Economic and Geopolitical Analyst; Global Oil Market Analyst
When Queen Elizabeth II used the words Annus Horribilis i.e. horrible year, in her Christmas address in 1992 she (or others) couldn’t have realized that things can get as bad as 2020. Starting in December 2019, patients of this mysterious disease, a modern world version of The Plague, started appearing in Wuhan, China (the origins of it are still disputed) and it soon metamorphosed from an outbreak to epidemic to a global pandemic shrouding the world in its dark, inscrutable spread. 2020 has ended but the same cannot be said about Coronavirus, otherwise known as COVID19.
It’s impact has been profound and pronounced. In economic terms COVID19 is said to be worse than the Great Depression. Estimates vis a viz growth in global economy, evidently, are depressive with the latest projection by UNCTAD saying it fell by 4.3 percent and International Labor Organization said that 10.7 percent decline was seen in terms of labor income in the first 3 quarters of 2020 equivalent to $3.5 trillion. About 3.3 billion people are at the risk of losing employment as per a statement by WHO with 132 million people vulnerable to fall into extreme poverty.
From agricultural sector to food inflation and a downturn in manufacturing to serious long-term effects on global economy, COVID19 has indeed turned the world upside down. The aviation industry has been devastated with a projected 4.3 million job loss. Closely related is the fall in tourism sector that can cost anywhere between $910 billion to $1.2 trillion.
Let our first step, thought be an introspective in nature as we step into the new year, vowing to do be a better person in every domain involved. That solves almost everything
Another important and rather more drastic impact of this virus is that on mental health. Concerns regarding ones well-being are mounting with losses attributed to mental health issues already costing us an estimated $1 trillion we were not ready for a [mental] health crisis on a global level. According to a report by UnitedGMH, data from Pakistan suggests that about 42 percent of health professionals experienced psychological distress. Due to the uncertain nature of the disease many patients also suffer from cognitive distress in the form of fear and anxiety, having profound, long term effect on their mental faculties. A marked increase have been noticed in cases of insomnia, depression, anxiety with elders even exposed to dementia. Isolation and lockdowns have also added to emotional instability.
At the end of every year I try to provide a summary, highlighting the highlights. However, this year it seems COVID19 has been the only factor overshadowing every other and almost every event can find either a direct or indirect link to it. In hindsight, 2020 seems to be a by product of a virus that has reshaped the way how we live. But how far reaching are the consequences? There are two ways we can approach the question. First, given that the world is a complex system (different from a complicated one, and more complicated than a complicated one) COVID19 as a variable has already changed the future course of world. Many of the events (economic, political, societal, cultural, medical etcetera) that would have happened in the absence of the virus will not and vice-versa. There is no way to know where the world would have been had there be no Coronavirus. But what is confirmed is the fact that in years to come we shall see many changes; structural and strategic.
The post 2020 world has already been changed, forever. Second, in many ways this narrative of the new normal will not hold and life will return back to normal – as we knew it. Thinking that our attitudes will undergo a permanent change after COVID19 seems preposterous when juxtaposed with the fact that people find it hard to abide by rules even during the pandemic . COVID19 has been a test of humanity in terms of their respect of rules and ability to practice restraint. We have, unfortunately, failed in both (my personal opinion of course).
Therefore, the world, in many ways, will not change at all. It isn’t surprising to see a virus this mysterious rendering even mysterious effects.
As we enter 2021 the vaccines are being sent to different countries. Many more are in trial – one estimate puts the number at 170. It is only a matter of time that most countries in the world will approve a handful of these and start inoculating people.
Markets are already exuberant on this news. However, realizing that virus remains an enigma especially with its capability to turn over a new mutation every now and then and the effectiveness of vaccine which will be confirmed by time not ‘initial trial results’, present themselves as a challenge and calls for caution. We should be, as a principle, hopeful and optimistic but avoid a Panglossian outlook, ‘tis dangerous.
2020 has been one of the most challenging years in human history but nothing that we haven’t seen before. We as a human race have been through violent wars, recovered deadly plagues and endured drastic natural events. This is a process of evolution, making the overall humanity -as a specie – stronger and better. But only if we decide to learn our lesson and mend our ways.
Endings should be positive, so here is some thought: Lets enter 2021 with a realization; first of gratitude that we made it and then that of the transient nature of life. Let our first step, thought be an introspective in nature as we step into the new year, vowing to do be a better person in every domain involved. That solves almost everything.