Daily Times

No one in their wildest dreams could think of the world changing in such a short period of time. COVID-19 has paralysed nations and governments on such a massive level that no one could imagine. Empty streets have become the new normal during the COVID-19 pandemic. Thousands are laid off; stores are shut down; public gatherings are banned; and travel restrictions and social distancing have been imposed. One third of the world shut down. All of that has a colossal impact on the global economy. Airlines, import export companies, tourism, retailers, restaurants, and many other non-essential services have been suspended.

Thousands of companies have stopped their production, resulting in zero income and unpaid employees. Many companies have now started to fire their employees as they are themselves running out of money to pay the costs. Nearly 15 percent of America’s unemployment has increased in the past few weeks; it is estimated that 25 percent of the total population would be left with no jobs at all. The United Nations is reported to have said that the world may face a shortfall of two trillion dollars in its global income. The sum of 220 billion dollars will be secured to help the developing countries during the pandemic.

Many services have converted to digitalisation. E-learning, fitness classes, food and grocery delivery services, and telecommunication apps are being used to keep up with the situation. Colleges and universities are conducting online classes. Many companies have allowed their employees to work from home via video conferencing for general and important discussions. Grocery stores are providing home delivery services, maintaining the social and physical distance. Extracurricular classes, such as fitness, yoga, dance, singing, and makeup are being held online; thousands of students try to maintain their productivity by learning new skills. Motivational speakers are also playing their part by organising online gatherings of audiences to encourage them during the dark period.

Many industries have adopted to work from home in a new pattern, which is inaugurating the new reality of our future working patterns and wide options of arrangements. There are still many companies and industries that cannot rely on digitalisation.

Industries like agriculture, construction, aerospace and travelling remain non-operational during the COVID-19 pandemic. Businesses like hair salons, spas, event organisers, movie theatres, and restaurants are also temporarily disabled. Almost 80 percent of services are facing obstacles because most of them require some kind of personal interaction. They are not effectively high-tech and are thus in trouble. Some of them might soon end up shutting down if the situation remains unaltered for a few more weeks.

Another industry that is facing both the positive and negative effects of COVID-19 is the oil industry. The world has witnessed the bitter oil price war between Saudi Arabia and Russia. Combining that with the coronavirus pandemic, the sapping demand for oil has led to the fall in prices drastically low for the first time in twenty years. A barrel of oil is now worth less than one home delivered pizza would cost in South Korea. The temporary suspension of services of larger industries like manufacturing and air and sea travelling have bought down the curve of demand to the extent where one of the most valuable fossil fuels is now in access but nowhere to be used.

It is estimated that in the first quarter of this year, global oil usage is 3.9 million barrels per day lower than last year

Oil refineries have cut their 20 percent of imports in last month; it is estimated that in the first quarter of this year, global oil usage is 3.9 million barrels per day lower than last year. In order to maintain balance in the market and protect their economies, the Organisation of Petroleum Exporting Countries (OPEC) have decided to cut oil production by 1.5 million barrels per day.

Whilst the steep declining prices of oil and gas are not good for the countries that rely on oil exports to majorly contribute to their GDPs, it is favourable for consumers and can be beneficial to the global economy. In an interview, Jacob Kirkegaard, senior fellow at the Peterson Institute for International Economics, said, “An oil price decline of this magnitude is significantly a benefit for a global economy in a sort of synchronised downturn because the oil exporting countries have a lot less revenue but they constitute a much smaller share of global consumers than oil importing countries do. When you want a global recovery to begin or strengthen, you really have to have the largest number of people face a declining price of an item that they always buy, namely oil. So overall, this is benefit, in my opinion, in the short run for the global economy.”

It has been a few weeks since the world essentially came to a halt. Figuring out how long the economic recession will last is a challenge. Health experts say that it could be months before we start seeing signs of change. Social and physical distancing could continue for a long time, depending on how long the pandemic continues. In the meantime, it would be a constant pressure on governments to tackle the situation and keep their economies stable.

Jacob Kirkegaard also said, “It will be the role of a government to ensure income security for people and provide the kind of mitigating factors that allow companies to survive even when they have no business. That, for instance, would mean subsidising wages of workers, facilitating that they can roll over loans, and offering state guaranteed cheap loans.”

What is happening around the world has made one thing clear that each and every industry-no matter how large or small, or the amount of money it makes-is facing instability. Even billions of dollars are failing to help them stand during the difficult period of COVID-19. The pandemic is not just a threat to lives and health, it is equally perilous to the global economy.

What we know at this point, based on expert opinions, is that social and physical distancing should be completely practised. The pandemic will take its time to leave the world, but we can keep ourselves clean by washing our hands properly and staying in isolation to slow the spread from person to person. Medical teams are doing their best to take us out of this situation by serving at hospitals day and night. The least we can do to play our part is to stay inside and avoid any human interaction. The sooner it comes to a halt the faster our economy recovers, and the world goes back to normal.

The writer is a teacher in China