Commentary on Political Economy

Friday, 30 April 2021

 

India Covid crisis: government ignored warnings on variant, scientists say

Country’s government failed to impose extra restrictions despite warnings of a new, more dangerous strain in early March, experts claim

A relative of a person who died of Covid-19 breaks down during cremation in Jammu, India, Sunday, April 25, 2021. India’s crematoriums and burial grounds are being overwhelmed by the devastating new surge of infections tearing through the populous country with terrifying speed, depleting the supply of life-saving oxygen to critical levels and leaving patients to die while waiting in line to see doctors. (AP Photo/Channi Anand)
A relative of a person who died of Covid-19 breaks down during cremation in Jammu, India, Photograph: Channi Anand/AP
Reuters
Sat 1 May 2021 06.53 BST

A panel of Indian scientists warned officials in early March of a new and more contagious variant of the coronavirus taking hold in the country, it has emerged.

Despite the warning, four of the scientists said the federal government did not seek to impose major restrictions to stop the spread of the virus, Reuters reported on Saturday. Millions of largely unmasked people attended religious festivals and political rallies that were held by prime minister Narendra Modi, leaders of the ruling Bharatiya Janata party and opposition politicians.

Tens of thousands of farmers, meanwhile, continued to camp on the edge of New Delhi protesting Modi’s agricultural policy changes.

The world’s second-most populous country is now struggling to contain a second wave of infections much more severe than its first last year, which some scientists say is being accelerated by the new variant and another variant first detected in Britain.

‘We are witnessing a crime against humanity’: Arundhati Roy on India’s Covid catastrophe Read more

India reported another world record 401,993 new coronavirus cases on Saturday, while deaths from Covid-19 jumped by 3,523 over the past 24 hours. Experts believe the real figures are far higher.

Compounding the misery, a fire broke out in a Covid-19 hospital ward in western India early Saturday, killing 18 patients. The fire, which broke out at the Welfare Hospital in Bharuch, a town in Gujarat state, was extinguished within an hour, police said. The cause was being investigated.

The spike in infections is India’s biggest crisis since Modi took office in 2014. It remains to be seen how his handling of it might affect Modi or his party politically.

INDIA-POLITICS-VOTEA supporter of Bharatiya Janata Party (BJP) wearing a face cutout of Indian Prime Minister Narendra Modi attends a public rally being addressed by him during the ongoing fourth phase of the West Bengal’s state legislative assembly elections, at Kawakhali on the outskirts of Siliguri on April 10, 2021. (Photo by Diptendu DUTTA / AFP) (Photo by DIPTENDU DUTTA/AFP via Getty Images)
Indian Prime Minister Narendra Modi and his BJP party continued to hold election rallies despite fears of a surge in Covid infections Photograph: Diptendu Dutta/AFP/Getty Images

The warning about the new variant in early March was issued by the Indian Sars-CoV-2 genetics consortium, or Insacog. It was conveyed to a top official who reports directly to the prime minister, according to one of the scientists, the director of a research centre in northern India who spoke on condition of anonymity.

Reuters could not determine whether the Insacog findings were passed on to Modi himself. Modi’s office did not respond to a request for comment from Reuters.

Insacog was set up as a forum of scientific advisers by the government in late December specifically to detect genomic variants of the coronavirus that might threaten public health. Insacog brings together 10 national laboratories capable of studying virus variants.

Insacog researchers first detected B.1.617, which is now known as the Indian variant of the virus, as early as February, Ajay Parida, director of the state-run Institute of Life Sciences and a member of Insacog, told Reuters.

Insacog shared its findings with the health ministry’s National Centre for Disease Control (NCDC) before 10 March, warning that infections could quickly increase in parts of the country, the director of the northern India research centre told Reuters.

The findings were then passed on to the Indian health ministry, this person said. The health ministry did not respond to requests for comment.

Around that date, Insacog began to prepare a draft media statement for the health ministry. A version of that draft, seen by Reuters, set out the forum’s findings: the new Indian variant had two significant mutations to the portion of the virus that attaches to human cells, and it had been traced in 15% to 20% of samples from Maharashtra, India’s worst-affected state.

‘We are not special’: how triumphalism led India to Covid-19 disaster Read more

The draft statement said that the mutations, called E484Q and L452R, were of “high concern.” It said that mutated versions of the virus could more easily enter a human cell and counter a person’s immune response to it.

The ministry made the findings public about two weeks later, on 24 March, when it issued a statement to the media that did not include the words “high concern”. The statement said only that more problematic variants required following measures already under way – increased testing and quarantine.

Naked Hindu holy men take holy dips in the Ganges River during Kumbh Mela, or pitcher festival, one of the most sacred pilgrimages in Hinduism, in Haridwar, northern state of Uttarakhand, India, Monday, April 12, 2021. They believe that a dip in holy water will wash away their sins and prevent rebirth. One prominent Hindu religious leader died of COVID-19. India has been overwhelmed by hundreds of thousands of new coronavirus cases daily, bringing pain, fear and agony to many lives as lockdowns have been placed in Delhi and other cities around the country. (AP Photo/Karma Sonam)
Hindus take dips in the Ganges River during Kumbh Mela, or pitcher festival, one of the most sacred pilgrimages in Hinduism, in Haridwar, India Photograph: Karma Sonam/AP

Asked why the government did not respond more forcefully to the findings, for example by restricting large gatherings, Shahid Jameel, chair of the scientific advisory group of Insacog, said he was concerned that authorities were not paying enough attention to the evidence as they set policy.

“Policy has to be based on evidence and not the other way around,” he said. “I am worried that science was not taken into account to drive policy. But I know where my jurisdiction stops. As scientists we provide the evidence, policymaking is the job of the government.”

The northern India research centre director told Reuters the draft media release was sent to the most senior bureaucrat in the country, cabinet secretary Rajiv Gauba, who reports directly to the prime minister. Gauba did not respond to a request for comment.

The government took no steps to prevent gatherings that might hasten the spread of the new variant, as new infections quadrupled by 1 April from a month earlier.

Modi, some of his top lieutenants, and dozens of other politicians, including opposition figures, held rallies across the country for local elections throughout March and into April.

The government also allowed the weeks-long Kumbh Mela religious festival, attended by millions of Hindus, to proceed from mid-March. Meanwhile, tens of thousands of farmers were allowed to remain camped on the outskirts of the capital New Delhi to protest against new agriculture laws.

“We are in a very grave situation,” said Shanta Dutta, a medical research scientist at the state-run National Institute of Cholera and Enteric Diseases. “People listen to politicians more than scientists.”

The Indian variant has now reached at least 17 countries including Britain, Switzerland and Iran, leading several governments to close their borders to people travelling from India.

 

MODI-FYING A TYRANT

Grief and anger as Covid victims overwhelm Delhi’s crematoriums

Family members perform last funeral rites at the Ghazipur crematorium. Photograph: Naveen Sharma/Sopa Images/Rex/Shutterstock

As bodies pile up at the Ghazipur crematorium, staff and relatives turn their ire on the Modi government

by  in Delhi

Last modified on Fri 30 Apr 2021 19.41 BST

The bodies came, one after another, after another, after another. So many bodies that the ambulances and trucks carrying them into the crematorium blocked traffic.

In Delhi, a city where someone dies from Covid-19 every four minutes, every day is a battle not just for hospital beds but for a space to say goodbye to the dead with dignity.

The official capacity at the Ghazipur crematorium in east Delhi is 38 bodies, and before the pandemic, only once in living memory had all the funeral pyres been taken in one day. Now, as a deadly second coronavirus wave sweeps the capital, sometimes 150 bodies have already arrived by early morning. The staff have expanded operations into the car park, but its not nearly enough.

In India’s capital, the virus is showing no sign of abating. On Friday morning, Delhi registered another record-breaking 395 deaths, and 24,235 cases. Across India, the total number of new confirmed new cases was 386,693, another global record. Crematoriums are expanding at a rapid pace, attempting to increase capacity to cope with 1,000 cremations a day.

A mass cremation of Covid-19 victims is seen at Ghazipur cremation ground in New Delhi.
So many bodies are being given their late rites here that the air is pungent and sour, thick with the smoke of thousands of recent cremations. Photograph: Naveen Sharma/Sopa Images/Rex/Shutterstock

It is here, among the pyres that get rebuilt every day for the Hindu and Sikh last rites, that the devastation caused by Covid-19 in the capital is most viscerally felt. Most lost their lives because families could not get them a hospital bed, could not get them oxygen. Some got to hospitals only for the hospitals to run out of oxygen.

Sitting on the floor wearing PPE in the sweltering Delhi heat, sobbing into his hands and wiping sweat from his brow, Rakesh Kumar, 36, described how his family had driven to every hospital in Delhi and in the neighbouring city of Noida when his mother, Sumitra Devi, had begun to struggle for breath as her oxygen crashed. But the 56-year-old never got a bed, and she died on Thursday morning.

“We tried so many hospitals but even when her oxygen went down to 40% we could not get her a bed,” said Kumar. “We kept going to hospitals where we were told there was availability of beds but every time, the hospital said they were full. If we could have got her a bed or got her oxygen in time, we could have saved her. But she didn’t even get a chance to survive.”

Like many laying their dead to rest, he was angry. “The government has failed its citizens, why could it not give us the healthcare that we need?” said Kumar.

In his 30 years helping to cremate the dead, Sunil Kumar Sharma, who is the head of Ghazipur crematorium, said he had never imagined such scenes. “So many dead,” he said. “It feels like if this continues, there will be no one left in Delhi.”

India: drone footage shows makeshift mass crematorium in Delhi – video
India: drone footage shows makeshift mass crematorium in Delhi – video

Though there is supposed to be strict protocol on handling the bodies of coronavirus victims, Sharma said hospitals often sent corpses over without any protective wrapping, risking exposing his staff to the virus. Some families, he said, tried to hide that their relative had died of Covid-19.

‘The system has collapsed’: India’s descent into Covid hell Read more

“It’s been terrible here, and very scary,” said Sharma. “We work for 20 hours every day now. I am so tired and my soul feels broken by what is happening. People are now dumping the bodies and running away, so we have to perform the last rites instead so these bodies still have some dignity.”

The crematorium gets through 60 tonnes of wood per day. “At night, I worry about how we will handle tomorrow when more bodies come,” said Sharma. “What if there are just too many for us?”

With so many bodies being given their late rites, the air was pungent and sour, thick with the smoke of thousands of recent cremations. The smoky pyres of the day before were still scattered with some offerings, mangoes and pomegranates and bright orange holy flowers that lie in the ash; specks of life in the remnants of death. And there was grief – grief everywhere.

A woman in a dark green sari whispered prayers softly through the ambulance window, where inside her husband, who died that morning of Covid-19, lay wrapped in protective cloth. She tried to put a set of red bangles on his body, but was gently ushered away by a man in PPE trying to move the body.

Ajay Gupta howled in deep anguish as the body of his brother, JJ Ram, was brought into the crematorium and placed on to the pyre. Ram was finally admitted to hospital last week when he struggled to breathe, and had been making improvements, even video-calling Gupta from his bed. But according to the family, the hospital had run out of oxygen, and Ram had perished.

People wearing PPE carry the body of a family member who died of Covid-19, at Ghazipur cremation ground in New Delhi.
People wearing PPE carry the body of a family member who died of Covid-19, at Ghazipur cremation ground in New Delhi. Photograph: Naveen Sharma/Sopa Images/Rex/Shutterstock

“The staff told us just a couple of days ago he would be fine,” said Gupta. Gupta also fell victim to the ruthless market that has emerged in Delhi for oxygen and drugs such as remdesivir, which are sold to desperate family members at exorbitant prices.

Gupta said he had used every penny he had to buy remdesivir for his brother on the black market for 630,000 rupees (£6,100) – more than 10 times the market price – on instruction of hospital doctors, despite questions over its use in treating Covid-19 patients.

“I feel like everything has been destroyed and a hole has been torn in my heart,” said Gupta, who, like many, turned his ire towards the government of prime minister Narendra Modi. “The central government should be blamed for my brother’s death,” he said.

Narendra Kumar, a 26-year-old ambulance driver who picks up Covid bodies every day from homes and hospitals to bring to the crematoriums, also confirmed that most people he was seeing had died from lack of oxygen. “This is a terrible job,” said Kumar. “I am so scared of infecting my family that I don’t go home any more. At the end of the day I just park my ambulance outside Ganga Ram hospital and sleep there.”

Krishnan Pal, 48, who sold the popular Indian snack pani puri in his Delhi stall, was among those who died after repeatedly being turned away from overloaded hospitals when he was struggling to breathe. His cousin, Kali Charan Kashap, said they had tried every hospital in Delhi, but could not get a bed, so they drove him to Agra, a city in the neighbouring state of Uttar Pradesh. In Agra they were told that there were beds, but that hospitals had no oxygen. As they were driving to Bareilly, another city in Uttar Pradesh, Pal died.

“People are literally dying on the roads because they can’t breathe,” said Kashap, through choking sobs, as the family waited for Pal’s body to arrive from the morgue. “India needs oxygen so I ask this government – where is it?”

Relatives stand next to burning funeral pyres of those who died of coronavirus, at Ghazipur cremation ground in New Delhi.
Delhi’s crematoriums and graveyards will continue to bear the burden of death that shrouds the city every day. Photograph: Naveen Sharma/Sopa Images/Rex/Shutterstock

The political implications of the second coronavirus wave on Modi’s government are becoming apparent. According to the Global Leader Approval Tracker, Modi has suffered an unprecedented six-point drop in popularity in the past week, with his approval rating at its lowest ever – though still high at 67% – and his disapproval rating going up to 28%.

Many believe vaccines are the only long-term way out of India’s coronavirus crisis, but Delhi’s citizens were dealt a blow this week when the local government said plans to open up vaccinations to anyone aged 18 and over from Saturday were being delayed indefinitely because of a lack of supplies. Similar shortages are being experienced across India.

Though the Delhi state chief minister, Arvind Kejriwal, said authorities would make vaccines available “as soon as possible”, several private clinics in Delhi said they were not expecting stocks for at least another month or even two.

So for now, Delhi’s crematoriums and graveyards will continue to bear the burden of death that shrouds the city every day. At Ghazipur, as the sun set and all the pyres were finally assembled, they were set alight at the same time – going up in a fiery roar of heat and pain.

 

Jack Ma Paid for Taunting China

Kin Cheung/Associated Press

Ant Group, China’s biggest fintech conglomerate, was preparing last November for its initial public offering. Analysts projected it would raise $34 billion, the largest sale of shares in history. The company, founded by Jack Ma, had become synonymous with financial innovations, which are often risky.

In the run-up to the I.P.O., Chinese regulators trying to assess financial risks on Ant’s books had been brushed off by Mr. Ma. In an audacious speech, he criticized regulators as too cautious and pilloried state-owned banks for their “pawnshop” mentality of providing loans only to borrowers who could post collateral.

Even oblique attacks on China’s government rarely go unpunished. This was a direct provocation. Yet such was Mr. Ma’s aura, and his apparent imperviousness to government strictures, that domestic and foreign investors were unconcerned. They salivated at the prospect of buying shares of Ant — it was, after all, a politically powerful behemoth and indispensable to the economy. Its Alipay platform, which pioneered remarkably cheap and efficient payment technologies, has revolutionized China’s financial system. Other arms of the conglomerate provide consumer credit and small-business loans online within minutes.

Then it all fell apart. Two days before Ant’s shares were to begin trading on the Hong Kong and Shanghai exchanges, the government blocked the I.P.O. Regulators cited the company’s opaque accounting practices, which, they said, could be hiding huge amounts of risky loans. Given Ant’s sheer size, they noted, any problems could roil financial markets and hurt investors.

Thanks to his misstep in openly criticizing the government, regulators have Mr. Ma right where they want him, and intend to make him relinquish control of his empire.

But the government isn’t done. This month, regulators forced Ant to produce a “rectification plan” to restructure the company by separating out its different entities, which include insurance and wealth management services. It had to commit to increasing transparency and improving its accounting and consumer protection practices, in addition to limiting its expansion into new lines of business. It seemed that, in bringing the hammer down on the company, the government aimed to limit its growing economic and political power.

But in so doing, the government spooked investors. Suddenly, President Xi Jinping’s pledges to encourage private enterprise and innovation looked like mere lip service.

The Ant episode seemed to signal an end to China’s era of innovation in fintech. But more broadly, it appeared to mark the cancellation of its experiment in financial-market liberalization and the return to government intervention and a hostile environment for investors. Yet however heavy-handed Beijing’s moves may be, they suggest that it aims to control financial risks, even if the process for doing so looks chaotic.

The episode does send a strong signal about the limits of Beijing’s tolerance of free enterprise. Firms can innovate and grow big but will meet swift retribution if they challenge government policies.

The halt of Ant’s I.P.O. came at a key moment. China’s latest economic figures, released on April 16, confirms its robust recovery from the Covid-19 recession. But to maintain high growth, the country needs to increase productivity of its industries, upgrade technology, and rely less on inefficient state-owned companies — daunting challenges.

During 2020, the government developed a “dual-circulation” strategy to become more economically self-sufficient. It entailed promoting homegrown innovation in industries like telecommunications and green energy, and relying more on domestic sales rather than exports. In part, the strategy is a response to persistent economic tensions with the United States. But it comes alongside an important pivot in government attitudes: The private sector is important for economic development but must follow official priorities and show unswerving loyalty to the government.

Why did regulators not rein in Ant earlier? To put it simply, Ant’s success made the government look good. Its position as a global fintech champion galvanized China’s economy. Ant made digital payments and banking products available to a wide segment of the country’s population, aiding anti-poverty efforts. The Alipay app has over 700 million monthly users, including residents of remote rural areas. Ant has financed some 29 million small businesses, including street vendors.

Perhaps Mr. Ma believed he need not look over his shoulder. After all, for many years, China tacitly tolerated underground financial institutions subject to fewer regulations and less supervision than traditional commercial banks. These outfits, known as shadow banks, offered higher interest rates to depositors and provided credit to riskier borrowers, including small-scale entrepreneurs the government-backed banks ignored. (Eventually, the government clamped down on this sector once it became too risky: rising loan defaults and bank failures meant depositors could lose their savings.)

Ant took advantage of the government’s passive approach to regulating fintech companies, developing a wide range of financial products and services catering to a growing middle class. Mr. Ma used his influence and political power to shield his company from regulatory oversight, even refusing to share its trove of consumer data with the government.

Financial regulators fretted about how Alipay, along with a rival, WeChat Pay, swiftly dominated digital payments, deterring new entrants. Indeed, this has spurred a government project to develop a digital version of China’s currency as an option for digital payments. Ant, they feared, was also harvesting data on its users to judge their creditworthiness and offer them loans on better terms than state-owned banks.

Meanwhile, it could hide any risks from these loans by shuffling its revenues and losses across different arms of its conglomerate. Even while it expanded, as a fintech company Ant could dodge the stringent regulations banks are subject to. In effect, it could become too big to fail.

For fintech firms in China, Ant’s forced restructuring will serve as a template. Competitors like Tencent have been put on notice: Be transparent, comply with regulations, protect consumer data — or else. (China’s government knows only too well how extensive data gathering confers power.) While the government tolerates private enterprise and encourages innovation, entrepreneurs should think twice before voicing overt defiance of the government.

Liberalizing China’s financial system is well and good, but the simultaneous desire to exert government control will hardly encourage innovation or efficiency. Even Beijing, despite its remarkable economic record, will find it difficult to have it all.

Eswar Prasad is a professor at Cornell University and a senior fellow at the Brookings Institution.

 

Apple’s App Store Draws E.U. Antitrust Charge

By forcing app developers to use its payment system and comply with other rules, regulators said Apple broke European Union competition laws.

Image
An Apple store in Paris.
Credit...Sabine Mirlesse for The New York Times

European Union regulators on Friday accused Apple of violating antitrust laws by imposing unfair rules and fees on the makers of games, dating services, music platforms and other apps that depend on its App Store to reach customers.

Amid growing scrutiny of the tech industry worldwide, the case will be an important test of a government's ability to force one of Silicon Valley’s most powerful companies to change its behavior. Europe is seen as a global bellwether on tech policy, but Apple has vowed to fight the charges.

With its ability to make or break the business of app developers, Apple is one of the digital economy’s most important gatekeepers. Any app downloaded to an iPhone or iPad — from Tinder, to Instagram, to Candy Crush — must comply with the company’s rules and guidelines, including using Apple’s payment system and sharing up to 30 percent on any sales. If not, a company risks losing access to millions of Apple customers.

Apple says tight oversight of the App Store ensures customers download high-quality apps, protecting users from viruses, scams and buggy software. But companies including Spotify, the music streaming service that filed a complaint two years ago that sparked the European Union’s investigation, have grown frustrated with its powerful position. They argue it allows Apple to undercut competitors to services like Apple Music and charge an unfair tax on developers.

The European Commission, the executive arm of the 27-nation bloc, agreed with Apple’s opponents. Authorities zeroed in on Apple’s requirement that developers use its payment system, forcing them to give Apple a commission on in-app purchases. The rules have the effect of driving up prices, regulators said, because companies are prevented from giving customers to cheaper payment options.

Margrethe Vestager, the commission’s executive vice president in charge of antitrust enforcement, said Apple was abusing its power to harm Spotify, the Swedish company that is Apple’s main competitor in the music streaming market.

“By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition,” Ms. Vestager said in a statement.

Ms. Vestager said the findings were preliminary. It is unknown how long regulators will take to determine whether to impose a fine or force Apple to changes its business practices. Earlier antitrust cases against Google took years to resolve. In the Apple case, remedies could include letting app developers use alternative payment methods. The two sides could also agree on a settlement.

Ms. Vestager was expected to hold a news conference to discuss the findings later on Friday.

Spotify cheered the decision.

“Ensuring the iOS platform operates fairly is an urgent task with far-reaching implications,” Horacio Gutierrez, Spotify’s head of global affairs and chief legal officer, said in a statement. The commission’s announcement, he said, “is a critical step toward holding Apple accountable for its anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers.”

Apple said its App Store policies do not harm competition, but rather give businesses a platform to reach customers. The company said developers can find payment alternatives, noting that Spotify pays little in commissions to Apple because it makes customers subscribe through a website. Apple said Spotify has become the world’s largest music streaming service in part because of the App Store.

“They want all the benefits of the App Store but don’t think they should have to pay anything for that,” Apple said in a statement. “The commission’s argument on Spotify’s behalf is the opposite of fair competition.”

Criticism of the App Store is part of a broader debate over tech industry power, where a small number of companies like Apple, Facebook, Google and Amazon have government-like authority to set policies over major parts of the digital economy. It determines how people find information and entertainment, communicate and shop.

This week, Apple flexed its power by introducing a software update that gave customers more power to block data tracking by apps, a change that has sparked a rivalry with Facebook, which has criticized the move as anticompetitive because it will harm the ability to sell online advertising.

Companies are increasingly pushing regulators and courts to intervene. At a congressional hearing in Washington last week, companies including Spotify, Tile and Match Group told senators how policies by Apple and Google, whose Play Store is another pinch point for app developers, hurt competition and resulted in higher app prices for customers. And next week, a trial is scheduled to begin in California between Apple and Epic Games, the maker of Fortnite that has filed an antitrust lawsuit against Apple over its fees.

Britain is conducting another antitrust investigation of Apple over the App Store after receiving complaints from developers.

The case announced on Friday is part of a broader effort by the European Union to clamp down on so-called gatekeeper companies like Apple, Amazon, Facebook and Google. Policymakers are drafting laws that would prevent the tech giants from abusing their market power to harm smaller companies, including how they manage app stores.

Efforts to force changes to the App Store pose a threat to a fast-growing piece of Apple’s business. As sales of iPhones, iPads and other hardware devices mature, the company is counting on digital services as a fresh source of growth. Optimism among investors about that business has helped send Apple’s stock soaring, giving it a market value of more than $2.2 trillion, the largest in the world.

The E.U. case against Apple adds to the antitrust cases facing the tech industry on both sides of the Atlantic. In November, the European Commission announced charges against Amazon for violating antitrust laws over its treatment of independent merchants that depend on its e-commerce platform to reach customers. Google is appealing billions of dollars worth of fines issued in three antitrust cases by the European Commission.

In the United States, the Justice Department and dozens of state attorneys general in October brought antitrust charges against Google for illegally protecting it monopoly in search and search advertising. The Federal Trade Commission filed another case in December against Facebook for attempting to squash competition by buying up smaller rivals.

Apple has shown a willingness to fight with regulators. Last year, the company won an appeal to overturn an order to repay nearly $15 billion in unpaid taxes that the European Commission said the company owed.

Adam Satariano is a technology reporter based in London. @satariano