The 21st century is the culmination of the globalized economies of the different countries from the world. The pandemic Covid-19 throughs out solemn challenges for the respective countries economy that’s where it makes a dent in the global economy
“It’s a recession when your neighbour loses his job; it’s a depression when you lose your own.”- Harry S. Truman.
The 21st century and the fastest-changing economies of the respective countries are making the demand and supply, constant phenomena in the globalized economy. Covid-19 makes all the fears and caveats come true amidst its global breakout. A major respiratory disease taking lives that the world governments has ever imagined. Covid-19 cases worldwide have escalated to an astounding number, with 10,613,035 cases and 514,615 deaths till now as reported by the WHO. The pandemic is taking all its course creating menace everywhere right from socio-economic to political standstill in the global village of the 21st century.
Amidst all this chaos the catastrophic destruction will be seen in the global economy. The 21st century is the culmination of globalized economies of the different countries from the world. The pandemic Covid-19 throws out solemn challenges for the respective economies that’s where it makes a dent in the global economy. Different economies are signing up for the national borders to be locked, ordering the citizens to go for a national lockdown as precautionary measures to avoid the spread of the pandemic Covid-19. This results in shutting down the domestic market, economic activities, disrupting the supply chain for the domestic market to run, is not a good news in the larger sense in the global economy. Covid-19 has brought the global market and the global supply chain to a long term halt, due to the respective nation’s public health crisis in their different nations making them concentrate on one goal that is to get rid of the pandemic Covid-19.
The global economy and all the global economic institutions are on vigil as the world observes the pandemic Covid-19 breaking all the status quo in the global markets. There are various questions that need an obligatory address to understand how the going viral Covid-19 affects the global economy? To carry forward with the theme, what actually makes the global economy function? How is the global economy regulated? What are the affecting commodities of the global economy? How does the globalized market shape the global demand and supply? According to the recent reports of the International Monetary Fund (IMF), the global economy may suffer a recession. A recession is when the world economy shows two consecutive contractions of quarters. Covid-19 is breaking the global supply chain in the markets, which is halting production of commodities in the first place. For instance, China is the world’s largest producer, consumer and exporter of consumer electronics, China manufactures the world’s best products likeApple phones. Resulting in the breakout of Covid-19 the demand and supply chain is halted in the global market, as the consumers are now looking to protect their health and not lifestyles. The IMF has also predicted that the global GDP will decrease in appalling figures, according to the IMF the global GDP in 2019 was 2.9% and at the end of 2020, it will be 1.6%. This will result due to the breaking of the globalized economy as the nations of the world are under lockdown and there are no economic activities seen across the borders.
According to the United Nations Conference on Trade and Development (UNCTAD), it will likely cost the global economy between $2 trillion in 2020. The Rabo bank, a multi financial company globally, stated that the global recession is certain due to the Covid-19. The recession will bring global economic growth to clock below 2.5% in 2020. The world will witness a halt of business activities in their respective markets leading to a big number of job cuts in the respective countries. The International Labour Organization estimates that Covid-19 will destroy up to 25 million jobs worldwide. 3 million Americans have already lost their jobs in the 3rd week of March 2020. In India, UNCTAD said the loss of trade impact on the country could be about $348 million. China’s economy is already down with 10%, amidst their largest industries shut due to Covid-19 breakout. Business and industries worldwide are facing the challenge of disrupted supply of commodities to make products because they need large numbers of workers as they are all quarantined, due to the nation’s lockdown measures.
What should be done in these crucial hours? It’s time for a complete call for a global cooperation to tackle the economic slowdown globally. The global economy largely depends on global supply chains. If the respective governments do their own things, not keeping the regards of other, it shall invite chaos and deepening crisis in international relations. We need global cooperation, global solidarity to walk together and bring things to normal. We need an effective global plan of action and we need it promptly. Global economic stability is the future of the 21st century.
Md Farrukh Ilyas tweets at @amufarrukh. Views expressed are personal.