First World policies not cost-effective in TT

DR ASHFORD MAHARAJ

MANY IN TT would be a surprised at the assertion that the less developed countries, such as TT, would by default be paying a price relatively greater than the more developed countries under a lockdown, physical distancing, and social gathering policies directed at mitigating the effects of the covid19 pandemic.

In fact, on a percentage basis fewer lives would be saved by adopting the policies as laid out by the Government, which seems to be mimicking the North American model of hosting essentially daily news conferences to report on what transpired the day before.

Not only is the Government here mirroring the news conferences of the developed world, but it is also imitating the latter’s public policies in responding to an insidious contagious enemy. The policies pursued such as stay-at-home lockdown, physical distancing, and limits on social gathering are prescribed antidotes aimed at stifling or flattening the virus’s curve.

The prescribed rules and guidelines are essentially wholescale non-discriminatory adaptation from an alien environment and, at best, inducted here without a modification suitable to the local demographics and laidback business model. The conundrum here is that the authorities are mimicking the developed world’s model for flattening the curve without factoring a demographic differential premium into the equation.

The demographic differential premium is based on the structure of both the existing population and the incidence of the covid19 disease. The reasoning is simple: richer countries tend to have older populations and covid19 impacts the older citizens more than the under-60s age group.

For example, the 65-year-old and above population of TT accounts for 11.12 per cent of the population, according to the CIA’s The World Factbook. According to the same source, the UK’s 65+ age group accounts for 18.65 per cent of the population, while the US is listed as 16.85 per cent for the same age group.

There is a positive correlation between higher age groups and the incidence of mortality among covid19 patients as per data presented on the websites in the UK and US. According to the UK’s Office of National Statistics and the US’s National Health Statistics, the covid19 mortality rate was 75 per cent and 80 per cent respectively for the 65+ year demographics.

The incidence of covid19 mortality of that age group seems very high as well in TT, which is more like over 75 per cent, according to the spokespeople at the Government’s daily briefings.

It stands to reason, therefore, that richer countries will benefit substantially more from covid19 mandated restrictions while poor countries will benefit less. Alternatively, it is relatively more costly for mandating a halt or severe restrictions to industries, as a greater cost would incur given the close to zero production mandated by the authorities to the population that comprises a relatively younger working age group.

The financial sacrifices made by the commercial sector would very well prove to be more costly vis-a-vis the comparable sector in the more developed countries. Again, the solution is simple: modify the “draconian” policies sooner rather than later and selectively release the younger generation to free up their productive abilities.

In the end, there is a cost to mimicry and the ensuing overpricing control of a disease, both of which expose the lacking innovativeness and wholescale adaptation of a solution more suited to a First World country vis-a-vis a less-developed one. The fundamental question would be: What would TT look like in a post-covid19 world?

The longer these misappropriated policies take hold the more difficult would be the task of returning to a level of normalcy, whatever shape and form this would take.

In other words, rising out of the covid19 ashes would be the demand for a new business model in an obviously new normal for TT and indeed the wider world. TT is a small country with a different demographic and there is no need to continue any further with this continental-type First World response.

Thus far, the people seem to be in support of the Government’s effort, but this capital can be acutely squandered if the administration is viewed by the public as literally and figuratively hiding “skeleton” in its closet.

Thus far, the Government is effectively winning in the court of public opinion, but fortunes could swiftly turn when the collective wisdom concludes that the governmental bureaucracy comprises a bunch of mimicking leaders who are importing and implementing a wholescale level of dubious public policies.

Dr Ashford Maharaj is a finance professor and consultant in the financial services industry in New York