The self-reliance myth

Speaking to a group of panchayat leaders on Panchayati Raj Day, Prime Minister Narendra Modi told them that the big lesson of the pandemic was that India needs to “be self-sufficient and not depend on others for anything we need in our daily lives”. On one level, that may be true, and we are all learning some lessons during this lockdown about how we are unprepared for long periods of isolation. Yet, on a more general level, this is a dangerous lesson to take away — albeit one that other people besides the PM seem to have taken to heart.

You can see why calls for greater self-reliance appear to be resonating at this point. It is not just that we all, in our personal lives, have rediscovered to our dismay that dependence on too many other people leaves us exposed during crises. The fact is that the pandemic, although a global problem, has stressed the fabric of globalisation excessively. Many have already asked if this is the last straw — if the long march towards globalisation, hammered over the past decade by the fallout of the financial crisis and the rise of populist nationalism will now finally come to an end with the pandemic. Perhaps nothing else but this could have done it: A virus that originated in the country that has benefited most from the past decades of globalisation, thereby revealing the degree to which we have all become dependent on it.

There are three stages at which the pandemic threatened global activity in the long term. The most obvious is through the lockdowns and travel bans that many countries have felt the need to impose, cutting themselves off from the global system. But this could be seen as temporary, and not a real danger to the long-term dynamic. The other two are more worrisome, in that they reveal the degree to which global dependencies themselves can be seen as a problem that needs to be reversed.

The first was the six-week period beginning in mid- to late-January when the People’s Republic of China (PRC) went into its lockdown. Many countries were shocked at the degree to which their own economies were directly or indirectly dependent on Chinese factories operating at full capacity. The fact is that China reopened quickly enough that inventories took most of the strain — probably not a coincidence, given the haste associated with the Chinese reopening. But the lesson had gone home: Supply chains need to be diversified because in general, dependence is a bad idea.

The second stage came afterwards: The unseemly struggle for crucial pandemic-fighting material. This revealed, first, that in crucial and strategic sectors at this time, most countries were dependent on others. We in India, proud of our supposedly world-beating pharmaceutical sector, were shocked at the degree to which active pharmaceutical ingredients were being imported from the PRC. In other places, people fought over face masks being manufactured elsewhere, ventilators, or even the ownership of companies that might provide treatments or vaccines. This appeared to reveal that global cooperation was as fragile as global supply chains, able to crumble under the slightest pressure. Surely the only answer to this would be to return to a less globalised world, one where such crucial sectors are kept at home so that no sudden trade restrictions or export bans can prevent you from accessing them at times of need? Are we not being shown the importance of self-reliance?

This is not just mistaken, but extraordinarily short-sighted. Think back to the wonderful days of, let’s say, last December, that golden age when you could still go for a walk or take a train. If at that point someone asked you whether you thought face masks were a crucial sector that impacted national security, and therefore there should be a sufficient domestic manufacturing base in that, you would have asked if they had run mad. Now, of course, we seem vaguely appalled that not everyone has enough factories making N95 masks. Yet the lesson really is that we cannot predict with any degree of certainty which sector will suddenly become important at the time of such a global constraint. Further, we definitely cannot predict at all which sector might become particularly important in any one country at a specific time. Suppose the original source of the epidemic was India, and we lived in a world without globalisation; can we imagine being able to get enough masks from the outside world to the breakout zones in time?

Yes, there are major problems revealed in how we have globalised. The financial crisis itself revealed that there is a correlation between “efficiency” and “fragility”: greater efficiency means we seek to reduce slack in various systems, which in turn can make it more fragile. So, yes, we need to increase slack in some crucial parts of the economy in order to provide a cushion against crises. But there is another way to combat fragility: To increase the strength of the networks of globalisation, rather than reducing them. When a crisis breaks out, the capital or the masks or the medicines or the ideas that are needed to address it must flow more swiftly, not less. That’s the real lesson of the pandemic, not “self-reliance”.