Corona Virus and the Global Economy

The year 2020 started off with a bang and continues to "surprise" with its twists and turns of events. I hope everyone is aware of Coronavirus or Covid-19 (Which they took years to name) . Covid-19 overall is not a dangerous virus. It is less lethal than the flu and has caused fewer deaths as well but the main fears surrounding it is that Corona Virus is much more closely linked to the common cold than the Flu and as there have not been real attempts to attempt to vaccinate or research that family of virus vaccinations will take time. Keeping that in mind Covid-19 is really only a threat to the old and others who have preexisting conditions. Yet it has led to a collapse of the global economy and almost overnight shifts of production, business, and travel. How and Why?


The economic impacts caused by the Corona Virus, in my opinion, is due largely thanks to two things. One of its initial start in China a worldwide producer of parts and services consumed globally and a trade partner with the US and most of the developed world. Two of the nature of a globalized economy. When this hit China it severely impacted production, at the peak of the struggle of containment in China production quotas had fallen to nearly 20% of initial operating capacities causing a legitimate shortage of supplies globally and leading many to fear for investment in China. Since the global economy is now interconnected more than ever before something in Wuhan China which affects the production of medicinal supplies in India can affect the entire world. This can be seen in the stock market drops along with nations consistently taking more and more concerning actions to secure their economies.


As the economy slows and enters a recision panic is created which leads to mass selling and other events which make the situation worse. India for example over concerns of coronavirus and the shrinking economy has significantly cut its exports of vital materials necessary in developments in common medicines. This led to the mass purchase of all available material creating a shortage and disparity before anything has even occurred. This fear and panic create a cycle of continuous and downward spiraling into a hole that is difficult to come out of.


What now? The Virus is concerning and requires propper attention but doing nothing or going to the extreme does not help anyone. Governments focusing on nationally confronting the issue of the epidemic will be disappointed as the very issue is a global one requiring unified stances against the virus. What I personally would have liked to see was the global leader recognizing the natural economic shrinking due to the virus but announce the measures to combat them. Cancelation of School and large events to give time for testing people has proven effective in japan but now it is at the point where it is not clear what will happen next. Will the virus kill more people or will the economy?