By - Marina Seyie Narendra
Concerns over the spread of the COVID-19 virus have translated into an economic slowdown.The world economy will go into recession with a predicted loss of trillions of dollars of global income due to the COVID-19 pandemic, it’s a serious trouble for developing countries with the likely exception of India and China, according to a latest UN trade report.The coronavirus pandemic is set to leave 170 countries with lower GDP per capita by the end of the year, but the projection may be actually a more optimistic picture than reality produces. One of the reason is that the America is constituting less than 5 percent of the world’s population. Americans generate and earn more than 20 percent of the world’s total income. America is the world’s largest national economy and leading global trader but worse part is that they are badly affected due to Corona Virus. India is on the verge of an unprecedented economic catastrophe as the humanitarian disaster from the Covid-19 pandemic unfolds. The sheer scale of disruption from the ongoing national lockdown to contain the outbreak is unprecedented in Indian history.The greater part of the non-agricultural work force will have no livelihood for the duration of the lockdown and it may continue beyond May 2020. In the absence of massive public intervention, there will be widespread increases in poverty. The macroeconomic concern now is to stabilise an economy that is in free fall, which requires measures to sustain some demand as well as to ensure supplies. Restrictions on movement of people, goods and services, and containment measures such as factory closures have cut manufacturing and domestic demand sharply all over the world. The impact have also seen on business travel and tourism, supply chains, commodities which has lower confidence in growing. Following the pandemic, the shortage of manpower led to a rise in the daily wages of labourers, as they were able to market themselves to the highest bidder. Negative impacts of the coronavirus disease are mainly borne by people working specific industries, such as restaurants, hotels, transportation companies, movie theaters and tourism. Infrastructure investment will not directly absorb many workers who worked in the industries mostly impacted by the disease.
There is need of all countries to introspect and re-evaluate their supply chains to become less dependent on China. The world is opening its wallet to fight the effects of the coronavirus outbreak. The United States unveiled a $2 trillion rescue package. European countries have announced their own spending blitz, and Japan approved a nearly $1 trillion economic stimulus plan. The Indian government has announced a $22.6 billion stimulus plan to directly aid poorer communities affected by the coronavirus lockdown. The Asian Development Bank has assured India $2.2 billion in its fight against the Covid - 19 pandemic. The International Monetary Fund recently announced the “Great Lockdown” recession will drag global GDP lower by 3% in 2020, but its managing director now thinks the gloomy outlook could be too positive. A look back at history can help us consider the economic effects of public health emergencies and how best to manage them. In doing so, however, it is important to remember that past pandemics were far more deadly than coronavirus, which has a relatively low death rate. A fully-funded health system is key to fighting both virus and stemming the economic impact. Following points of concern can be looked into to overcome present crisis:-
1. Strengthening health systems financially:-
(a) Full funding for core public health measures such as case-finding, testing, contact tracing, collecting data, and communication and information campaigns.
(b) Strong financial supporting for health systems to ensure that health workers are paid their salaries, and health facilities have the reliable funding and need to purchase essential medical supplies.
(c) The removal of financial barriers to provide free testing and care for coronavirus patients regardless of insurances.
(d) Need to have more number of medical colleges and Hi-Tech hospitals.
(e) Need to establish more number of research laboratories.
(f) Requirements of Hi-Tech ambulances for speedy transfer of patients without endangering lives.
(g) Sharing of case studies of patients between states and countries.
(h) Mandatory to have medical treatment cashless cards for every citizen. Premiums of poor can be funded by government whereas middle and rich class can purchase themselves.
2. Strengthening the world’s economies:-
(a) Prioritized help for emerging markets and developing economies which are hard hit by the crisis.
(b) Emergency financing to the countries running out of lively stock.
(c) Eased debt obligations for the IMF’s poorest members through the Catastrophe Containment Relief Trust.
(d) Need promote economic growth of state or country through innovation. We must have national policies that promote innovation to ensure that there will be enough prosperity to carry on into the next generation.
(e) Countries have to aggressively reach out own skilled labours to reduce dependency on other countries. We have to made it more difficult for foreign entrepreneurs to come to and stay in India.
(f) Eradicate illiteracy by compulsory education system for every citizen and also providing skills for various job options to eradicate employment.
(g) Lower interest rates – reduce the cost of borrowing and increase consumer spending and investment.
(h) Increased real wages – if nominal wages grow above inflation then consumers have more disposable to spend.
By - Marina Seyie Narendra