It was with sense of humility that I accepted the honour of proposing these remarks at the beginning of this special webinar conference. I am greatly humbled that I speak to you in my capacity as Chairperson or rather outgoing Chairperson of the Group of Heads of Mission in New Delhi from the Southern African Development Community (SADC). I will soon be passing on the baton to my colleague, the High Commissioner of Mozambique.
Let me sincerely thank the India International Center (IIC) and the Working Group of Alternative Strategies for the excellent preparations of this conference, despite the challenging times that we live in.
This Webinar Conference to mark the 40th Anniversary of SADC is timely and important as a platform to chart out the path to recovery after the COVID-19 pandemic, and in the perspectives of SADC -India cooperation.
It also affords us an opportunity to take stock of the experiences and challenges we face in the context of COVID-19, and strategize the way forward.
COVID-19 pandemic has so far infected millions and killed several hundred thousand globally. The SADC region, like India, has not been spared. The full extent of COVID’s impact on global economy and livelihood of persons is unprecedented and huge but not yet fully known.
The IMF has predicted that the region will not get back to a pre-pandemic level of GDP until 2022/23.
The Fiscal Monitor released by the IMF in April 2020 highlighted that COVID-19 outbreak and its financial and economic consequences will cause a major increase in fiscal deficits and public debt load in 2020. The Chairman of Tata Steel, Mr. Chandrasekaran was quoted recently saying, “This is for the first time since the Great Depression that both advanced and developing economies are in recession together.” The assessment that was conducted by the SADC Secretariat this year on the socio-economic impacts of COVID-19 on SADC economies has shown that regional economic growth is expected to contract by an average of about 3.8 percent in 2020.
There is a consensus that the SADC region as well as the Sub-Saharan Africa were unfortunately ill-prepared to contain the novel virus or to deal with its economic fallout.
First, the capacity of the health-care system to contain the spread of infection, handle emergencies and provide care for the sick was very weak, due, partly, to many years of under-investment in the health-care system.
Second, there was lack of fiscal space to adequately fund either containment interventions in the health sector or safety nets to ameliorate the effects of these interventions, particularly for low-income members of the population.
Third, for a majority of the poor, a combination of low personal precautionary savings and inability to access the credit system in the absence of a formal welfare system meant that they had no means to finance their survival during lockdowns. A sharp decline of remittances from the Diaspora has, so far, aggravated this difficulty.
It has been suggested [by scholars] that there is still significant uncertainty about the recovery path both, globally and in our region, due to the uncertainty of the path of infection after reopening from lockdowns.
In the premises, the immediate response and strategy, given the overstretched state resources, must focus on:
Promotion of regional and international cooperation. This will allow quicker recovery out of the crisis and, perhaps, avoid protracted/prolonged processes for normalization. In this regard, it is important to dialogue among SADC and development partners, such as India, on common challenges and strategies towards achieving a stable economic recovery.
Need to support small and medium-sized enterprises and informal sector is critical in supporting the livelihoods of the majority of our people through job retention and creation.
Need to invest in digital technology. And here I think that COVID-19 has created the rationale for acceleration and broadening of digitalization of entire economies.
Enhanced sharing of strategies amongst SADC and Indian stakeholders on addressing and leveraging the challenges presented by the COVID-19 pandemic.
India and SADC have had strong and deep ties of cooperation in the past and now there is strong need to further strengthen these ties to support and assist each other in the Post COVID-19 scenario.
Although investments have been substantially affected and even decreased in the wake of COVID-19, as the global economic climate recovers, further Foreign Direct Investment is expected to capitalize on other industries and Member States whose productive potential remains untapped.
The post COVID-19 path to recovery calls for out of the box strategies to counter the fallout of the economic downturn and to meet the challenge of emergent priorities.
For instance, in terms of digital economy, India is actively working with Africa, in general, and with SADC, in particular, in transforming the economy on the continent through the “soft infrastructure”, among others. The decision of Bharti Airtel Ltd., (an Indian business conglomerate), to expand its high-speed 4G data network across the continent by investing USD 2.4 billion is a welcome measure. Airtel Africa, the holding company for Bharti Airtel is now operating in 14 countries, offering 4G services to ten of them. (It is heartening to note that the South Africa’s MTN is today the largest telecom operator in Africa and in the SADC region).
By and large, the post COVID-19 recovery calls for collective solidarity through strengthening existing partnerships amongst SADC and India. For instance, India-SADC cooperation in medical industry will undoubtedly boost the long-term availability of medical goods, vaccine and services in the SADC region, and support other economic sectors. That is why last week the Council of Ministers of SADC called for strong and coordinated measures for the region to address the impact of COVID-19 which threatens to reverse the gains made in regional development and integration of the past 40 years.
In closing, I should like to call on India to join other international efforts in supporting global fund to help countries recover better from the pandemic. This include provision of debt relief in form of “debt cancellation” to countries in need, to enable them qualify for more borrowing. As we have seen, fighting COVID-19 by new borrowings will lead into a more serious debt crisis in a very near future.
I Thank You For Your Kind Attention.