Covid-19 and Global Economy

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The Novel Coronavirus has also known as Covid-19, that has emerged from Wuhan, China in December 2019 and spread through the whole world rapidly. The world health organization has declared it a pandemic on March 11, 2020. The announcement of global emergency further created panic and instability. Initially, the world was unaware of the catastrophes of the virus. Due to the dependent and integrated world, the virus spread rapidly from Wuhan to southeast Asia, South Asia, Europe, America Africa, the Middle East, and Australia as well. The Modern world is a highly interconnected and complex economic integration of people and states. The initial outbreak of coronavirus and global emergency directly impacted the economy of states. Therefore, for the stabilization of their economies, the banks started initiatives of dropping down interest rates to support their local economies. International trade has been affected by strict measures. International flights and exports were slowed down which affected the global economy. Every sector faces the severe impact of covid-19 i.e., the job sector, markets, capital, businesses, education, etc.

First of all, if we talk about the role of globalized political economy as a factor in transforming the initial Corona outbreak into a worldwide pandemic, there are several indicators which are showing the role of the political economy as a facilitator of the pandemic. First and foremost is the global interdependence of economies of states on each-others. China is a global market and an emerging economy. Every state has economic ties with the People’s Republic of China. The first case was reported in Wuhan and spread in the whole province within a few days. From China to the rest of the world the strain was spread within a few months and the whole world face the destruction of the Coronavirus.  The economic dependence and inter-connectedness of markets spread this deadly virus from one state to another and act as a carrier. Secondly, the movement of people played a role to spread the virus across the globe. The irresponsible behavior of people and lust of markets facilitate the spread from one state to another and within a state as well. Last but not least the vaccine politics of states also led this outbreak into a pandemic. For the sake of their vaccine markets and money maximization, the state let this issue become global.

On the other hand, if we talk about the turn impacts of covid-19 on the nature and functioning of the global economy, the impacts are countless. In short, every sector faced the implications due to this pandemic. First of all, the job markets faced a serious crisis. A large number of people lost their jobs and cut down on salaries due to global emergencies and lock-downs. In short, we can say the global unemployment rate has been increased since 2020. e.g., In the US, around 8.9% of people have been out of work. Globally Millions of people have been accommodated by governments through Job retention schemes. Overall, the global economy shrunk by 4.4% in 2020, according to IMF which also described the decline as worst after the global recession of 1930. Secondly, the health sector faced high impacts. The unavailability of proper medicines and research on this virus increased the death tolls and infection. Not only in underdeveloped but the developing states also faced the health crisis. The shortage of medicines, hospital beds, nurses, doctors, and proper hygiene conditions were faced by different states. This played a huge role in declining the global economy. Thirdly, the tourist industry has been the biggest victim of the virus. Airlines are busy canceling flights and customers canceling business trips and holidays. One reason for this is the emergence of new variants which have kept the environment uncertain and forced countries to introduce stricter travel restrictions. Aviation is still far away from recovery as travel restrictions are still in place after the wake of new varients of Coronavirus. Some estimates even specified that international traveling won’t return to the pre-pandemic level until 2025. The agriculture, industrial, and education sectors of the state have also been affected very badly due to this pandemic. The partial and complete lock-down reduced the average production of industries and the price-hike decrease the buying capacity of people. The global import and export level has also been affected. However, the world has to recover from the pandemic, as it has recovered from every other chaotic situation before.

To conclude, the globalized economic world act as a facilitator to spread this virus from one state to another and make it a pandemic. But in turn, this pandemic affected the globalized world economy as well. The global negative trade and introversion policies of people acted against this globalized economic order. On the other hand, vaccine politics is also a part of the global political economy, where the race of vaccine production among states is paving a way towards a more and more competitive economic world. Though the response of states was slower at the initial level now, things are moving toward normalization. The sole weakness was the collective global response by the states and organizations who were made to facilitate the economic world. There is a hope that if states deal with this economic imparity collectively and international organizations play an effective role, the pre-covid economic order may be achieved.

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