Intellectual Thoughts by Sanjay Panda: May 2009

Tamiflu Vs Flu, who cld be the major threat

The cure may, at times, be worse than the disease. That would now seem to be the case with tamiflu, the drug used more than any other for treating and preventing the dreaded bird flu — caused by the pathogenic H5N1 virus.

Going by the findings of a study by researchers of the Oxford-based Centre for Ecology and Hydrology, the consequences of large-scale consumption of tamiflu can be scarier than even those of a bird flu outbreak. The main fear is that the many tonnes of this drug that are in stock in various countries for combating a possible pandemic would, on consumption, play havoc with wildlife besides increasing human health hazards. Specifically, the scientists have warned that the bulk of this drug would get excreted through urine and flushed down sewers into natural water bodies and rivers, devastating aquatic bio-life. The worst hit would most likely be micro-organisms, including all manner of useful bacteria, present in these waters. This is because oseltamivir carboxylate, the active anti-viral ingredient of tamiflu that also kills bacteria, is resistant to bio-degradation and cannot be eliminated through normal sewer water treatment.

Its toxicity can, therefore, persist in water bodies for weeks, even if only treated water is released in them. As a result, fish, birds and other creatures that dwell in these tanks and rivers or feed on them could face ruin. Man, too, needs certain kinds of bacteria in the gut for the digestion of food. All these systems could go haywire if the need should arise to use tamiflu on a mass scale. As if this scenario were not alarming enough, the scientists have also pointed out that widespread consumption of this drug can create conditions in which the H5N1 virus, which normally infects only birds and some animals and does not get transmitted to humans, can mutate into forms capable of being passed on to humans.

Another likely fall-out could be the development of immunity against oseltamivir carboxylate in H5N1 virus itself, rendering tamiflu ineffective. This would further heighten the risk of a flu pandemic. And, what is worse, should this happen, mankind would find itself fighting a losing battle till an alternative vaccine targeted specifically at the new form of virus is developed, which might take months. Of course, it can be argued that these dreadful implications are hypothetical even though they emanate from a scientific study carried out on rivers in the US and UK. In any case, the possible hazards are far too serious and indeed unnerving to be disregarded.

The bird flu has not yet been eradicated and its incidence continues to be reported from the south-east Asian region. What needs to be remembered is that the flu outbreak of 1918, albeit of a different virus strain, had killed nearly 50 million people. Equally essential to bear in mind is the alarming decline in the population of vultures, which are nature’s scavengers, owing to the indiscriminate use of diclofenac, an anti-inflammatory drug, for the treatment of animals. Its residual toxicity in animal carcasses is killing the vultures who feed on them.

It is, therefore, imperative to revisit the strategies devised to cope with the bird flu menace and to look for safer drugs. An anti-influenza vaccine developed at the Bhopal-based high security laboratory of the Indian Council of Agricultural Research is believed to be a less harmful alternative to tamiflu. If that is indeed the case, enough stocks of this vaccine, as also adequate production capacity, need to be built up. Simultaneously, research needs to be initiated to evolve suitable biological and chemical treatments for sewer water to minimise its residual toxicity before the discharge is put out into natural water bodies.

Savings a/c will earn daily interest

Savings bank account can earn you more interest now. The Reserve Bank of India (RBI) has issued a directive in its policy document that will change the way interest is paid on the minimum amount present in a savings bank account each day.At present, the interest (3.5 per cent per annum) is calculated on the minimum balance held in the account from the 10th of each month to the last day of that month. So, if a bank customer has Rs 1 lakh in his savings account one day and then Rs 100 another day, the minimum balance taken for calculation of interest in the period would be Rs 100.

But, from April 1, 2010, the interest paid on the savings account will be on the daily minimum balance. In other words, even the Rs 1 lakh balance in the savings account will earn the customer interest, even if it’s withdrawn later on. As per the new directive issued by RBI, only commercial banks will need to follow this new method of interest payment on savings accounts. Commercial banks include all banks other than co-operative ones.

This means that the money will start earning higher interest even as it remains liquid and safe.

Financial far sight

The ongoing financial crisis in the mature markets abroad has led to much introspection in the domain of policy-making and academia. Products must be made more transparent, with risk mitigation and prudential measures much better aligned. The quality and effectiveness of financial supervision must improve. It follows that the gaps and weaknesses in the prudential norms do need to be properly addressed, with proactive oversight and follow through. The crisis has much to do with the heavy issuance of credit-linked, mostly mortgage-backed, securities in the US, and subsequent large-scale default on the underlying assets, mainly housing.

The fact is that the push for increased sub-prime mortgages earlier this decade followed by securitisation of the receivables greatly compounded the problem.Of the trillions of dollars worth of asset-backed securities issued globally, roughly 60% had AAA credit-rating, the safest possible, according to Fitch Ratings. This is way, way too high. In sharp contrast, less than 1% of corporate bond issues are triple-A rated.

The structured products are particularly default prone in an economic downturn with substantial, correlated risks. It’s clear that the structured products were glaringly faulty. As we. in India moving for more reforms in the financial sector, which includes creating scope for new products, we need much more for skilled human resources and credible supervision . We do need to draw the right lessons from the crisis abroad and implement. Its the far sight that matters!!!!!!!!