Put livelihoods above lives; V-shaped recovery on: Jim O’Neill

Mumbai: Livelihoods, and not lives, should take precedence at this point of time, and aggressive lockdowns are not the best solution to curb the spread of Covid-19 infection, says former Goldman Sachs Chairman Jim O’Neill.

Most major economies opted for a strict shutdown earlier this year, in an attempt to limit the spread of the new coronavirus pandemic. These decisions had serious economic implications, and hurt businesses across the spectrum.

Despite such lockdowns, the global death toll due to the pandemic has crossed the 1 million mark, and total infections have surpassed 33 million. The pandemic has spread across continents, from New York City to Tokyo, and from slums to plush high rises.

“The first reaction in some countries was just to have very aggressive lockdowns. Evidence is starting to show it is not a small policy, because all you know is it will destroy your own economy,” O’Neill said in a phone interview from the United Kingdom.

While India started unlocking in phases since June, select states declared fresh shutdowns in certain cities and towns that were emerging as hotspots, further hitting businesses that were trying to make an attempt to sit up.

O’Neill was of the view that countries should find more sophisticated ways of protecting the most vulnerable age and health groups and try to learn to live with this virus after better treatments and, in particular, vaccines are found.

“So, I certainly do not think we can pursue policies just to protect lives from Covid that does not make sense to me anymore anyhow,” he said.

Between lives and livelihood, the latter was getting to be a better choice, argued the British economist.

“Ultimately, it has to be more about livelihoods, because the correct measure to look at really is what people call excess deaths, not just deaths from coronavirus. It is how many deaths are taking place relative to the normal trend,” he said.

“As we are finding, if you have too much economic suffering, you are going to end up causing a lot of problems of mental illness and other illnesses, which grow out of poverty,” he warned.

Currently, European countries are facing the second wave of infections, and a few have imposed fresh curbs to restrict movement of people. Some are also deliberating on fresh lockdown measures.

While experts across the world debated different letters in the alphabet to project the shape of economic recovery from the Covid disruption, O’Neill said it was likely to be a V-shaped recovery, as earlier projected.

“I actually think at least in the near future, there were some pretty strong signs that we are seeing a V-shaped recovery. From a classic economic perspective, it looks like a V-shaped recovery to me and that is even before we do have any vaccine,” he said.

He acknowledged that there were many burning and complex questions relating to taxes, interest rates, social policies and the like -- that demand answers, and the decade ahead could be a difficult one.

“But over the next year I think we are probably going to get some kind of V-shaped recovery,” he said.