In 2003, when globalization was the rave and international trade was toasted as the ultimate unifier of nations, I suggested to an economist friend that a symposium on ‘Self Reliance In The Era of Globalisation’ would be useful. I was concerned that excessive faith in market forces would pose a threat to healthcare – an area of clearly demonstrated market failure. My friend laughed and said self reliance was the obsession of a bygone era and the new ethos was to be competitive in a globally interconnected world. Money, goods and services would flow freely across borders and supply chains would stretch seamlessly around the world, he said. Thomas Friedman’s book, The World Is Flat (2005) embodied that faith as the world marched ahead to the music of globalization.
Times have changed. In 2023, India is swearing by the slogan of self reliance (Atma Nirbharta). Rest of the world too is debating the pitfalls of globalization, wary of the economic inequalities and instabilities that globalization has spawned as well as the environmental degradation created by expansionist transnational industries. Covid-19 revealed how fragile global supply chains were for medical equipment and how undependable manufacturers in high income countries (HICs) were for timely supply of vaccines at affordable prices to many low and middle income countries (LMICs).
Consolidated supply chains promise efficiency but can create severe shortages of essential goods when compromised. Even within countries, near monopolies can cause disruption when they fumble, as the baby milk food crisis in US showed last year. When a factory which supplied 43% of the milk food as the sole contracted supplier to a federal program was shut down due to bacterial contamination, chaos ensued. US had to drop trade barriers to imports from France.
When supply chains are trans-national and non-competitive, their breakdown can cause serious disruption in the availability of essential goods in many countries. This can happen because of pandemics, natural calamities, war, politically driven economic sanctions, industrial strikes or unexpected termination of trade agreements (as with Brexit).
The need for dependable globally distributed production and supply processes is being debated in the ongoing international negotiations on the global treaty that WHO is advancing for future pandemic prevention, preparedness and response. Drawing on the Covid-19 experience, LMICs are demanding global investment in creating production facilities for essential vaccines, therapeutics and diagnostics (VPDs) across different regions of the world. These would have to be supported by efficient national and regional distribution networks, to provide a strong pandemic response.
While self reliance is desirable for all countries, it would not be possible for some to produce all needed medical supplies. International cooperation and technical assistance would still be needed. Efficiencies of large-scale production and supply at low cost may require transfer of health related goods from one country to another. Organizations of regional economic cooperation provide one such pathway. International cooperation needs to extend even beyond that, to ensure that no country or region is left vulnerable because of lack of capacity or resources.
Thus far, trade was seen to be the main channel for such international supplies. A variety of trade agreements have connected countries or blocs, while the World Trade Organization lays down the rules by which trade is conducted. However, trade is an engagement in which the supplier and consumer each try to extract the maximum possible advantage from the transaction and the final arrangement reflects the balance of negotiating power. LMICs are often at a disadvantage, especially when dealing with a monopoly supplier or an oligopoly of few suppliers who form an overt or covert cartel. Fair competition, which is advertised as the essential ethos of trade, is often extinguished by monopolistic production and a single supply chain.
The alternative to such an adversarial engagement is to evoke the spirit of solidarity, wherein support flows from one country to another to help rather than harvest a profit. This is essential when humanity faces common threats. Does this happen? Emergency medical relief does flow, on compassionate grounds, when large scale natural calamities occur, such as floods or earth quakes. Rest of the time, it is hard bargaining in terms of trade. Even during the Covid-19 pandemic, multi-national manufacturers of mRNA vaccines demanded high prices, blanket indemnity and pledging of sovereign assets while refusing to share technical knowhow and charging prices which were prohibitive for many countries. The WTO resolution introduced by India and South Africa, for patent waivers on essential vaccines, drugs and diagnostics, was embroiled in intellectual property debates even as millions were dying. India, on its own, did supply vaccines to several other countries, in the spirit of solidarity.
So, what makes it likely that solidarity can supplement self reliance, to meet global pandemic threats? By now, there is sufficient realization that many future threats that the world will face would require a concerted response, as all countries will be vulnerable. Pandemics and climate change are obvious examples. Despite a greater emphasis on self reliance, global economies will continue to be connected, rendering them vulnerable to global shocks that emanate in one part of the world and spread elsewhere. The fallout of a poorly handled microbial pandemic will be an economic contagion.
Future conduct of countries must, therefore, be guided by a blend of enlightened self-interest and ennobling altruism. Both point to self reliance and solidarity as the twin track to humanity’s future survival, stability and sustainable development. Under India’s leadership, the G-20 must erect the signposts for that journey.
This article has been authored by K Srinath Reddy, cardiologist, epidemiologist and Distinguished Professor of Public Health, PHFI.