A coronavirus pandemic will devastate the global economy
The chance of COVID-19 turning into a global pandemic is very real
Global Rating Agency Moody's has assigned a probability of 40 per cent for COVID-19 turning into a pandemic. A disease prevalent over a whole country or the world is known as pandemic. COVID-19 is showing many signs of turning into a pandemic. It has spread to 47 countries across all continents.
Major events world over are being cancelled or postponed. Nice in France and Rio De Janeiro in Brazil have curtailed the last day of their famed carnivals. Facebook cancelled a major annual tech conference F8 Developer Conference due to coronavirus concerns. The Mobile World Congress was cancelled earlier, scheduled in February due to similar concerns over the virus. The Milan Furniture Fair is the largest furniture fair in the world and was slated to take place between April 21 and 26. Organisers announced that it has been postponed until June.
Buddhist spiritual leader Dalai Lama announced he would postpone an ordination ceremony for new monks and cancel all his public duties until further notice. The Chinese Grand Prix set to take place from April 17 to 19 has been postponed because of coronavirus fears. The Irish Rugby Football Union has postponed the Six Nations Rugby matches.
China’s National People’s Congress, the key annual gathering of lawmakers scheduled to take place in March, was postponed. It is the first time in decades that China has been forced to delay the meeting. The Saudi government announced that it is temporarily banning foreign pilgrims from entering the country which is home to the holy cities of Mecca and Medina. Tokyo Olympic Games scheduled for July could be cancelled, if the disease is not contained by the end of May.
Moody's has also said that if COVID-19 turns into a pandemic, there will be a global recession in the first half of this calendar year. Stock markets world over are crashing. Dow Jones has fallen by 1190 points on February 27, the steepest one-day fall since August 2011. India is already in a stagflation with a low GDP growth rate, high inflation and high unemployment. The government of India would do well to bring out a white paper on the economy and on how it plans to navigate the crisis.
A pandemic is a great leveller. Coronavirus has demonstrated how vulnerable human beings are. It does not differentiate between developed and developing countries, rich and poor people, between the rulers and subjects, between different religious faiths or between young and old. Iran's Vice-President has tested positive for COVID-19. China has already placed many of its cities under lockdown. Now a European country like Italy is forced to place as many as 30 of its cities under lockdown. Several positive cases have been reported from California, USA. This is a moment for introspection by people. Greed for power and money should give way to brotherhood and benevolence.
Luckily the fatality rate in coronavirus is not very alarming. But its spread across geographies is alarming. Some people have started comparing the coronavirus with another pandemic that took place a century back. In 1918, the influenza pandemic ravaged the world, an unusually deadly pandemic, the first of the two pandemics involving H1N1 influenza virus, with the second being the swine flu in 2009. It infected 500 million people around the world, or about 27% of then world population. The death toll was estimated to have been between 40 million to 50 million, and possibly as high as 100 million, making it one of the deadliest epidemics in human history. Wealth equal to 2.5 years of world GDP was wiped out then. The adverse impact of coronavirus in terms of fatality and wealth destruction may not as grave as the 1918 pandemic, because human beings have achieved huge advancements in medical science, technology and governance since then. It is time that our hearts and minds also broaden a bit.
(V Venkateswara Rao is a retired corporate professional and a freelance writer)