May 7, 2021

India’s current Covid crisis could become a global economic crisis if the situation continues to deteriorate. India is suffering from a staggering surge of Covid-19 cases with multiple variants of the virus in circulation across the country. According to the Indian Health Ministry, the country recorded 412,262 cases of Covid-19 in a single day on May 6 – the new single-day record for India. This came just two days after the U.S. government began to restrict travel from India to the United States “in light of extraordinarily high Covid-19 caseloads and multiple variants circulating in India.” The U.S. Embassy in New Delhi urged American citizens to leave the country out of concerns for the availability of medical care. So far, the government of Prime Minister Narendra Modi has not instituted a national lockdown, despite the surge and calls from the opposition to do so. Instead, Modi has continued to support targeted, local restrictions to try to stop the spread of the virus. India’s economy suffered greatly from the severe national lockdown last year with a contraction of about 10%, but the current crisis may create economic dislocations nonetheless – not just for India, but also for the global economy. India makes up a sixth of the world’s population, is the fifth largest economy, and contributes significantly to global economic growth. A decline in Indian growth will impact the global recovery, as noted by the U.S. Chamber of Commerce which expressed concern that a contraction in India could create “a drag for the global economy.” At the same time, India produces 70% of the world’s vaccines, and the halt in vaccine exports to deal with the domestic crisis has impacted the World Health Organization’s Covax program designed to vaccinate 64 low-income countries. Without the vaccine, economic recovery in these countries also remains in doubt.

In the most recent post-Brexit complication, England and France both sent in the navy to deal with a fishing dispute off the coast of Jersey. British Prime Minister Boris Johnson announced the situation resolved May 6 after French fishing vessels departed waters they had occupied this week in protest to new fishing restrictions near Jersey, which is one of three British crown dependencies. The new trade agreement negotiated by the UK and the European Union as part of Brexit puts new limits on French fishing near Jersey and required new licenses, which were issued last week. The British deployed naval vessels in a show of strength against the French fishing boats, to which the French navy responded in kind. It was a dramatic escalation in a short period of time, complete with “act of war” headlines in the British press this week. England and France were hardly on the precipice of war over a fishing dispute in the English Channel, but it is the latest episode in the post-Brexit era. Other dramas playing out include the possibility of Scotland leaving the UK and a return to sectarian violence in Northern Ireland. The timing of the naval confrontation was not lost on observers, however, who noted that Johnson and his Conservative Party had much to gain from the public relations move just as Brits were heading to the polls in local elections across the country – the biggest set of votes since the 2019 general election, the coronavirus crisis, and negotiations for the post-Brexit trade deal with the EU.

Colombia is the latest country in Latin America to erupt in protests as the region faces increased risk of unrest coming out of the pandemic. Protests in Colombia started last week in response to President Ivan Duque’s proposed tax reforms designed to address the budget shortfall resulting from the last year of Covid-related economic declines. The protests were not just about taxes though, as Colombians of all ages took to the streets for marches and “die-ins” to express their discontent for the growing inequality and corruption in the country. In the past year, the Colombian government has taken a number of steps to increase liquidity and help those suffering from job losses due to the pandemic, but still, Colombia’s economy contracted 6.8% in 2020. The region as a whole contracted by about 7% last year. There is little doubt the pandemic has exacerbated existing problems in Latin America, including the large gap between the wealthy and poor in the region. The poor and middle class perceive the political elite to be corrupt, manipulating the system against them, and hampering their social mobility. Joblessness resulting from Covid-19 and the economic dislocations of the past year have thus increased this sense of helplessness and lost opportunity for many Latin Americans, who do not have access to the vaccine and have also lost loved ones to the virus in this past year. But protests in Latin America are not new, and in many ways, the protests in Colombia are similar to protests the region in 2019 in Chile, Bolivia, Nicaragua, and Peru. The country may be different, but grievances are largely the same.