Coronavirus Or Economic War – OpEd
In December 2019, a new pandemic broke out in the Chinese city of Wuhan, and with the rapid spread of the disease around the world, it was declared a global emergency for the general public by the World Health Organization (WHO). It has been named COVID-19 which is a disease caused by a newly discovered Coronavirus. According to the information so far, it is rapidly transmitted from human to human. As a result of the pandemic, all outdoor activities have been suspended worldwide.
The economic and political instability caused by Coronavirus has become a threat to world peace. Everyone in the world is at risk of this pandemic disease. The Coronavirus would bring economic losses and will lead to a worldwide recession that is unprecedented in the recent past. The Coronavirus could potentially destabilize the world and increase conflict.
This has been recorded as the most devastating crisis since World War II, especially to the economy. There are varying opinions around the world debating on the outbreak of the crisis caused by the Coronavirus. A significant portion of opinion leaders believes that the world after the Corona will be much different regarding its social, economic, and organizational aspects. The world is experiencing a situation that has never been seen before. Production and economic machinery have come to a standstill, work has stalled, and as a result of the wave of globalization that has led to flow in traffic, the Coronavirus has been crippled. The world’s busiest airports and airlines are standing.
The world’s major economies are also under pressure and nearly half of the world population is subject to lockdowns, curfews, and business shutdowns. All of this inactivity undoubtedly carries with it significant economic losses. Many people have lost their jobs, income, and small businesses. Donors Aid and funding has suspended due to this stagnant situation. The world’s many organizations, government entities, universities, institutes, and schools around the world have already put their work and activities online, and lately even in Afghanistan.
Additionally, the world is practicing eHealth and telemedicine activities to respond quickly to Coronavirus, and that has led to a sharp increase and noticeable usage of the technology in developed countries. At this stage, it is not clear who will be successful in this new online experiment and effort to control and prevent the Coronavirus.
The World Health Organization (WHO) has outlined some measures and instructions to protect against the Coronavirus, such as; cut down on social gatherings, social distancing, using gloves, washing hands frequently and thoroughly for up to 20 seconds at least 5 times a day, using hand sanitizer, cough and sneeze using a masks. All these will help to protect the health of respiratory system against COVID-19.
In order to realistically practice these measures, it requires movement restriction and lockdowns. In today’s globalized world, countries are dependent on each other commercially and economically. The imposed movement restrictions have interrupted the global trade and cross border transshipment of goods & services, dramatically affecting the market balance particularly in underdeveloped countries.
Now the couple of questions arise – are these stated measures and instructions protecting people from this Coronavirus in a wide range? Is there any vaccine/medicine made for this horrible disease?
In this new era of advanced medical science and technology with access to wide range of medical research, why the scientists are finding it difficult to create vaccine or medicine to treat the COVID-19 on easy way. Doubt that there might have already been made and will introduce it to the world market shortly for doing huge business.
Stock Exchanges
According to the recent information, the US and UK stock markets crashed by negative 26% each, and the Indian stock market by negative 17%. European countries have suffered huge losses, as well as others underdeveloped countries and the trend continues. On the other hand, in China, which the epicenter of the virus, the stock market has risen by 0.3%. China has recovered from the disease and very few cases have been recorded recently. The world is now facing the effects of the pandemic and panicking for the economic losses, struggling to find the way for recovery.
Climate Change
Alternatively, the Coronavirus lockdowns have had a positive impact on global climate. Environmental experts and climatologists have indicated that due to Coronavirus induced lockdown, the environmental pollution has been reduced almost by 25 to 35 percent. Industries are closed and there has been a reduction in land, air and sea traffic. Once this pandemic is over, global economies would boost to increase production to recover from these losses. The industries will focus on short term benefits, which will create huge amount of environmental pollution and greenhouse gases. Therefore the negative impact on the climate is imminent.
Materials Prices
Unfortunately, 212 countries and territories have been affected including two international conveyances (Worldometer). The IMF fears that 170 countries, rich and poor, will experience a decline in GDP per capita this year. This means that the average standard of living will decline. This epidemic is affecting developing and underdeveloped countries in many ways. Like many countries export goods used by industries. Demand for this specialty has grown significantly as a result of recent corporate scandals, and prices have plummeted. The greatest example of this is Oil, which demand for this specialty has dropped significantly as the Coronavirus lockdown has reduced the demand for fuel for transportation.
International investment
The developing countries also face the problem of money being withdrawn by foreign investors. The IMF’s chief economist says “the risk-taking spirit among international investments have waned. This means that they are selling an investment that is relatively risky for them”. Another sign is the high cost of insurance, with a sharp decline in the value of the currencies of many countries. It is also an indication that investors are trying to extract their wealth.
Foreign Loans
Another problem is the foreign debt. A devaluation of a country’s currency makes it more expensive for it to repay loans or pay interest on them in other currencies. At a time when governments in developing countries are under pressure to deal with the medical crisis and its economic effects, debt repayment can be a serious burden on countries already suffering economically. Therefore, a faster campaign is underway to solve the debt problems of developing countries.
Informal Work
Dealing with medical problems in densely populated areas of developing countries can also pose a number of specific problems. Social distance can be especially difficult in these places. The choice is to either practice social distancing at a risk of starvation, or work with a risk of getting the virus from contaminated areas.
Remittances
Developing countries are also likely to face a shortage of money to send migrants home. Remittances are often an important support for a family’s standard of living in developing countries. A World Bank new report warns that the pandemic could reduce them by 20 percent. Immigrants, in particular, are at risk of losing their jobs and income.
Conclusion
Subsequently, the current war against the Coronavirus is different from all wars that have been faced by the world in the past. If all the regions do not show unity and harmony in response to the current situation, it’s going to be a long and hard battle that will take years. It is ironical that, the origin of this virus, China, has won against the virus while other major countries are still suffering in all aspects. Many believe the world order will change.
However, the conclusion also illustrates that we still need to see how the major economies strategize themselves during the recovery phase. On this basis, societies with strong social resistance will be able to emerge from this era with fewer losses. The governments with standardized implementation and strategy will be affected to a minimum by this epidemic. Weak nations will become more emaciated and will probably face more serious situations. Once the epidemic is over, we are all likely to face a wreck. We will all see how this debris will pave the way for the establishment of new world order.
*Ziaullah Karokhel, MBA, Kabul Afghanistan
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