The need of the hour is economic progress

It goes without saying that we can’t have a life without crisis. Therefore, that is not the point. The point is that all crises — manmade or natural — affect the ordinary most. They also make the well-off pay, but it is the hoi polloi that mainly get crushed under their weight.  

The pandemic — unsparing, unbearable, murderous — once again reinforced the above belief. The hardest hit have been the daily wage earners. The list includes vegetable and fruit vendors, rickshaw drivers, masons, carpenters, rag-pickers. They have been starving. Their families have been suffering. Some leaders have taken action on the issue. In a move towards helping them, Delhi Chief Minister Arvind Kejriwal announced free food for tens of thousands of ration card holders.   

Therefore, all of us read with immense pleasure a report saying the world economy was kind of recovering. The trickle effect of the progress was bound to reach the weakest of the weak.

The global economy has surpassed its pre-pandemic peak, data survey firm IHS Markit said earlier this week, thanks especially to vaccination and the end of pandemic-related restrictions.

Therefore, we were left worried after discovering through a report that US President Joe Biden was expected to fall short of his commitment to shipping 80 million COVID-19 vaccine doses abroad by the end of June because of regulatory and other hurdles. Officials informed that while the US-produced doses are ready, deliveries have been delayed due to logistical and regulatory requirements. A White House official said shipments would go out as soon as countries are ready to receive the doses and the administration sorts out logistical complexities.

IHS Markit, which conducts monthly surveys of businesses that are highly valued by the market as a leading indicator of economic activity, forecasts that with 6.0 per cent growth this year the global economy will post its biggest expansion in nearly 50 years.

 “The global economy has reached an important milestone in the second quarter of 2021, surpassing the pre-pandemic real GDP peak attained in the fourth quarter of 2019,” the firm said. The second quarter ends at the end of June. The Asia-Pacific region recovered from the pandemic recession at the end of last year because of the resilience displayed by the Chinese economy.

IHS Markit’s economists estimated that the US real GDP hit a new peak in May. The firm estimates that Africa will return to pre-pandemic GDP in the third quarter that begins in July.

Europe and Latin America will complete their recoveries in the final quarter of this year.

“As recovery from the COVID-19 recession is completed, the global economy is moving into the sweet spot of the current expansion,” said IHS Markit’s executive director for global economics, Sara Johnson.

“World real GDP growth is picking up from an annual rate of 1.5 per cent quarter on quarter in the first quarter to rates of 6.0-7.0 per cent over the remainder of 2021,” she added.

IHS Markit’s 2021 global GDP growth forecast is in line with that made by the International Monetary Fund in April. However, the IMF emphasised the unevenness of the recovery and said it expects many nations will not recover to pre-pandemic levels until 2022 or 2023.

The World Bank has warned about the recovery leaving some nations behind, especially given the lack of vaccines in many countries.

Granted that recovery was bound to be unsteady, but it is better than zero economic progress. Millions have been felled by lack of food, rendered homeless and left to their fate by the authorities during the pandemic months. Only a healthy economy can revive their lives. The rich countries should go out of their way to pull the ordinary out of the cesspool of hardship.