Ever since the advent of the COVID-19, economies around the globe have been struggling, and even the most developed nations have hit the rock bottom. The employment rates have been drastically falling rendering thousands of millions of people jobless. Somewhere in the beginning, America’s Department of Labor recorded the highest number of unemployment.
The countries as well as the economists could have never imagined how worse this situation could get, they were in simple terms, unprepared.
The economy activity has almost been sledge-hammered and the crisis has only deepened further. Over the past few months, the world’s stock markets had become stagnant and it was only towards the end of the last year that the situation seemed to normalise.
In the initial stages, to stop the virus from spreading, whole towns and cities were shut down, with their marketplaces and local businesses. People were forced to do so, or else bear the brunt of the deadly virus, so a situation close to a total lockdown arose in almost all the nations.
Worldwide, it happened on an unprecedented scale and caused a never seen before economic crisis, the impact of which is still being faced. Sectors including retailing, hospitality, entertainment, hotels, restaurants and other sectors which involved direct consumer interaction.
These places were shut down for a long while with absolutely the bare minimum of revenue but extremely high costs. The lockdowns had a devastating impact on the industries as these rely on goods and materials on a daily basis, and in this age of globalisation, even across the borders.
The production of the major industry houses ceased to operate normally and this coronavirus was almost successful in breaking the link in this vast global network, and the interconnection around the globe. As stated by leading news channels, the problem eventually started in China, where this disease was first contracted. Not just this, China is considered to be the bedrock of the global supply chain for the businesses and after the virus hit the wuhan region, the supply chains came to a standstill.
For example, in the US 40% of the local businesses have been forced to shut down due to the COVID-19 crisis whereas some businesses such as delivery services, drive-throughs. 50% of the dine-in had to shut down their operations because of limited seat capacity, social distancing and all this eventually lead to a huge loss for the economy. People preferred to have their food delivered to them with the option of no-contact deliveries instead of having it in a public place with minimal sanitisation.
The Trump administration tried to propose a few solutions such as the Stimulus checks (twelve hundred dollars in may and six hundred dollars in December), whose main objectives were to help put money in people’s pockets so that it could boost their dying economy. The DJIA (Dow Jones Industrial Average) saw its biggest crash/decline under the coronavirus pandemic almost similar to the wall street crash of 1929 and the financial crisis of 2007-08.
The head of the International Monetary Fund released a statement wherein it stated that the situation worldwide worsened with each passing day with a havoc wreaking on the economy of Britain. A glimmer of hope was seen in China, as it turned to come out of the V shaped recession, and analysts suggest that if China can come out of it, the other nations and their economies can bounce back too. One of the peculiar features of this pandemic has been the work from home, which has become extensively popular and might even change the whole concept of working in office.
Thanks to the high speed broadband, the meetings are now done via video conferences and now one’s home has become the workplace for most in the 21st century. This would thus help the firms save on rent, furniture, electricity and others. Reports also suggest that the time which was used for commuting to and fro is being highly reduced and people are using the time for more productive activities. Along with this, the carbon emissions have also decreased to a large extent.
In the past, great plagues of history have also wreaked economic havoc and to cite an example here, the plague of Justinian in the 6th century killed tens of millions of people and the Romans back in the day had less manpower to protect their empire. Not only this, but there was also a decline in agriculture and trade which led to spiraling inflation and contributed to intense doom for civilisation.
The thing which now needs to be done at this hour to come out of this crisis is to have extensive medical response and the peoples whose incomes have been hit, they have to be compensated equally. The government would also have to think cautiously about the recovery phase, as to adopt a more standard economic approach and balance the demand and supply in the market structure. Some scholars even state that intense pressure would’ve to be placed on the health sector in particular.