The world is facing a severe and acute public health emergency and economic threat due to the Covid-19 pandemic, which originated in Wuhan Province of China in last December. The World Health Organization (WHO) on 11 March officially declared the coronavirus (Covid-19) as a global pandemic.
With the WHO announcement, the financial markets across the world started to tumble. The outbreak has also led major institutions and banks to cut their forecasts for the global economy, according to an editorial of the quarterly news bulletin of International Chamber of Commerce Bangladesh's (ICCB) released recently.
Covid-19 is the defining global health crisis and the greatest economic challenge the world has faced since World War Two and the Spanish flu, also known as the 1918 flu pandemic, which lasted for 15 months. It infected 500 million people – about a third of the world's population at that time and resulted in the deaths of some 50 million.
The descendants of the 1918 virus remain active today; as endemic influenza viruses, they cause significant mortality each year. The world has made so much of development since then, but unfortunately the health sector has remained the most neglected.
The crisis highlighted the need for urgent action to cushion the pandemic’s health and economic consequences, protect vulnerable populations and set the stage for a lasting recovery.
For emerging markets and developing countries, it is critical to strengthen public health systems, address the challenges posed by informality, and implement reforms that will support strong and sustainable growth once the health crisis abates, the ICCB editorial pointed out.
According to experts, the outbreak of the Covid-19 will have devastating economic effects on least developed countries (LDCs). At the same time, as developed economies slip into recession, it will result in falling commodity prices and causing a double squeeze on these countries' export earnings.
In the short term to manage the situation, countries all over the world, including Bangladesh, are racing to slow the spread of the virus by testing and treating patients, lockdown, carrying out contact tracing, limiting travel, quarantining citizens, and cancelling large gatherings such as sporting events, concerts, and schools. The pandemic is moving like a wave—one that may yet crash on those least able to cope.
The longer-term consequences of this pandemic may arise from mass unemployment and business failures. Some industries, such as tourism and aviation, will certainly face hardships. It has created an unprecedented level of risk, causing investors to suffer significant losses in a very short period of time, it said.
On the other hand, the necessity for social distancing has led to cancellation of enormous events, ravaged the travel business, closed businesses, restaurants and shopping malls, resulting in an outsized negative demand shock.
It is still too early to properly assess the extent of the negative impact the virus will have on the world economy, since the situation is evolving every day, economic estimates can only provide a magnitude of the impact. The actual ramification will depend on the extent of the spread and length of the duration of the outbreak and how quickly policymakers can take action to mitigate the health and economic damage.
Covid-19 is both the biggest health crisis and most uncertain threat to the world's economy. Many highly developed countries are taking emergency plans to deal with abruptly surfaced economic disruptions. From an economic perspective, the key issue is not just the number of cases of Covid-19, but the level of disruption to economies from containment measures. There is a lot of uncertainty about what will happen in the post-coronavirus world.
Experts think that the mankind will see a new world which is very much different and unknown. The world leaders have to come together to save the humanity, agree on spending more resources on health care development and development of medicines to fight such pandemic in the future.