Support for India: The New Normal Approach
July 30, 2020
JICA India Office
The fight against COVID-19 in India is now at a critical stage. As the number of people infected with the disease continues to increase, inadequate health care systems and restrictions on economic activities have emerged as serious challenges. As a result, international organizations have forecasted a negative rate of economic growth this year for the first time in 40 years. The increase in unemployment is hurting the livelihoods of hundreds of millions of poor people in particular and will have a negative impact on children's health and educational opportunities. Due to its vast population size, India faces a bigger challenge in comparison to other developing countries, in its efforts to deal with both control of COVID-19 and with revival of economic activities.
During the lockdown period in the months of April and May this year, we all noted that various economic indicators such as production, unemployment and trade volume have worsened significantly. Small and medium-sized enterprises (SMEs) and others have been struggling for cash flow, and many financial institutions have offered a moratorium on loan repayments. India's migrant workers, estimated to be more than 100 million, have faced serious risk of losing their jobs due to the shutdown of construction projects and factories/enterprises in urban areas. Many lost their source of income and have eventually returned to their hometowns. The Indian labor market has a large informal employment sector that consists of about 80% of the total workforce, and most of the migrant workers are ineligible or unable to access social security regulated by laws. Although the Indian government has been taking urgent steps to support these workers ranging from food distribution to cash transfers, the COVID-19 epidemic has clearly highlighted the problem of this unique labor structure in India. Thus, the challenges on the economic front, in the short run, include providing financial support for small and medium-sized enterprises, expansion of social security and employment opportunity for the migrant workers and the normalization of supply chains for industries.
In relation to business activities, according to a recent survey of Japanese companies in India, about 80% of the companies among those that responded are facing a decline in sales, and about 90% are experiencing problems with their supply chains. In addition, about 80% of the employees and staff, who were in India, have already returned to Japan. This percentage is much higher in comparison to other countries such as ASEAN countries. The inadequacy of the medical/healthcare system in India was the main reason for Japanese employees returning to Japan. Therefore, the demand for securing a well-developed lifeline system is quite high among foreign companies in India.
The number of COVID-19 cases exceeded 700,000 by the beginning of July, making India the country with the third highest number of cases in the world after the United States and Brazil. In response to the increase in the number of cases in Delhi, the state government has implemented a number of measures involving both private and public hospitals. The state government has issued directions to increase the number of beds dedicated to COVID-19 patients and has planned to add more than 100,000 beds by the end of July. In terms of numbers alone, the scale of this plan is equivalent to creating 500 new large hospitals (200 beds). Based on my personal interactions with Indian people around me (JICA employees, apartment security guards, etc.) about the corona test, I learnt that many people do not go to the hospital even when they have symptoms. This is primarily due to high risk of infection in hospitals and also because of the high cost of medical care. Indeed, some of the private hospitals in Delhi were forced to improve their capacities by the state government due to sanitation issues and their inadequate response to the pandemic. There have been media reports about patients who were compelled to spend exorbitant sums of money amounting to hundreds of thousands of rupees (about 1.5 times that amount, when converted to Japanese yen) for treatment of COVID-19. There are also frequent stories about refusal to accept patients by hospitals. Even in the case of common illnesses, low-income slum dwellers and migrant workers are hesitant to go to the hospital. Therefore, one can assume that a large proportion of them would prefer to stay at home and adopt home remedies, if they have symptoms of COVID-19.
Under the current circumstance, what kind of cooperation can JICA possibly provide for India? From the beginning of the lockdown, we have collected information on the impact of COVID-19 provided by government agencies, including the Ministry of Health, international organizations such as the World Bank, commercial associations, NGOs and other organizations. In order to work out effective support, we need to prioritize the necessary measures from a short- to medium-term perspective. A choice of measures with a high degree of feasibility is needed. For example, as an immediate response to cooperation, in the case of agricultural projects supported by JICA's loan, mobile applications were developed to connect farmers directly with sellers and consumers. The farmers were able to sell seasonal mango and other harvests through direct sales. In other cases, the children's hospital in Chennai, which was built with Japanese assistance, and training centers in other areas have been used to provide COVID-19 medical services in cooperation with the state government. In addition, we continue to discuss with the central government about formulating emergency assistance programs to support the COVID-19 control measures in the health sector and also to strengthen social security systems. As a meta-policy, we put emphasis on supporting poor families facing health problems and income shortage due to the impact of the COVID-19 pandemic.
On the other hand, when we looked at the field of COVID-19 countermeasures, we found that a wide array of organizations such as NGOs and social enterprises, as well as government agencies and medical institutions, were very active on the frontlines. They have worked at distributing food to migrant workers and other unemployed people, preventing child labor, developing mobile applications connecting grocery stores to households, producing face shields for medical professionals using 3D technology, developing a ventilator that can serve two patients at the same time, and other measures. In fact, the speed and the extent of implementation has been quite astonishing!
Traditionally, there have been certain restrictions on JICA with regard to partner agencies, who can be involved in implementing the development projects supported by JICA. So, JICA's assistance has been limited mainly to government agencies, while cooperation with other development players such as local NGOs and social enterprises has been limited. However, the COVID-19 pandemic provides a good occasion to change this. Even if direct financial support is difficult to provide, we can connect NGOs with people and institutions who can support them. Opportunities also exist to facilitate matchmaking between social enterprises and Japanese companies. There are definitely a number of ways in which JICA can help connecting various development organizations in an effective way.
With this in mind, the JICA India Office has worked to create a new platform that connects social enterprises in India with Japanese companies. This "SDGs Business Co-Creation Lab" was recently launched. In addition, a similar idea to create platforms for Indian NGOs and other stakeholders is currently under consideration. Further, we are planning to conduct a survey on corporate social responsibility (CSR) initiatives by companies in India to seek a more effective mechanism to facilitate collaboration between the commercial sector and civil society.
The response to the COVID-19 pandemic may be a turning point for us to establish a new framework of cooperation. Promoting collaboration with multiple development players is becoming a reality. It is an opportunity to re-think freely and boldly and to improve the development framework and modalities of support to enhance the outcomes and impact of our work. In this sense, there is a need to emphasize new forms of support which I would like to highlight as “embracing the concept of the New Normal.”