The Impact of Covid-19 on the Global Economy

Technology can be a boon and a curse, this is a saying we had always known. Some of us may even have experienced the harmful effects of technology. However, it took the Covid-19 to remind us how far these harmful effects can be.

Our world is connected by shipping lines, airlines and more. It takes hours for one to go from one corner of the world to the other. This is clearly a boon as it boosts trade, cultural exchange, global economy and of course, globalization. However, as the Covid-19 has shown us, all these benefits can turn into a curse. Today, most of the world is on lockdown mode as we battle to contain the virus. The economy is evidently on a downward spiral, while the loss of human life is only rising each day.

The cost to the economy is staggering. The stronger globalization is, the stronger the spread of viruses like this is as well. The disease at hand has spread because of urbanization, international trade and mass migration. This has disrupted the global economy, basic social functions, and the production and supply of necessary items.

In this article, we are going to talk about how the coronavirus that has laid a siege on the world. We shall also talk about how you can take care of your loved ones in these trying circumstances.

The Coronavirus

The very first thing we need to know is that Coronavirus, as is being touted by the meda, is not the one and only strain. That means that there are many types of Coronaviruses, some of which have been dangerous enough to cause SARS (Severe Acute Respiratory Syndrome), the Spanish Flu of 1918 and more. Illnesses caused by these viruses have a few things in common: they lead to symptoms like kidney failure, breathing difficulties, pneumonia and even death. 

For Covid-19, which we are facing today, there is no vaccine yet. It can take years to make one. In the meantime, doctors can only treat the symptoms, not the whole disease.

The CoronaVirus will go down in history as one that broke between 2019-2020. WHO declared it as a pandemic on March 11, 2020. By this time, there were more than 7711 confirmed cases and more than 12,167 suspected cases in China. 

Now, there is something alarming about Covid-19.

It’s mortality rate is 3%.

Sounds small?

Compare it with the Spanish Flu of the previous century where the rate was 0.1%. On the upside, it is less deadly than the SARS. The death rate with SARS was 10%. However, Covid also spreads far more quickly than the SARS. There can be several reasons for this fast dissemination,one of which is a longer incubation period 14 days. The second reason is that people affected do not show symptoms for days, leading to more people being affected. It has also become evident that the elderly are those more susceptible to the malignant nature of the virus.

As for the impact on the global economy, let’s start with China, where it broke out first. In China, its effect was immediate. The global giant Apple closed its last store in the country on February 1, 2020.

HKHS Index (Hong Kong Hang Seng) has dropped 9% since January 2020. The price of Brent oil fell to as less as $20 a barrel on March 9, 2020. This is an alarming 71% drop from its price in January, $70.25.

China’s industry is already devastated, The country’s exports fell by 17.2%. Its auto sales was the most hit, and is down by 80%. China’s GDP will fall by 1-2%. The retail industry is hit as well, since the outbreak happened on the eve of the New Year. It will be interesting to know that Hubei, where it all began, accounts for more than 4% of China’s GDP.

And that’s just China. As the disease continues to spread around the world, there has been a marked impact on global demand and supply. Entertainment and travel industries and the most hit, since people are staying at home now. The airline industry around the world stands to lose more than $113 million dollars. The entertainment industry will lose $5 billion dollars.

There is panic amongst investors as well, who are now unsure as to where matters will head. This has affected stock exchanges like Dow Jones, whose Industrial Average closed at 20% less than what it was in February, at 23,553.22 points.

Now, with the impact of Covid-19 on the Global economy to provide perspective, let us look at some of the diseases which ran rampant in the world in recent memory.

SARS

SARS stands for Severe Acute Respiratory Syndrome. It was also a coronavirus that had symptoms like fever, breathing problems, dry cough, and pneumonia. However, its run lasted only for 6 months - from February 2003 to July 2003, which was a relief, given its high mortality rate. During this time, sales downspiralled, while the disease affected travel and entire areas. The economic loss was stated to be between 40 billion to 80 billion USD!

The Spanish flu of 1918

The Spanish Flu outbreak came before penicillin and sulfa drugs were invented, which is why its effect was so widespread and lethal. Spain got the brunt of the disease and lost more than 8 million people in the country.

It was a pandemic as well. It turned out to be far more deadly - with 50 million dead of the 500 million were infected, around the world. 

Wages actually rose during this period as there were less workers available.

Another far-reaching effect of the Spanish Flu was that Spanish mothers who were affected while pregnant gave birth to children mentally deficient to a degree. These children were found to be 15% less likely to gain a high school degree and the wages of the men were as much as 9% as a direct result of that.

The Ebola Pandemic of 2014

The Ebola pandemic was limited to Africa only. However, it caused significant death and devastation to the economy of African countries. It caused the death of 11,316, while having infected 28,639. 10,600 more died untreated as doctors struggled to control the situation. Liberia, Guinea and Sierra Leone together lost $3.6 billion of their GDP in the effort to fight Ebola.

Pandemics and how they affect you

Pandemics and epidemic disease are caused by mutations of existing viruses, or by transmission of an existing animal-infecting virus over to humans. These have a life cycle of a few months, unless it evolves or mutates further.

Did you know that there are pandemics every 10 to 50 years? These are caused by new types of viruses we are not immune to yet, and many of them are transferred from animals.

Climate change only increases the problem of viruses, and now perhaps Covid-19 is an indication of the same. As the permafrost melts due to global warming and releases viruses and bacteria which were dormant for 1000 years or more, we are exposed to them more frequently, creating quite a torrent of diseases. Contaminated water from sewage flooding only increases such a risk.

Here’s what you can do

Viruses have a bad habit of mutating. The only thing you can take right now at this moment is a flu vaccine. It may not stop the virus and has limited protection, but it does give upto 90% more protection from a potential infection.

Other than that, you can do these things till a vaccine comes out for the current pandemic(which, as stated before, can take years):

• Get a flu vaccine every single year

• Avoid anyone who is sneezing and coughing

• Wash your hands multiple times a day with soap and water

• Do not touch your face frequently.

• Avoid being outdoors, especially in more crowded places, unless absolutely necessary.

In case the COVID-19 is anything as bad as the Spanish flu, it is definitely a cause to worry. To deal with such a situation:

• Get enough necessary supplies for your family, including medicine (and medical insurance).

• Create an emergency plan, and correspondingly an emergency fund.

• Be sure to make means for the care of your elderly parents, and keep them safe.

• Write down all your essential medications just in case you need them.

 

We hope that this article will help you in these tough times, and we wish you safety and the best of luck. Together, let us beat the Coronavirus.