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How the coronavirus and other pandemics affect world economy

Primarily transmitted through micro droplets via sneezing and coughing, the coronavirus has already infected more than 92,000 people. The death toll of the pandemic has exceeded 3,000. The coronavirus outbreak is an ongoing international health crisis. The virus has infected not just people, but markets. Industry is performing poorly. Stock markets are falling. Economic growth is slowing down and unemployment is rising. The rapid spread of coronavirus and resultant fear has caused people in some regions to resort to panic buying and self-isolation. Here is a summary of the effects of the coronavirus pandemic on trade and commerce so far.

Global effects

The pandemic has caused a sudden decline in tourism. Jobs in travel and hospitality have quickly dried-up. The Venetian gondolas are docked. The canals are deserted, along with many of the hotels and leisure spots. Amusement parks in Thailand resemble ghost towns. Soccer stadiums in Milan are silent. Tourism jobs are unlikely to remerge before the pandemic passes. Tourism businesses are dependent on seasonal income to survive. Many business owners and their employees would go under if the outbreak continues. Many industries face similar challenges. Factories have been shut down due to quarantines. International shipping and air freight have been severely hit. Important stakeholders in major global supply chains are struggling. Apple and other manufacturers who are reliant on production units in China have reported revenue losses. Some economists have estimated that the coronavirus will cause a loss of $1 trillion to the global economy.

Helpless millions

Immigrant workers bear some of the worst consequences of the economic shocks caused by the coronavirus pandemic. Airports have been shutdown in some of the affected regions. This makes it impossible for overseas workers to return to their families. Others cannot travel to their places of employment despite visas. In some infected regions visiting public places such as airports, banks, sports venues and hotels is considered a risk. Online solutions are preferable, especially for unavoidable transactions. One service which allows foreign workers to send money online back home to their families is Ria Money Transfer. Migrants worldwide use this service to send money from the safety of their homes using their phones.

Environmental effects

The coronavirus outbreak started in China. Currently China remains the country most affected by its effects. The outbreak necessitated quarantining and temporary shutting down of many production units. As the industrial production hub of the world, the density of production units in China is high. In the normal course of business these units produce sizable amounts of greenhouse gas emissions and particulate matter. With quarantining the air pollution from factories in some regions of China has notably reduced. This effect is clearly visible from satellite images taken before and after the outbreak. Even with the widespread and far-reaching negative economic impacts of the pandemic, there seems to be a silver lining in the dark cloud.

Forecasts

To be realistic it’s not possible to predict the long-term economic impacts of pandemics. This is a conclusion reached by the World Bank in 2017. To make matters worse, relatively little is known about the coronavirus yet. Without a clear understanding of how the disease works any estimates about its potential effects would be prone to errors. The pandemic has forced economists to tone down their forecasts for global economic growth. Stock markets throughout the world have fallen in response to the uncertainty surrounding the outbreak. The greater issue is that the end is not in sight. Since there is no cure for coronavirus, there is not telling when the pandemic will blow over.

Another important issue surrounds the origin of the virus, which is undetermined. There are indications that the virus jumped from animal hosts to humans, and mutated into a deadly strain. Scientists have studied tens of past pandemics including smallpox, the plague and the Spanish flu. Pandemics are prone to originate in overcrowded areas with poor sanitation. In addition to controlling the present outbreak we must do more. It is imperative to identify and diffuse unsanitary and crowded conditions which create and spread pandemics.