TAMING THE BLACK SWAN

APART FROM THE MEDICAL QUANDARY IT HAS PLUNGED THE COUNTRY INTO, THE COVID-19 PANDEMIC HAS EMERGED AS THE BIGGEST-EVER SOCIO-ECONOMIC CHALLENGE FOR THE MODI GOVERNMENT. ONCE THE LOCKDOWN IS OVER, THE TASK ON HAND WILL BE TO SAVE THE ECONOMY FROM SLIPPING INTO A LONGTERM RECESSION.

- ASHISH GUPTA WITH AVEEK DATTA,  RAJIV BHUVA AND DEBOJYOTI GHOSH

ONLY, THIS TIME, the social and economic unrest is being wrought by a virus that has shut down the world, giving policymakers and central bankers their biggest struggle to save their own countries, and the world, from slipping into the deepest recession since the Second World War.

The novel Coronavirus, or Covid-19, that originated late last year in Wuhan, the sprawling capital of Central China’s Hubei province, has spread across the globe, becoming a pandemic (as announced by the World Health Organization, or WHO) that threatens to bring the world to its knees. The outbreak, without a cure or even a vaccine, has spared none, neither the poor and underdeveloped nor the rich and advanced nations.

The rarity of its occurrence and the unpredictability of its impact, or even of how it will unravel, is the reason why it fits the definition of a Black Swan event, a concept popularised by mathematician and former Wall Street investor Nassim Nicholas Taleb in his book Black Swan. (It was released in 2007, months before the financial crisis erupted.) Though there are those chary of letting the label stick (including Taleb himself ), the fact is, as Suresh Narayanan, chairman and managing director, Nestlé India, puts it: “What we are witnessing is a public health emergency far graver than anything that, as a society, we have ever been through.’’ According to Bengaluru-based serial entrepreneur K. Ganesh, who is a partner at GrowthStory (which has promoted brands such as big basket, Portea, and HungerBox), “it is a global pandemic of an unprecedented scale. It is the toughest challenge for the global economy”.