Decision Making as Output and Bounded Rationality

  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra

Geopolitical Case against Vaccine Nationalism

 

Europe is facing a second wave of infections resulting from the Chinese virus. While the mortality rates are relatively lower compared to the first wave in March, the sheer infectiousness is very high. The US is yet to recover even from the first wave and the Presidential election campaign seems to have increased the infections. India on the other hand is seeing a decline in both infections as also the death rate. The positivity rate is coming down with some green shoots being visible. There is no room for complacency though. The festival season is on in India. The social distancing norms and the mask norms are routinely violated and given the Indian population becomes difficult to implement beyond a point. The ongoing election campaign in Bihar and other states is also likely to have an impact. Maybe India has to wait till early December before some it can be said with some definitiveness that India has past the peak decisively.

 

Meanwhile, the vaccines against the Chinese virus are in the final stages of development. Quite a number of vaccine candidates are already in phase III trials with many others currently in phase I or phase II and waiting to reach phase III. There is a likelihood that both US and UK are likely to issue emergency authorization to vaccines as early as late November. Russia is already vaccinating its population though question marks remain about its effectiveness. China has several candidates in pipeline, but given the widespread belief that coronavirus is a biological weapon released by China, one is not sure how its vaccine will be received. As the vaccine development reaches towards its climax, questions have begun about distribution of the vaccine. There is an increasing talk that people with low risk in developed world might get the vaccine first at the cost of those poor in the developing world. Many countries in the West including US, UK, EU among others have struck deals with pharmaceutical companies for millions of doses. India too is striking deals with Serum Institute and Bharat Biotech among others for vaccine production and distribution. The countries also have an option for compulsory licensing the vaccines to enable the speedy distribution. It is in this context, that debate has emerged about the prospective vaccine nationalism.

 

World Health Organization (whose credibility is severely eroded and its President’s even more) is making a pitch for rich countries donating vaccines to poor countries. Many other organizations, notably the Gates Foundation too have pitched for the same. The media is buzz with articles about how vaccine nationalism would derail global development and the eradication of the disease. There are some past precedents notably the HIV vaccine which took nearly seven years before it was launched in Africa and the H1N1 vaccine wherein at the lesser level, the richer countries did prioritize their citizens. The assumption behind this prospective  vaccine nationalism is the perception that people in the developed world might be at low risk but given their  income levels might afford vaccine. Yet the poor countries might be more susceptible to disease and thus mortality, but given their income levels, they cannot afford the purchase of vaccines on a larger scale.

 

The assumptions might be partially valid. Rather than the poor countries, it is the developed world that has faced the brunt of the disease. There might be a grain of truth that there is underreporting of both cases and mortality in poorer countries. Countries like Peru, Mexico, Columbia among others have faced severe brunt of the disease. Therefore those countries too need to get vaccines in the immediate run. The vaccines must without doubt be given to the health care workers and others who are at high risk. These include the security forces, armed forces, para-heath care workers, teachers, students, old age people, people with co-morbidities, immunosuppressed before reaching the healthy and the low risk. The vaccine nationalism supposedly rests on the belief that rich countries will corner all the vaccines prioritizing their health over the rest of the world. It is an argument that health of the rest of the world matters and not just of the rich population. Therefore priorities have to be accordingly defined.

 

In a recent interview, Foreign Minister S Jaishankar made a pertinent observation. He was postulating what could have been his father’s thinking had he been alive today. His father late K.Subramanyam, the doyen of strategic thinking in India, would have stressed on India ‘first’ in contrast to let us say Trump’s America First, it would have been India ‘first’. Note the emphasis on small ‘f’ in first. It implies that India must take an opportunity to demonstrate the rest of the world it is interested in the global welfare and not just the welfare of its citizens contrary to some other countries.

 

There is no doubt a moral case against vaccine nationalism. The past precedents have enough pointers for pessimism. Yet in the given context, it would make sense in the moral and socially responsible angle for the richer counties to help poorer countries gain access to vaccine soon. To countries like India, it would be time to manifest their soft power. Throughout this epidemic till date, India has been in the forefront of supplying medicines to the rest of the world. Be it HCQ, N95 masks, personal protection kits, paracetamols and many other medicines, India has been in the forefront of distribution earning it the nickname the pharmacy of the world. While this might be earning quite a bit of diplomatic accolades, the vaccine would be a step higher in the value chain. This would be an occasion when India might be considered as saviour of the world. Apart from compulsory licensing India can resort to parallel imports provision. Under this provision, India can manufacture vaccines at its facilities which the countries in Africa and Latin America might import from instead of importing directly from the Western world. Aside of the soft power and the moral angle, there is a geopolitical angle too. China would be more than keen to distribute its vaccines across the world. Besides, the access to their foreign exchange reserves implies huge war chests of reserves. Given paucity of options, many countries might look to China for vaccine options. This would enhance Chinese power and embolden it. It might well be an incentive to release bio-weapons and after creating a havoc, release vaccines with emphasis on underdeveloped world creating a new form of colonialism. This must be avoided at all costs.

 

Therefore, as we observe above, it is the geopolitical angle and the need to ensure China does not get a foothold in the vaccine politics, that the richer countries like the US, Japan, EU, UK etc. must emphasise on poor countries. It is in their self-interest, the self-interest to consolidate in the market of geo-political influences that they need to exercise subdued vaccine nationalism. To India too, it is an opportunity to grab a pie in the share of the geopolitical market. Therefore, as K Subramanyam would have put it, it is to be India ‘first’.  

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