India: the biggest lockdown in the world

The COVID 19 pandemic stopped the world. Most of the globe entered in quarantine to prevent the spread of the new coronavirus, some with great success, others not so much. Now, we witness the consequences of the pandemic  in one of the most populated countries in the world: India. The country is famous for its colossal population growth, low living standards, questionable working conditions and a bad public health system. A terrible recipe to face an epidemic.

The first confirmed case was reported on the 30th of January and  many others in the months that followed. . It was on the 24th of March that the government implemented a countrywide lockdown, with 519 confirmed cases, forcing 1350 million people to stay at home in quarantine. Out of those, 280 million live under the poverty line.

Everyone is highly advised to stay indoors and commuting between and within cities or villages is  either greatly conditioned or prohibited. Some neighbourhoods in big cities are completely blocked by fences. Even movement of goods, some essentials like food, are conditioned.

A great number of Indians lost all sources of income due to the confinement. It wasn’t long when people started disobeying it. Not because they do not fear nor understand the threat of the virus, but because they have no other choice. If the markets do not open, suppliers can’t sell their products and  earn the little income they need to survive, and consumers are unable to obtain essential goods like food and health protection equipment. Also, because of the movement restrictions, the markets that do open have a shortage in supply. Therefore, prices for food and masks have inflated by around 30% according to Público.

Citizens are desperate as they can’t lose their sources of income as, if they do, they’ll most likely starve. Nevertheless, the lockdown and confinement are being enforced by the police, many times resorting to violence. There are reports of police forces beating up big crowds and drivers that are passing where they shouldn’t. They were probably just trying to deliver food to shops or driving to the only market opened for miles.


In the big cities, the situation is much worse. In Mumbai, for example, there are 27000 people per square kilometre. Many live in slums: enormous neighbourhoods with streets no more than 3 meters wide and exposed sewers, where many houses are just composed of one room. Families of 5 members cook, eat and sleep in that one room. How did they get there? Most of them are people from rural areas, brough to the city to work. They accept the job for a low salary and one of those houses in the slums that are generally provided by the company.

During this crisis, the majority either lost their jobs, did not receive the full monthly wages or both. These people now have no income, no home, and no food supplies, being their survival very dependent on food charities. This is the reality for a great number of Indians,  having the unemployment rate reached 23.5% last April, according to the Centre of Monitoring Indian Economy (CMIE).


Unemployment rate in India (Source: CMIE)

Unemployment rate in India (Source: CMIE)

Some try to leave the city on foot  as trains and buses are non-operational. If found, the police will beat them and force them to go back, which they do, just to try again by a different route. When they are able to pass, these families carry their children for hundreds, sometimes thousands of miles to return to their home regions. They walk right next to the highways. 180 people, including a 2 years old girl,  already died on these routes, either by exhaustion or run over by a passing car. When they reach another settlement, the police will probably try to keep them out.

In the middle of all this, the government has tried to help, but with no success. It has provided buses and train rides between cities, but there aren’t enough for so many. It correctly informed the population about the threat of the virus and why it is so important to stay at home, and acted quickly when more positive cases were being confirmed. But instead of sustaining the confinement by supplying the population, they lockdown cities by all means necessary.

Everything they have to show for their hard efforts, both from part of the government and the people, are the statistics. By the time that this article was written, India had a number of confirmed cases and confirmed deaths that put the mortality rate in 0,03%. Relatively speaking, that is not bad. Many call it a miracle or, at the very least, a mystery. It also has a great number of recovered people. It is true that India has a young population and a generally hot climate, both factors contributing positively to ease the severity of the proliferation of the virus. But that does not tell the full story.

Testing in India has not been enough in comparison with the rest of the world. The hospitals seem completely full of COVID-19 cases. Some became so restricted that other patients cannot get treatment for other diseases, like HIV/AIDS. India is also full of other dangerous illnesses. Pulmonary Tuberculosis, a disease eradicated in so many countries, still exists there and has very similar symptoms as the coronavirus like persistent cough, fever, fatigue and breathlessness. Of all deaths in India, only 22% are medically certified, and wrong diagnosis are often. Hence, many deaths are not being registered as COVID-19 caused, when some most likely are. Many deaths happen at home in India. A family member reports it by phone, and then authorities conduct a “verbal autopsy”.

“Counting deaths has always been an inexact science in India.”

— BBC

Under-reporting of COVID-19 cases and deaths is not uncommon amongst infected countries, but India already has a reputation of a terrible account of its diseases and deaths. All of this makes you wonder: how viable are those “miraculous” statistics?


Map of cases per million in India by states (source: Ministry of Health and Family Welfare)

Map of cases per million in India by states (source: Ministry of Health and Family Welfare)

What is more dangerous, the disease or the lockdown preventing it?

Many specialists are studying to get an answer for this question, but for the time being, we just don’t know. Until we have a better understanding and a better system to deal with the pandemic in India, the disease will continue to spread and people will die, let it be by the disease, starvation or another cause related to the lockdown. And as it was shown to us this year, the world can always get worse. A new strain of the coronavirus was found in India, resulting from a mutation, that experts say there is still no reason for alarm, but it can lead to the ineffectiveness of a potential COVID-19 vaccine. Not only that, but the strongest storm ever recorded in the Bay of Bengal, the Cyclone Amphan, is about to hit India and Bangladesh.

The people of India are in need of international help now more than ever. If you think you can help, please consider donating to a charity institution, such as Kolkata Relief.

Site: https://www.kolkatamonsoonrelief.org/
Instagram: @kolkatarelief https://www.instagram.com/kolkatarelief/


Sources: Público, RTP, ABC, South China Morning Post, BBC, CNN, CMIE, MoHFW.

Margarida Gomes - Margarida Gomes João Rodrigues - João Rodrigues

From the conference room to Zoom: the future of remote working

Telecommuting, or remote working, has been frowned upon by employers for many years, who feared unsupervised workers would be much less efficient. However, developments in teleconference and telework technology and, most importantly, the constraints imposed by the coronavirus outbreak, have brought forward a great increase in the remote workers count, and key takeaways from the situation include a boost in employee productivity and reduction in fixed costs for firms, which not only mitigated the fears of employers, but also anticipated a shift in strategic and operational paradigms for firms.

Global crises are historically known to alter societal behaviours, namely on consumption and organizational levels, ultimately altering the path of history. The Black Death, the most fatal pandemic recorded in human history, which is estimated to have killed nearly half of the European population in the 14th century, is credited to have dismantled feudalism, as serfs (peasants) searched for higher wages due to labour shortages.


Rosie the Riveter Inspired women to serve in World War II Rosie the Riveter Inspired women to serve in World War II

Another example is that of World War II when, due to the allocation of a significant share of the male population to war efforts, women were encouraged to enter the workforce, and such effects persisted in the aftermath. COVID-19 is no different, and while changes in consumption habits may only be temporary, this might be the beginning of a new era for employment in general.

From companies’ perspective, it is not only expected, but necessary, an increased focus on reconfiguring the work space to promote safety, as well as on enhancing working-related software, de-risking their supply chains and raising efforts for crisis preparedness. What’s more, a survey conducted by PwC unveiled that 49% of companies plan to make remote work discretionary for positions that allow them to do so, 40% intend to accelerate automation and new ways of working and 26% want to reduce real estate footprint. The latter finding means that this transition in work ethic is likely to hamper office real estate, as firms opt for smaller office spaces or none at all as their workforce transits to their own homes.

Regarding efficiency gains, there is no consensus on how productivity is affected at home. Despite some studies suggesting that teleworking leads to a substantial decrease in productivity, sometimes as much as 45%, there is no clear evidence of such, as there are external factors at play, for instance the conditions of the workplace. In fact, the impact on productivity depends, in part, on the nature of the characteristics of occupations and the nature of tasks, as more creative duties are likely to experience a positive impact, while more dull, repetitive ones are likely to be negatively affected.


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Regardless of the possible impact on productivity, the current crisis changed both employees and employers’ perception over teleworking and its benefits.  A survey conducted during the pandemic showed 82% of employees in offices would like to telework one or more days a week after the Covid-19 crisis (Colliers, 2020), implying the experience has been positive. Furthermore, 74% of companies say they intend to formally implement telework (Gartner, 2020), meaning companies are also satisfied with the new working conditions.

In these times of great uncertainty, it seems as if one thing is certain:

the working experience will not be the same even when normality returns.

According to researcher Christopher Kent, work routines and rhythms will most likely be restructured, shifting from the general workday structures of a 9 to 5 towards a more objective-based workday, managed by deadlines and check-ins. Furthermore, the technological developments that enhanced and allowed companies to continue its operations should not be set aside, but integrated and internalized. Now that the majority of companies have already gone through the painful process of adaptation of these tools, it is important that firms take the most out of them even after the crisis has gone by. Lastly, business leaders and managers must be wary of changes in policy and regulations in the work environment in order to prevent future crises like the one we are currently experiencing, while ensuring viable forms of staff surveillance shall telecommuting persist.


Sources: McKinsey, PwC, BCG, Lavola, Forbes


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State of emergency: What now?

On the 18th of March of this year, Portugal’s President Marcelo Rebelo de Sousa declared the state of emergency, immediately, to the extent of all Portuguese territory, following other European countries that also opted to declare it, such as Spain, France, Italy and Germany (to name a few from the total of 25 countries that already announced it worldwide).

Since November 1975, after a revolutionary attempt from communist forces to implement a far-left dictatorship, the State of Emergency hasn’t been declared in Portugal. 45 years elapsed and due to the COVID-19 pandemic, Portugal was forced to announce the State of Emergency, in order to restrict the spread of the virus.


What measures can Portugal take to face national catastrophes?

There are 4 mechanisms, consecrated in the Portuguese Law, in order to deal with national catastrophes. From the least to the most severe, we have the state of alert, last used in the summer of 2019 during the protests of truck drivers of hazardous content, which only means that national civil protection and national security forces are ready to attain any request from the government. The state of public calamity, announced two weeks ago by the municipality of Ovar, implies a reduction of economic activity, limitations to the number of inhabitants in public places and the establishment of a safety perimeter. Lastly, the two most severe mechanisms, the state of emergency and the state of siege.

After all, what does the state of emergency imply? What’s the constitutional interpretation? What are the boundaries that define it and that distinguishes it from the state of siege?

What is the state of emergency?

The state of emergency allows the government to suspend certain rights, freedoms and guarantees in order to deal with an exceptional situation. In Portugal, the state of emergency is declared by the President, initially requiring permission from Parliament and then approval from the Council of Ministers. According to the Constitution, it cannot last more than 15 days (although it can be renovated) and it cannot suspend certain rights, such as the right to life or the right to defend oneself in court.

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In this particular emergency – an epidemic – there are two particular rights whose suspension could be useful: The right to free movement and the right to private initiative. Suspending the right to free movement allows the government to impose quarantine and curfews, to forbid people from leaving their houses for non-essential trips (or to forbid elderly people from leaving their houses for any reason), and to limit entry and exit in Portugal, by cancelling flights to and from critical countries and controlling the border. Suspending the right to private initiative allows the government, among other things, to forbid non-essential commercial establishments from opening, to force essential ones (such as pharmacies, supermarkets or medical supplies factories) to stay open, and to take control of private companies (for example, to temporarily integrate private hospitals in the public healthcare system). The state of emergency declared in Portugal also suspends the freedom of assembly, allowing the government to forbid large public gatherings such as protests, concerts or religious ceremonies.

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Criticism

Some have opposed the declaration of the state of emergency, fearing that the President is opening a dangerous precedent for the suspension of rights and freedoms. These worries are not unwarranted: historically, there are many incidents in several different countries of the state of emergency being abused. For example, in Germany between the two world wars, the state of emergency was declared quite often, usually by governments who didn’t have a majority in Parliament and used the state of emergency to legislate without democratic control. This culminated when, after a fire destroyed the German Parliament, Adolf Hitler blamed the fire on communist rebels and used it as an excuse to declare the state of emergency, imposing the dictatorial regime that lasted until the end of WWII. This is only one of many historical examples of the state of emergency being the start of a dictatorship. While it is difficult to argue that Portugal is currently facing any risk of that nature, these historical examples are the reason why many people are very cautious about supporting the declaration of the state of emergency.

State of siege

On the opposite end of the spectrum, some have claimed that, in Portugal’s current situation, a state of emergency is not enough, and a state of siege should be declared. The state of siege is one degree of severity above the state of emergency. According to Portuguese Law, the state of emergency can be declared due to any public calamity or threat of public calamity, while the state of siege can only be declared in the event of acts of force (such as military invasions) or rebellions. In a state of emergency, rights and freedoms can only be partially suspended, while in a state of siege they can be completely suspended – for example, the current state of emergency suspends the right to strike only for workers in healthcare and vital sectors of the economy; in a state of siege, all strikes could be forbidden. In a state of emergency, the powers of civil authorities can be reinforced, and the armed forces can be tasked with supporting those authorities; in a state of siege, all police forces are put under the authority of the Chief of the General Staff of the Armed Forces, and all civil administrations must provide the armed forces any information they request.

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Portugal is facing one of the moments of greatest uncertainty in its modern history.

Fighting an unknown enemy poses difficult challenges and raises important questions. Only in the end will the country be capable of scrutinising the choices made and to discuss a future approach towards a similar crisis. Until then, we shall stand as one.


Sources: Observador,Jornal Sol, ECO

Portuguese Law (in Portuguese):

Constituição da República Portuguesa (Portuguese Constitution), namely articles 19 and 138 

Regime do Estado de Sítio e do Estado de Emergência – Lei n.º 44/86, de 30 de setembro 

Decreto do Presidente da República n.º 14-A/2020 



Afonso Botelho - Afonso Botelho Manuel Barbosa - Manuel Barbosa
Nuno Sampayo - Nuno Sampayo

Corona, an Economic Virus

As it is noticeable, we have just entered a downturn cycle in the economy. The uncertainty on the markets, the general panic, sudden decrease in consumption, production and investment are primary presages of economic dark times, and it is up to all of us to prepare for the upcoming storm. The next months won’t be easy and irreversible economic losses have already contributed to an approaching feasible collapse in the global economy.

The coronavirus isn´t only responsible for contaminating our health, this contagious virus has and will certainly play a big role in the future of worldwide economies.

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EU’s real GDP was expected to grow around 1,4% in 2020, after the hit of the pandemic COVID-19 EU´s output may fall to 0% or even reach a negative growth. Even the Chinese economy, which has been continuously growing in the past decades, was anticipated to grow around 2% more than what it will predictably grow after the spread of the virus and the USA’s real GDP may grow less 1% than previously expected. Overall global GDP growth may fall from 2.5% to between 2% and -1.5%, depending if there is a quick recovery on the economy or a global slowdown.


All industries in the global economy are being contaminated by the virus and the duration of the predicted recovery fluctuates, depending on the economic sector.

As expected, tourism will take the longest time to recover.It is foreseen that it will only restart in the 4th quarter of 2020 (in October), imposing a threat for various countries. A good example is Portugal, whose GDP is highly dependent on the industry, having represented 14,6% of the portuguese GDP in 2018. On the other hand, consumer electronics and consumer products are the sectors that are anticipated to have the fastest economic recovery. Their  global downturn reversal is estimated to be in the 2nd quarter of 2020 (April).

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Even though there will certainly be an economic global slowdown in the economy many specialists argue that the economic incidence of covid-19 is merely conjunctural. Since it´s repercussions aren’t enrooted in the economy, a severe recession isn’t bound to happen, “markets will recover”.

If we reflect on it, an appearance of the epidemic coronavirus will pose as a temporary shock in the economy and it is one that is far from being neglected. 

Let us take into consideration the 08 financial crisis, a great recession derived from an inundation of continuous bank runs, lack of credit crunch and condensed investment in toxic assets. Within the recession downtimes there was a high level of leverage in the financial market which turned rather more difficult the monetary response of the central banks. Many even argue that the prolonged and inaccurate response of Central Banks took a big part in the colossal breakdown of the economy.

 In the feasible upcoming coronavirus crisis, governments and central banks are already concerned with how to prepare for it, how to mitigate the alarming consequences this global pandemic seems to be able to induce in the economy, and how to aim for a “surely recovery”.

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It is definitely extremely hard to predict the right measures to fight such an erratic enemy, thankfully many allies have already started to plan ahead.


Central banks are taking out the big guns. The Fed just announced this last Sunday, March 15, 2020 , that it will lower interest rates to 0%, the first time since the financial crisis of 08, and that it will buy at least $700 billion in government and mortgage-related bonds.The drastic low interest rates are expected to remain until the US economy recovers from the coronavirus economic slowdown.

The ECB is also expanding money supply in the economy, buying financial assets with newly created money. However, their fixed interest rates have been on negative territory since 11 of june of 2014, therefore the central bank has no room to lower interest rates.

It becomes clear that European government’s fiscal policy will play a big role in safeguarding the economies. For the approaching months it will definitely be crucial that assertive fiscal policies are created, in order to safeguard employment and ensure direct credit to companies, with the intent that solvency and liquidity issues are avoided.

Acknowledging that the coronavirus outbreak is an exogenous temporary shock in the economy and that global entities are already taking measures to safeguard its repercussions, independently if the recovery process may elongate, there is hope that our economy won’t suffer an irreversible collapse and fall into the next big recession. Nonetheless, we should be aware that an economic downturn is advancing,  it is time for governments to strengthen their weapons and get ready for the shooting.

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Sources:

  • European Commission, McKinsey & Company, Washington post, BBC news, INE, NY Times, Economic Times, European Central Bank- Euro system