned, it would be important to open up the Logistics sector at least 3-5 days ahead of the others. In absence of this, there is likely to be much chaos as trucks may not be available to connect to rail, workers may not be able to reach workplaces, ports may not be ready, etc. This is critical for factories that have ready finished goods, which can be quickly got to the market; particularly for exporters who can fulfil their orders, or want to grab the opportunity available in global / regional supply chain realignment.
7. The governance system for managing such a plan, which will need to remain dynamic to adapt to evolving situations on the medical front, will need to be innovatively designed. This will need to be a cooperative approach as a combination of a top down directive, supported by state, district and city administrations. Local administration would need to be given the flexibility to act within broad guidelines. Indeed, several of them are doing that at present, leveraging private sector and civil society. Industry associations will need to play a very mature role, going well beyond lobbying from a short term perspective alone. Technology will be key to decision making, monitoring and sharing (again, several administrations have demonstrated a high level of readiness to do this, in managing the current and earlier crises). The State and Central Govts will need to have multi-competency task-forces, which can help to quickly weigh trade-offs between medical and economic risks, which will invariably arise.
8. Need for measures to support impacted people and businesses, through this revival process. Some steps have already been taken for both, and others are likely to follow. Encouraging consumption will not only require putting money in the hands of the most needy, but also to provide consistent and transparent communication in the near future. Businesses will need to be given flexibility to share the pain with their employees, particularly those who are being supported by the Govt. The guidance to businesses to continue paying salaries is not sustainable. This holds true for the Govt also. While the fiscal limits will certainly be breached, it is necessary that the Govt conserves its fiscal powder, considering the uncertainty of the time and extent of the medical emergency.
9. Accelerate priority opportunities. Initiatives that will yield results in the medium term will need to proceed in parallel with the above immediate steps. Some of these were anyway on the agenda for accelerating economic growth. Prioritising construction of infra that will have quicker impact on the economy and on job creation, continues to be necessary. More approvals may need to be put on self-certification, at least for the interim; shortening the project preparation time has always been a need, which is further underlined in the current context. The Govt will need to work with State Industrial Development Corporations and Private Industrial Parks to prioritise industrial investments that can be fast tracked. This constituency will be critical to the ambition of positioning India as a leading alternative in “China+1” Strategy for global and regional value chains of global manufacturing layers, in due course.
10. Communication and Course Correction. Through the two week lockdown period, communication from the Govt has increased, but much more will be needed as we enter the more complex phase. In addition to sharing progress, proactive communication of future measures will help administration and citizens in suitable planning & execution. This will reduce any conjecture and rumours. It is important that key stakeholders, particularly the media, recognise that the leaders are taking decisions in the face of uncertainty, while the commentators have the benefit of hindsight. In fighting an evolving pandemic situation, it is inevitable that decisions have to be revised based on developments. Regular transparent communication will be critical to appreciation of the decisions and course corrections, as the unlocking gets planned and implemented.
11. In conclusion, we believe that a multi-dimensional plan is necessary for this unprecedented challenge encompassing business, human & life variables. It is also a unique opportunity, as large demand centers and production centers of the world continue to be locked down. We believe parallel progress along the following tracks is required:

• A calibrated unlocking, recognising the regional inter-dependencies, along with safety & sensitivity
• Supporting workers, but also businesses, in reviving demand where possible, and easing the pain where it is not
• Synergising the enthusiasm and energy of private sector, civil society and individuals who are keen to participate in the disaster management process.

If we do this well, India emerges as a considerate country for its citizens and stronger economic powerhouse apropos its stature & potential.

#StaySafe #StayHome #IndiaFightsCorona
(With inputs from Sandeep Achantani, Biju Potty, Anirudh Dange, Pramad Jandhyala and Yogesh Upadhyaya, who are all professionals, running businesses for over 25 years).
https://www.linkedin.com/in/sanjays
https://www.linkedin.com/in/manish-agarwal-0985774