The third instalment of Asia Thinker Series: Talkback discussed state capacity, trust, and privacy in the post-COVID-19 era. The episode featured Singapore’s Senior Minister Tharman Shanmugaratnam, John Micklethwait of Bloomberg and Ms Rana Foroohar from the Financial Times and was moderated by Associate Professor in Practice James Crabtree from the Lee Kuan Yew School of Public Policy.
To follow up with some of the topics raised during the episode, we caught up with Anubhav Gupta, Assistant Professor at the Lee Kuan Yew School of Public Policy.
Having joined the school in January this year, Professor Gupta is one of the school’s newer faculty. He says “it's been quite a start”. His research focuses on the charitable or nonprofit sector of the economy and the governance issues surrounding them.
He was able to add an interesting perspective to the conversation of governments and their response to COVID-19.
David Austin: What do you think are the metrics with which states will use to judge their own success and what particular areas do you see states perhaps playing a greater role after the pandemic?
Anubhav Gupta: Right now, it seems that most of the government response is focused on, in the area of public health. They're trying to increase their capacity, manpower, and making sure that the number of cases are in check.
And most of the measurement, I think around the world is happening on that narrow basis, how governments are keeping their case load low and preventing deaths. At the end of the day, at least in democratic societies their success or failure will be judged by the voters, because like most policy interventions or most government interventions, there are always winners and losers.
The conversation around government action right now, I think, is too narrowly focused on the potential benefits, which are preventing the spread of the disease and, you know, preventing deaths.
But I think as this crisis drags on, which seems pretty likely, and at some point, you know, people will have to sort of come to terms with the fact that this is not all cost free and there's a fine balance to strike.
Keeping the economy closed, gives you this one benefit that you prevent deaths, but at the same time, very vulnerable communities that depend on daily wages or do not really have much savings, they're bearing a disproportionate amount of the burden.
That's a fine balance to strike. And then we've seen that, you know, across the world - [the] knee-jerk reaction around the world was to lock everything down, close the economy. And then over a period of time, they started opening things up, having realised that the economic cost was not sustainable.
So that's ultimately up to the voters, I think. In the final metric, there'll be more and more factors than just preventing deaths or preventing caseloads that seems to default focus right now.
David Austin: That brings us to this next question. And because you mentioned it briefly that, COVID is disproportionately impacting the economically and socially vulnerable, do you think governments should incorporate wealth redistribution in its response to COVID to counteract the increasing inequality?
Anubhav Gupta: I mean, what they should do, is an interesting question. I think they should, I'm sure other people can disagree with that. But I think, more than that, what will inevitably happen is that they will end up redistributing wealth as a result of this crisis. Governments are borrowing money or drawing on their savings right now.
As we start to recover from this crisis, they will have to replenish those funds or pay back the debt. It eventually boils down to tax policies of big governments. And as we know, most of the tax dollars in all the major economies of the world, come from high income people.
I was looking at some of that data in the US for example, top 5% of the income earners pay 60% of all tax dollars. I don't see that trend going away anytime soon. And as the word spreads about what the actual toll has been on vulnerable and low-income communities around the world, I think there'll be increased democratic pressure on these governments to tax the rich even more and engage in wealth redistribution. Whether that should happen or not happen, I think that's individual preference, but I think that that might happen.
David Austin: What is your basic overview of the way that the public and private sector work together and financing?
Anubhav Gupta: Yeah. Well, so a little bit of background on this. There's a reason why the non-profit sectors tend to have different shares of the economy in different countries.
In the US it's a pretty big share, I think it's about 10% of the economy. If you look at developing countries like China and India, it tends to be getting much smaller share and this has to do with a lot of cross-country differences.
Some are cultural, some are more about how the government is structured. So, it really goes back to this move to hold the government more accountable, or make the government more efficient that started in the US in the seventies and eighties. And the idea is that, you know, governments tend to have a monopoly on any area that they operate in.
So if you could infuse some sort of competition you could get, so to speak, more bang out of your buck, you could make the government more efficient. That's been a trend that's been seen in the US and generally in the Western world where governments have relied on outsourcing their activities through grants and contracts, more and more to the non-profit organisations and then, you know, non-profit organisations compete for government resources and that competition arguably improves efficiency and promotes accountability.
But that trend really hasn't been seen, in recent times in the developing world as much. And that explains part of the disparity in the size of the non-profit sector between countries. Not as much focus on keeping the government in check or keeping government accountable and efficient in developing countries like India and China, as it is in the US. So, as you know, government size expands and more and more people start paying taxes.
I come from India and I know that about 3% of the population in India pays any kind of income tax. So the tax base in terms of people is really low. So, there's really no incentive for people to think about what their tax dollar is doing because 97% of the people don't pay any taxes.
As that tax base expands, I think that there'll be likely more awareness about these government efficiency issues and that should spur some action of movement towards increased procurement from non-profit organisations.
David Austin: Using India as an example, would you like to describe India's response to COVID-19? How do you think their government has done? And is there much of a non-profit response there in India? Or is it still, almost entirely the government response?
Anubhav Gupta: Well, that's a really good question. The main challenge in answering that question is that it's really hard to get real time data as things are evolving right now. Researchers like myself are mostly dependent on news reports to make sense of what's going on, and that's not very helpful.
Looking back at what was in place before this crisis hit, government's capacity to respond to these challenges [was] extremely limited in India. There are financial constraints, most state governments don't maintain any kind of positive surplus that they can draw on.
You know, Singapore is a really good example in terms of financial management in that area.
The government has been really proactive and making sure they have reserves in place that they can draw on in times of emergency. Indian government at the central level and state governments haven't been as good on that metric, and the charitable sector also really lags behind in comparison to spear economies in Asia.
There have been anecdotes about people's willingness to give and food banks and things like that cropping up. But I'm sure that that still leaves a lot of people unattended and it's really about how prepared the government is, and how big the size of your charitable sector is that determines how good the response is to a crisis of this size. And I don't think India has been doing so well in this area.
David Austin: Interesting that you pointed out that you don't have any availability of real time data and that you have to rely on news reports. I guess that's one thing about the developed economies like the United States, the government there is pretty good about putting out actual data sources that could be used by anyone.
Anubhav Gupta: Right. I mean, this is part of the overall picture of what it takes to grow the non-profit sector in an economy and to keep it accountable. In the US this has been an ongoing project for the last 20, 30 years. I remember when I started working in this area about six years ago, there were still a lot of data challenges that the US was working out.
They've made progress on this in recent times. Speaking of data on non-profit organisations, public charities, in other parts of the world, it's, it's just absolutely non-existent. If you want to know basic information, like how much non-profits are spending on their charitable activities as opposed to, you know, accounting and administration and finance, that information is really hard to obtain for countries where this kind of reporting is not as evolved.
David Austin: One, audience member asked, they said in 2003 with SARS and then MERS and then H1N1, [in] 2013 [with] Ebola, all these deadly viruses are spreading and there were not lockdowns imposed. And there was still freedom of travel. Some with symptoms still travelled anyway, without the strict health protocol we see today. And then in 2020 COVID is not as deadly and yet travel was halted, borders closed, lockdowns imposed, and yet cases are still rising.
So, does restricting cross border movements really work? Yes or no, and why or why not?
Anubhav Gupta: That's a good question. One thing to note on that is that this virus is considerably different than SARS or H1N1. Two features about these viruses, one is transmissibility and then deadliness. So yes, H1N1 and SARS both of them were more deadly than the coronavirus now, but their transmissibility was not as high.
And one unintended benefit of those viruses was because they were more deadly, they tended to kill their host in more cases than this coronavirus. So it's not a good thing that the host dies, but one small, good thing that comes from that is that the host is not alive, then it prevents the spread of those viruses.
And then this new coronavirus or the novel coronavirus is sort of in that goldilocks zone, where it's just deadly enough that it's worth taking seriously, but at the same time, it's not deadly enough that it kills the host and therefore prevents transmission.
It's the coming together of the two worst qualities that you've seen in the recent times. So that, has induced a different response than the one we saw with the SARS and H1N1. And in terms of lockdown, right now, I think governments everywhere are just focused on making sure they're doing well on this one metric, which is keeping the caseloads low, preventing deaths.
Those metrics have received tremendous amount of attention around the world on social media or traditional media. And the governments are finding themselves in a tough spot. It's really unpopular to make any decision that makes them look bad on that metric. As we've seen with what's been happening in the US. President Trump's attitude and response has been severely criticised not being able to prevent rising cases and deaths, but you know, I think, in the end history will judge whether that was the right decision or not. Because, you know, like I said, right now, people are just focusing on the benefits and not so much on the cost.
Eventually when all the costs are tallied then measured up against the benefits, then we will see whether governments overreacted or not.
I was watching US Senator Marco Rubio, and he used a nice analogy for this. He's a Senator from Florida and Florida gets hit by a lot of hurricanes and these natural disasters. So he compared COVID to a natural disaster like that. It's a pretty bad hurricane and, fast winds and massive rains. And everyone's just hunkered down, they're hiding in their homes and we have no idea about what's really happening out there. We haven't really stepped out and tried to find out or try to calculate the total amount of damage.
And that's sort of the period we're living in right now. We're all locked up in our houses and then we know there's a lot of damage happening outside in terms of, you know, reduced social trust, in terms of geopolitical changes, in terms of what's happening to vulnerable communities that we don't really see on TV or see on social media.
And once there's a vaccine or once we get out of this crisis, I think that we'll really be able to take account of what really happened out there.
David Austin: What do you think the future of globalisation and multilateralism is at this point? Are we heading towards de-globalisation especially after COVID-19 and the disruption of the international value chain, and do you think countries are headed towards protectionism?
Anubhav Gupta: Yeah, that's a good question. I don't know a lot about the topic, but it seems to me that, major economies around the word will be forced to re-examine their stance on globalisation. And I think it could be a healthy correction in the trend we've seen over the last 20, 30 decades.
I mean, before COVID, the world was so connected that it was really hard to imagine for anyone who had been alive you know, since before 1960s, 70s, 80s, the boundaries and the borders were becoming so thin and almost irrelevant. And that rapid change I think wasn't carefully thought about, and I'm sure it was causing some distress and causing some unintended harm to economies around the world.
And we saw in the case of the US, that sort of devolution of borders and not really respecting the borders was became a big election issue in 2016 [with] the election of Donald Trump. The US started imposing all these tariffs and started creating these new barriers on immigration.
And I'm sure that those kinds of conversations were taking place in other countries around the world as well. And now, because of this COVID a lot of those issues I think, would come to the surface. And the governments around the world will be forced to rethink their stance on globalisation and how they view their borders, who they deal with who they allow in their country.
These kinds of crises tend to crop up these issues that are alive under the surface but are really difficult to talk about. But these crises give voice to those kinds of issues.
David Austin: Okay, well, this is a pretty big question that's on everybody's mind; will developing a good vaccine successfully change the lockdown policy? I'm sure it will. But what's your opinion on vaccines and, the fact that everyone's waiting on them right now?
Anubhav Gupta: Yeah, it's an interesting issue. What surprises me about this is that everyone sort of takes, human progress and medical advances for granted. It's been fascinating talking to people about this and everyone, you know, has some version of the opinion that, "Oh, I hope the vaccine is available before December or January." People have sort of set these arbitrary deadlines in their minds.
I guess some of this has to do with how the media has been portraying the advancement of these clinical trials. But it's still, you know, it's all up in the air. We still have no vaccine for SARS or H1NI. Influenza has no vaccine or no effective vaccine; people get the shot, but it only has [a] certain effect rate of effectiveness.
There's a lot of money behind it. There's a lot of needs for a good vaccine, effective vaccine. But I'm not sure when it will be found and what kind of effectiveness it will have and how it will be delivered to, you know, 7 billion people around the world. These are just the kinds of challenges that I don't think humanity has ever faced before.
These lockdowns and this restrictive movement policies that governments have adopted around the world, they're not going to magically go away as soon as you know, you hear on CNN that there's a new vaccine. It's going to be a long process from the development of the vaccine to completely reopening of borders and movement around the world.
David Austin: Well, let me spin it towards your area of expertise about the non-profits. Referring to Bill Gates, the Bill and Melinda Gates foundation. Are they the largest non-profit in the world, if not, they're one of the largest, right?
Anubhav Gupta: They are one of the largest foundations, yes.
David Austin: They've made this vaccine a priority and they were working with public health and vaccines and treatments already.
What kind of a positive effect have they been able to have?
Anubhav Gupta: I think most of the work done by that foundation has been in developing parts of the world. They've done a lot of work in Africa and India, and Bill Gates has really drawn upon his business acumen to maximise the rate of return quote unquote, on his foundation investments, and they've really attacked some of the most basic things that can improve human condition, like access to clean drinking water and access to basic medical services like malaria pills, which are really low-cost treatments right now but are still not available to millions and millions of people around the world. And they've really tried to focus on those things and by not spending all that much money, they've managed to improve the condition of a lot of people.
In terms of investing in the development of vaccines, I read that they are actively involved in that. But this is not really something that non-profits alone can operate in.
Non-profits need to take a lead in these health measures, for example, like providing access to malaria pills or access to clean drinking water, because there's not much money to be made in these areas for regular for-profit companies or corporations.
But vaccine development right now is something that has no shortage of private capital. Because this makes really good business sense. If you're Pfizer or some big pharma company comes up with the vaccine, you stand to make billions and billions of dollars from that discovery.
There's a reason non-profits are not as involved with manufacturing iPhones, because that's something that for-profits can do and make money off. So, this vaccine development is something that companies can make money off very easily. So, it's not entirely dependent on the non-profit sector.
David Austin: Do you think there's anything that the for-profit sector can learn from the non-profit sector when it comes to perhaps distributing this vaccine, if, and when it's created?
Anubhav Gupta: Yeah, definitely. I think that they can learn a lot. In the end, I think it would boil down to supply chain issues. How to reach to parts of the world where for-profit corporations or big companies don't have any reach. With increased availability of contracting in this space, I think the lines have blurred quite a bit, even if, you know, a big drug company or some other for-profit, wants to access a region that it doesn't really have access to it can contract with other non-profits that have been working in the area.
So I'm sure if a vaccine is discovered and there's a plan to give that to 7 billion people on this earth, I'm fairly certain that, even for-profit companies will have to contract and rely on the expertise of non-profits working in this area because they know their clientele and they know the regions, and they often operate in areas that are, you know, sort of dark spaces for these, for-profit companies because there's not much of a profit to be made.
David Austin: Another topic of conversation was about collective responsibility. The question here was, do the high income or rich pitch in more through greater understanding with the view to build society together? And I suppose the question is, should they pitch in more?
Like you've already said that they kind of have to, in fact that they're the only ones that have the assets and resources to be able to, is that right?
Anubhav Gupta: Right. Yeah. It's inevitable that the world will have to rely on the rich to pitch in more and help with the recovery effort. Because, even though we haven't really taken account of how much damage has happened around the world, whenever we do take account of that, I think we realise that the road to recovery is going to be too costly and prohibitively costly for governments alone.
What remains to be seen is whether, the rich will step up through voluntary contributions to non-profits or foundations, or, you know, if they don't do that, then I'm sure there will be increasing pressure on governments to get them involved through taxation and other means.
David Austin: In regards to civic society and activism, how do you empower and educate young policymakers to put on an activist hat to one, create policies with the people at the heart of the policies and two, how might they inspire a broader sense of moral purpose amongst the populous?
Is there a way to educate and empower young policymakers in that way?
Anubhav Gupta: Better data, better resources play a huge role in this. People often don't get involved in community service and politics and in government because they don't really understand how things operate. They feel that it is an elite club that belongs only to the wealthy or the socially connected people.
I think a lot of it has to do with breaking down that barrier that people have in their minds and making sure that governments are inclusive.
It always helps to advertise or to popularise the achievements, to hold regular meetings and get people's feedback to all kinds of sources these days. Social media and online communication has made things much easier in that regard.
If people see more and more that their voices are being heard and it's easier for them to participate and they don't really have to skip a work day and go to a special meeting, then young people will feel more included and feel more responsible of their own destiny.
David Austin: Thank you professor for joining us. We really appreciate it.
Anubhav Gupta: Thank you very much. Thanks for having me.
Photo by Clay Banks on Unsplash