Twice every year, in April and in October, the International Monetary Fund releases its World Economic Outlook (WEO) database. It contains detailed estimates and predictions on every possible economic parameter of virtually every country in the world.
This April, in an unprecedented move, the IMF released a near empty WEO report, containing a few topline figures on a couple of the most watched parameters. And a handful of predictions, pretty much all of which proved to be wildly off the mark.
And no serious person would blame them for being off the mark. Predictions depend on models. With the Coronavirus, all bets are off. There are no precedents and therefore no reliable models. The best minds and best algorithms in the world are working blind. The IMF realizes this too, which is why they made few predictions as it is. This October, they have released a more detailed report, but it’s all guesswork, really.
So why would media seize upon this one prediction from the IMF report?
And then there are these people.
I won’t blame Rahul Gandhi. He is jealous of PM Modi and is generally not very bright. Faye D’Souza and Shekhar Gupta are media people and they don’t know anything about anything. But there is Kaushik Basu, allegedly an economist with a reputation to protect. What’s his excuse?
Okay, so let us read the same IMF report. Doesn’t it also predict that India will see a GDP growth of 8.8% next year, making us the world’s fastest growing economy? Doesn’t the same IMF report also say that this is a one year blip and India will easily pull ahead of Bangladesh in per capita GDP next year? Like I said, predictions mean very little in the Coronavirus era. But the question is why one piece of fiction is more headline worthy than another? Politics, right?
Here is a piece of real data. Did you know that from independence to 2006, India’s per capita GDP was always less than Pakistan? Yes, in all those decades with all those Bharat Ratna winning Prime Ministers that we read about in history books, India was always struggling behind Pakistan. I’m linking to the World Bank database. Dear Kaushik Basu, feel free to check my data. Shekhar Gupta and Faye D’Souza, let me know if you can read a simple graph. Dear Rahul Gandhi, feel free to tweet about this any time. Sixty years to catch up to Pakistan!
Let us now come back to the general foolishness of making predictions in the era of Coronavirus. After an absolutely horrible first quarter of the Financial Year, India’s economy did so well last month that they’re calling it the “September surprise.” Will this continue? We have literally no idea. Anything is possible.
It isn’t just India. After contracting at a record pace in April, the UK economy surged to a remarkable 9.1% growth in June. Expectations improved and economists thought they would get around 5% in August. The real number : 2.1%. Has anybody heard of such dizzying variations in such a short amount of time? That too for a highly formalized economy like the UK. Imagine now what predictions mean for India in this environment. And predictions for Bangladesh? Seriously?
Everyone is driving blind: policymakers, economists, stock brokers, entrepreneurs and consumers. Nobody knows what will work and why. Except, of course, for journalists who have two eyes properly fixed in the back of their heads, with perfect 20/20 hindsight.
Seriously, does anybody know when or where cases will surge, or when we might have to impose the next lockdown? Here is the Coronavirus curve for France.
So 22,591 new cases in France yesterday and 105 deaths. France has 6.5 crore people, comparable to say Gujarat. The numbers for Gujarat yesterday: 1175 new cases and 11 deaths.
Did you know that France’s healthcare system is ranked the best in the world by the WHO? That’s how it fared.
Right now, cases in India are on the decline. Can anybody really say when they could start exploding again? The Mumbai local trains start today: will that lead to disaster? We don’t know. But how long could we have kept them from running?
And yet, the international press and even domestic media is on the offesive against India. The accusation: why is India doing as badly as the US?
Uh, excuse me? A generation of Indians who were ready to sacrifice everything for a chance to send their kids to American shores just had a heart attack. In 2019, the Indian government announced that we finally have enough toilets. We weren’t quite ready with one ventilator per Indian, so forgive us for that.
If one year ago, I had told you that in a pandemic, India would fare just as well or even better than the US or Western Europe, you would have laughed at me. And yet, here we are: The US has 657 deaths per million. France has 485. Sweden has 579. Canada has 262 deaths per million. How about India?
We have 82 deaths per million, among the lowest in the world. Smearing India by claiming that we are undercounting deaths can only go so far. It cannot explain the huge gulf between 82 deaths per million and 657 deaths per million.
If one year ago, I had said that in a health crisis, Bihar would emerge as the superstar and Kerala as the worst performer, would you have believed me?
So that’s Coronavirus. It has taken every reputation and every form of ego, put them in the juicer and spun them around at top speed. We are dealing here with an enemy more powerful than we can even imagine. It can turn everything upside down.
The small minds cannot understand this. And some big minds don’t want to understand this. A few months ago, they told us about the Kerala model of fighting the virus, apparently the best in the universe. That flopped miserably. Now they have a new pitch: the Bangladesh model of economics.
But there is the old saying about fools rushing in where angels fear to tread.
The Nobel Prize for arrogance and ignorance must therefore go to Mint, which did a “deeper analysis” of the IMF data. What did they find? That while Bangladesh will again fall behind India in per capita GDP from 2021 onwards, they are projected to beat us one more time in 2025!
Hey Mint, we don’t know what the virus could do to us in the next one year, let alone five. We literally have no idea what could be the after effects of this virus on the human body. Are those who look like they are recovered really recovered? Will they survive five years? We have no idea. Did you see how the search for the vaccine keeps stalling? And if there is a vaccine, where is the time to do a decade long study of possible side effects? Who knows … the vaccine may be more dangerous than the virus itself. Maybe we all take the vaccine and then it gives us all cancer in five years. Yeah, we could all die. It’s a real possibility. This could be the end. Like seriously.
There is no scientific principle that says things will always turn out fine for humanity. We are tiny beings on a speck of dust orbiting a moderate sized star in one galaxy among billions in the universe. We could disappear tomorrow and it wouldn’t matter one bit.
Let me explain how dire the situation is. As on date, the survival of humanity itself is hanging in the balance. And you’re reading predictions about 2025. Good, we need the optimism. And a clown to laugh at.