By the time this article was written (2nd April 2020, 1530hrs), the total Coronavirus cases around the globe recorded was at an astonishing number of 937,941 with 659,708 in mild condition, 35,772 in serious or critical condition with life support, 47,273 deaths, and 195,188 recovered patients (Worldometer, 2020).
USA has been the biggest contributor as the cases number reached 215,344 with an average of 15 deaths per million population and more than 500 per day (Lacina, 2020) followed by Italy 110,574, Spain 104,118, and China 81,554.
Spain and Italy have notably recorded the highest death rate per million population at 218 and 201 numbers respectively which were far higher than any 203 countries infected by this pandemic outbreak (United Nations, 2020).
China as the epicenter of this COVID-19 outbreak has economically faced several setbacks with an average of -24.5% change on investment in fixed assets, -20.5% on retail sales, -15.9% on value of exports, -13.5% on industrial production (fastest ever contraction in the past 30 years), and -13.0% drop on various services production (Lacina, 2020).
Apart from that, the unemployment rate in China also rose from 5.2% in December 2019 to 6.2% in February 2020.
How much has Coronavirus cost the world economy?
According to United Nations (UN), a slowdown in the global economy that was mainly caused by this pandemic is estimated to cost at least US$1 trillion.
In addition to that, a steep drop in oil price has been a major contributing factor to the growing sense of unease and panic (United Nations, 2020).
Even at this point in time, it is still unclear about how major economies in the world will react to this economic slowdown which definitely going to be the hardest time to recover as expected by the major financial forecasters.
Governments are also advised to react immediately by increasing their expenditure on health care facilities in order to avoid more damages and meltdowns. Scott (2020) expects that the economic impact of COVID-19 will be more severe than the Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).
In 2003, SARS infected 8,000 people around the world and killed 774 of them (Scott, 2020) with an average damage of US$50 billion to the world economy. Likewise, MERS in South Korea killed 38 people and led to approximately US$8.5 billion lost in the year 2015.
In a comparison view, Coronavirus pandemic has already resulted an 11.5% drop in S&P index of US companies which is the worst plunge since the crisis in 2008.
World Health Organization (WHO)’s point of view
In the midst of these economical fears, data from many countries are also heavily doubtful as many of them are lacking in terms of testing capabilities, clinical characteristics, political pragmatism, and notably long incubation period that can consume up to 12-14 days (United Nations, 2020).
The World Health Organization has underlined several urgencies that need to be intact during these hardest times in order to prevent more severe damages.
Firstly, paying high priority on keeping the supply chains and logistics open with proper safety measurements so that various drugs, vaccines, and surgical masks are widely available to deal with swelling demand from every angle.
Sensible deterrent methods to be undertaken in making sure the supply chain connectivity is unbroken as it is vulnerable for many just-in-time (Lacina, 2020) manufacturing activities.
Secondly, providing a proper flow of trusted and valid information to the general public.
Frontlines and firms need to uphold honest and transparent procedure as well as make sure the public obtain timely information about the actual severity of the condition.
For instance, lack of response by Iran’s healthcare system led to a major loss on containment of this pandemic that subsequently resulted in it spreading throughout the rest of Middle East countries.
Thirdly, critical research on the health and pharmaceutical sector needs to be immediately activated with sufficient funding to undertake various diagnostics tests, research on prevention methods as well as on the development of new vaccines and drugs.
Priority will be given to ensure an adequate supply of gowns (Scott, 2020), scrubs, aprons, sterile gloves, protective goggles, face shields, and masks.
Flattening the COVID-19 Curve
A deeper and severe recession might occur depending on how contained the novel coronavirus is to be as a result of either shorter or much longer lockdown (Hausmann, 2020).
Markets are facing a catastrophic recession in advanced economies like the United States, Spain, Italy, and France amidst human death and suffering. Most developing countries have trust toward foreign income on a combination of commodity exports, tourism, and remittances: all are expected to collapse (Hausmann, 2020), leaving economies short of dollars and governments short of various forms of tax revenues.
If standard prescriptions such as devaluation and seeking international assistance methods are undertaken, this might result in zero resources to fight the virus and no means to protect the damaging economy.
Developed countries should not – as the European Union did (on exercising export limits of medical equipment outside the bloc) (Bayer, Deutsch, Vela and Tamma, 2020) that may further accelerate the seriousness of the current condition.
Flattening the COVID-19 curve requires major attention from G7 and G20 countries (Hausmann, 2020) as they should work on redesigning its Rapid Financing Instrument in-align with US’s swap line method that can be overseen or intermediated by International Monetary Fund (Lesser, 2020) to cater the urgent current needs.
Apart from economical changes, lifestyle changes are also essential in order to flatten the COVID-19 curve.
Changing the operating model into more digital and mobile technologies to encourage better remote works and other relevant activities may help.
The use of artificial intelligence to deter hacking issues can further smoothen this process. Adapting to various regulatory and support from the government was also an indispensable method.
All people should be working on protecting each other while helping the nation in the bigger picture to fight against the pandemic.
As a result of the first phase of MCO (Movement Control Order) in Malaysia, the Director-General of Health has mentioned the actual number of COVID-19 cases that showed a lower trajectory than initially forecasted by Malaysian Institute of Economic Researcher (MIER) where the number that was expected to reach by 31 March 2020 was 4,087 while the actual number of cases reached on 1st April 2020 was 2,766 only (1,321 cases lower from projection) (Kaos Jr, 2020).
The solutions may be technically, socially, and physically challenging but by looking at a bigger picture onto economic survival (Lesser, 2020), millions of people livelihoods across the globe and health of our own people may trigger authorities to embark on it as soon as possible.
Prepared by:
Khartic Rao Manokaran & Associate Professor Dr. Suresh Ramakrishnan
Azman Hashim International Business School (AHIBS), UTM
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Reference:
Bayer, L., Deutsch, J., Vela, J., & Tamma, P. (2020). EU moves to limit exports of medical equipment outside the bloc. Retrieved 2 April 2020, from https://www.politico.eu/article/coronavirus-eu-limit-exports-medical-equipment/
Hausmann, R. (2020). Flattening the COVID-19 Curve in Developing Countries. Retrieved 2 April 2020, from https://www.weforum.org/agenda/2020/03/flattening-the-covid-19-curve-in-developing-countries/
Kaos Jr, J. (2020). Health Ministry figures show Covid-19 curve is flattening, says Health DG. Retrieved 2 April 2020, from https://www.thestar.com.my/news/nation/2020/04/01/health-ministry-figures-show-covid-19-curve-is-flattening-says-health-dg
Lacina, L. (2020). Things to know about coronavirus today, 1 April. Retrieved 2 April 2020, from https://www.weforum.org/agenda/2020/04/things-know-coronavirus-today-1-april-covid-19-pandemic-round-up/
Lesser, R. (2020). Commentary: 6 steps to sustainably flatten the coronavirus curve. Retrieved 2 April 2020, from https://fortune.com/2020/03/19/coronavirus-covid-19-flatten-curve-solution/
Lohrmann, D. (2020). How Is Covid-19 Creating Data Breaches?. Retrieved 2 April 2020, from https://www.govtech.com/blogs/lohrmann-on-cybersecurity/how-is-covid-19-creating-data-breaches.html
Scott, J. (2020). The economic, geopolitical and health impacts of COVID-19. Retrieved 2 April 2020, from https://www.weforum.org/agenda/2020/03/the-economic-geopolitical-and-health-consequences-of-covid-19/
Scott, J. (2020). The human impact of COVID-19 – and how business can help. Retrieved 2 April 2020, from https://www.weforum.org/agenda/2020/03/this-is-the-human-impact-of-covid-19-and-how-business-can-help/
United Nations. (2020). This is how much the coronavirus will cost the world’s economy, according to the UN. Retrieved 2 April 2020, from https://www.weforum.org/agenda/2020/03/coronavirus-covid-19-cost-economy-2020-un-trade-economics-pandemic/