|Last week, India’s notoriously raucous media came together in a rarely seen moment of near complete solidarity. It was beautiful. Using articles, press releases, and unsigned editorials, India’s newspaper, television and radio companies and their respective associations (INS, IBF, NBA, AROI) criticized what they saw as an unprecedented attack on “one of the crucial pillars of democracy”, a “vibrant and free press.” Here were some of the words they used: “Deeply disturbing” “Deeply saddened” “Demotivating” “Highly demoralizing” “Strongly deplores” “Disbelief” “Condemnation” “We will resist any such move by the government,” said a statement by the IBF, an association of TV broadcasters. INS, the Indian Newspaper Society, said the move was “tantamount to financial censorship”. And what brought together nearly every media organization in India, regardless of political leaning or medium? The loss of government ads. Last Monday India’s Prime Minister Narendra Modi reached out to several opposition leaders to solicit suggestions for dealing with Covid-19 as a country of 1.3 billion people brought its economy to a virtual halt for 3 weeks (which is now getting extended to 5 weeks). So, Sonia Gandhi, the leader of the Congress Party, sent in 5 suggestions. This was number 1|
|First, impose a complete ban on media advertisements – television, print and online – by the Government and Public Sector Undertakings (PSU) for a period of two years. The only exceptions should be advisories for Covid-19 or for issues relating to public health. Given that the Central Government currently spends an average of Rs1250 crores per year on media advertisements (not including an equal or greater amount spent by PSUs and Government companies), this will free up a substantial amount to alleviate the economic and social impacts of Covid-19. Ban media ads by govt, suspend Central Vista project, Sonia Gandhi suggests PM Modi, The Telegraph|
|It’s okay if you want to scroll back up and read the adjectives and condemnations once again. We’ll wait. On 2 April, Vindu Goel and Jeffrey Gettleman reported on the state of India’s free press in The New York Times.|
|The business model in India doesn’t help. Well before Mr. Modi first became prime minister in 2014, newspapers and television stations have relied on government advertising, allowing politicians to reward friendly outlets and punish critics.|
And media owners often run other businesses for which they need the government’s favor, making them reluctant to take on those in power. With the coronavirus pandemic dampening advertising and restricting newspaper circulation, news organizations are now sliding into crisis. One of the most independent, The Indian Express, just decided to cut salaries. Under Modi, India’s Press Is Not So Free Anymore, The New York Times
|The unity and resilience of India’s free press was based on the fragility of its business model. And while Indian taxpayers may not be formally funding its media organizations (like how Britain funds the BBC), it’s quite clear they’re funding them informally. Via government ads. This is bad at two levels. Firstly, the Indian taxpayer gets neither credit nor transparency in return for funding hundreds of news organizations, some of which are fabulously profitable and scrupulously opaque. Secondly and more importantly, having the government decide who the taxpayer’s ad money goes to leads to its own set of problems. Here’s Sagar at Caravan Magazine.|
|Around six hours before Prime Minister Narendra Modi announced a three-week nationwide lockdown, on 24 March, he personally asked over twenty owners and editors from the mainstream print media to publish positive stories about the COVID-19 pandemic. The owners and editors represented media organisations working in 11 different languages, including the senior-most members of national media houses such as the Indian Express Group, the Hindu Group and the Punjab Kesari Group. According to a report on Modi’s official website, the prime minister asked the participants to “act as a link between government and people and provide continuous feedback” on the government’s handling of the COVID-19 crisis. The website further noted that in the interaction, which was conducted via videoconferencing and lasted an hour and a half, the prime minister emphasised that “it was important to tackle the spread of pessimism, negativity and rumor. Citizens need to be assured the government is committed to countering the impact of COVID-19.” […] It was not Modi’s only such interaction with journalists either. The previous day, Modi had held a similar meeting with senior television journalists. Following the lockdown, on 27 March, Modi also interacted with radio jockeys to issue the same advice he had tendered to the print media. Speaking Positivity to Power, The Caravan|
|Let me end with this photo of India’s Information and Broadcasting Minister, Prakash Javadekar, reading a copy of the nation’s leading business newspaper in front of a poster of its Prime Minister. The photo was carried in The Economic Times, of course.|
|India’s Governments Are Cutting Back First, the central government cut the salaries of all Members of Parliament by 30% for a year. Then states started cutting the salaries of their elected representatives and ministers by 30% for a year. Karnataka’s Chief Minister sounded no different from a restaurant or small business owner.|
|“If there’s no revenue, from where will you give (salary)? We aren’t getting any revenues at all. Excise, motor vehicles taxes, commercial taxes. There are no collections. Everything has stopped.” State to cut 30% salaries of legislators, Ministers for one year, The Hindu|
|But most worryingly, then came the news that when India’s citizens expect its government to ramp up spending, the government had instructed all departments to reduce their expenditure by 60%.|
|Days after cutting the salaries and other allowances of MPs and ministers, the government has passed instructions to all departments to reduce their expenditure by as much as 60 per cent from their first-quarter spending plans. Each department has to make the “savage cuts” by redoing the Budget maths. The only exception is spending that deals with schemes related to the pandemic. Here too, there could be cuts for non-essential stuff. No instructions have been issued to states to prune expenditure but it is understood that these too could happen soon. All govt departments told to cut expenses by 60% amid coronavirus outbreak, Business Standard|
|That was Rohin and now over to Arundhati.|
|Testing the power of incentives It is the government’s duty to test and identify people with coronavirus. And the government does this the ways it knows best. In the case of India, it is by mandating private labs to test the population for free. But duty is different from incentive. Charlie Munger, vice chairman of Berkshire Hathaway and Warren Buffett’s longtime business partner, is a strong proponent of incentives. In a speech on The Psychology of Human Misjudgment, he says:|
|“First. Under recognition of the power of what psychologists call reinforcement and economists call incentives. Well, you can say, “Everybody knows that.” Well, I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes, but I get some surprise that pushes my limit a little farther.”|
|He then gives the example of the courier service Federal Express:|
|“The heart and soul of the integrity of the system is that all the packages have to be shifted rapidly in one central location each night. And the system has no integrity if the whole shift can’t be done fast. And Federal Express had one hell of a time getting the thing to work. And they tried moral suasion, they tried everything in the world, and finally, somebody got the happy thought that they were paying the night shift by the hour and that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked.” Charlie Munger, Vice Chairman of Berkshire Hathaway|
|Coming back to our problem at hand, of testing, As the economy continues to smart under lockdown, companies need to get back on their feet as soon as possible with a healthy workforce. So employers have the best incentive out there to test their workforce for the virus.|
Now, guess who wants to now get in the business of testing. Amazon, that’s who. It should come as no surprises really. When the company was scaling rapidly and needed tech infrastructure in the form of cloud services, it built Amazon Web Services to support its scale – a unit that earned $35 billion in 2019. Now Amazon has another need. A healthy workforce.
So it is building a lab to provide incremental testing capacity where it hopes to test its front line employees. Amazon wrote in its blog
|Regular testing on a global scale across all industries would both help keep people safe and help get the economy back up and running. But, for this to work, we as a society would need vastly more testing capacity than is currently available. Unfortunately, today we live in a world of scarcity where COVID-19 testing is heavily rationed. Scalable Testing for Coronavirus, Amazon blog|
|Democratising testing, and taking it beyond government- and private-run labs and getting employers involved could help get the economy back on its feet again. At the same time, this could solve the problem of mass testing. Every problem only needs the right incentive to create solutions. |
And here’s Nadine to take us from democratisation to authoritarianism, in Indonesia.
|Don’t go home We’ve seen the emergence of a new social media trend in Indonesia: communities across the archipelago are urging their relatives in the cities not to return for the Eid holidays. “If you love your family, don’t come home!” many of the posts exclaim.|
|Indonesia decided against citywide lockdowns in order to not completely cut people off from income opportunities.|
There are restrictions on travel: for example, there’s a limit to the number of people who can commute on a single bus. But travel isn’t forbidden, borders between provinces remain open, domestic flights and ferries continue to operate.
Of all islands in the archipelago, Java, the most populous one, has the highest number of confirmed Covid-19 cases. One obvious step authorities could have taken is to cut off travel between Java and the remaining islands. Virus carriers who travel to the remoter islands potentially bring the disease to areas where there are even fewer resources to deal with it.
But closing Java’s ports and airports wasn’t even properly considered.
A little systems thinking helps answer why.
In the system of the Indonesian nation-state, Java is the centre of power and business. Its influence spans the archipelago, but only to a degree. The influence gets its power from the flow of goods, people, money, and ideas from the centre to the periphery.
Viewing the archipelago as one unified, coherent system is foundational to the Indonesian nation-state. One of its greatest fears is a “Balkanisation”, where self-organisation of different territories ultimately drives them to break away from the dominant system.
With its insistence of keeping Java’s borders open, however, the central government may actually invite further friction down the line. If the virus spirals out of control in other parts of Indonesia, those territories might lay the blame at Java’s doorstep. But any uprising could be used by the central government to double down on its power.
Ben Bland, who leads the Southeast Asia programme of the Lowy Institute think tank, sees “authoritarianism intensify in Southeast Asia” post Covid-19. Indonesia isn’t a prime candidate for a resurgence of authoritarianism, its democracy has been comparatively healthy over the past two decades, but the coronavirus pandemic can upset the balance by introducing friction in the relationship between the centre and the periphery.