International financial markets once again flashed almost all of the recognised signs of risk aversion last week, just after they had see-sawed long enough in previous weeks to keep some hope alive that they might finally be factoring in a containment of the coronavirus. Sadly, though, just as new cases were emerging in China all week oil was dropping and gold was rising in the international market, among other prominent signs of safe haven trading. Oil is down quite naturally because China is the world’s number-one importer but also because it is the world’s workshop. And a slowdown there especially of this magnitude was bound to induce severe trauma in international trade and commerce. That means, should a miraculous turnaround not present itself in short order, that the entire global economy might well be on the verge of a recession. Germany technically, and very officially, entered recession territory just last fortnight, which implies that the rest of the continent cannot be far behind as usual. The new year could not have started on a worse note, because 2019 was the first year of stellar growth since the Great Recession of 2008 put the global economy in deep freeze. Now a mysterious virus that suddenly emerged in the world’s second largest economy, right after its trade war with the world’s largest economy had already strained global supply chains, threatens to repeat the cycle of low growth, low production, low wages and yet more misery all over the world. Needless to say that is particularly bad news for countries like Pakistan. We’re already experiencing one of the worst low growth, high inflation, high unemployment periods ever. A slowdown in the international economy could hurt ours in all sorts of ways. And that, unfortunately, is not all. We depend on China’s economic assistance, especially the CPEC partnership, to such an extent that it has got mixed up with America’s Pivot to Asia plans. And when China is hurting, to the extent that CPEC funding could well be compromised at least till Beijing gets a handle on things, Pakistan faces some particularly unpleasant headwinds. Best to make contingency plans in advance. But there’s only so much Pakistan can do. With inflation, cost of business and the interest rate so high, and the political situation far from perfect, there are no triggers for growth. And with a widespread global slowdown imminent, one that could severely restrict our donor friends’ largesse, perhaps Pakistan much like the rest of the world should prepare for a long economic winter. *