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The Financial Express

Economic fallouts from Covid-19

Shihab Sarkar | Published: March 30, 2020 21:33:05


Economic fallouts from Covid-19

In the present world economic order, it doesn't take much time for a country to feel the impact of a massive disaster. If the calamity is global, scores of nations are seen struggling to cope with the socio-economic fallouts. The poorer countries feel the bite the most.

The coronavirus currently raging throughout the world has started demonstrating this stark reality. In the case of natural disasters like earthquakes or hurricanes and typhoons, only a limited number of countries in a region come out as being affected. Earthquakes are normally limited to single countries. But when the disaster is a worldwide pandemic, and continues to careen towards becoming cataclysmic, the scenario unveils itself in a different style. A great economic crisis starts brewing and, later, begins simmering, in a lot of countries after the initial shock of the epidemics' onslaught is tided over.The syndrome is found in all countries irrespective of economic status.

In the case of the present global onslaught of the Covid-19, many a highly developed country is found taking emergency plans to deal with abruptly surfaced economic disruptions.

Being on the dreaded path of the Covid-19 calamity, Bangladesh needs to thoroughly assess possible economic disruptions following a full-scale attack of the disease in pandemic form. Apart from micro-economy ventures, it is the readymade garment (RMG) sector which has lately emerged as the most prominent one in its economy. Steps are being mulled to help keep the sector afloat. Seeing the largest export-oriented sector function properly has now become a great challenge to the government and the apparel sector. The task is delicate due to its labour-intensiveness as well as its link to the economies of the buyers.

The state of economies of the industrialised world is fairly evident. Few of the global economic giants have been spared the assault of the pandemic and its impacts. The US has started giving serious thought to its unemployment problem cropped up overnight -- amid scores of other fallouts from the novel coronavirus attack. While the government has announced a lot of economic bailout measures, noted experts of the country have observed that the Covid-19 will linger as a threat to the global economy and financial markets. "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," said Ben May, head of Global Macro Research at Oxford Economics, in a report recently. In his observation he was clearly referring to the lockdowns, and various types of restrictive measures. He believes, "Widespread Chinese lockdowns in some hotspots -- if taken disproportionately, could induce panic and weaken the global economy even more."

Summing up their observations on the economic scenarios in the developed world, researchers unanimously say the deepening impacts of coronavirus on the world economy and the accompanying fears have rocked markets globally. It has resulted in the plunge of stock prices and bond yields. Few sectors in a coronavirus-afflicted country are now free of the pandemic's impact. They range from those related to social, everyday life to pastime activities. The latter has already started taking its toll on both younger and elderly segments.

In spite of the disparate impacts on the corona-affected nations, the one related to economy has evidently emerged as the most important one. The giant US economy has started admitting its difficult times. The country's Federal Reserve Chairman Jerome Powell says, "The US may already be in a recession."

One of the sectors most affected by the Covid-19 in the US appears to be the one involving jobs. As has been gleaned from the latest reports, a record 3.3 million Americans have applied for unemployment benefits. Against this backdrop, the Senate has passed a historic stimulus bill to combat the virus. The nation's GDP [gross domestic product] is also feared to decline amid the recessionary phase. An alarming report has stunned the world when President Donald Trump said the other day that he believed the coronavirus-linked economic instability might raise suicides in the country. Alongside this news, a March 27 report says President Trump has signed the $2 trillion stimulus package aimed at helping workers, small businesses and industries grappling with the economic disruption. Americans this time appear to be eagerly looking to increased government stimulus. Lockdowns in entire states and the large cities like New York add to the trepidation among the citizens. In terms of people struck by the Covid-19 virus, the US now tops the list comprising European countries, and China. The number of novel coronavirus cases in the country has exceeded 130,000.

In Europe, Italy has lately emerged as the country worst affected by Covid-19 in the continent. With nearly 100,000 infected and fatalities crossing 10,000, Italy comes immediately after the USA. The country has been a popular destination for unskilled Bangladeshi expatriate workers. In the exodus from Italy, they comprised a large segment. A lot of panic-stricken Bangladeshis have returned from the country leaving their temporary jobs back in different Italian cities. After returning to the homeland, a sizeable number of them may have to face up to a grim struggle for survival. Economically shattered Bangladeshis have also returned from Spain, another severely affected country in the world.

A common feature distinguishing the star-crossed Bangladeshi expatriates from Europe is that their remittances have changed the lot of their families in the country. A great uncertainty now shrouds their going back to the continent. If the opportunity visits them anytime in the future, it may not materialise before Italy, Spain or France recover fully from the shock dealt to them by the Covid-19 pandemic. As a country still considered a least developed country (LDC) but aspiring to graduate to a middle-income one, Bangladesh continues to promote micro-enterprises based on small entrepreneurial loans. The economy is largely donor-fed. In the post-coronavirus world, foreign aid may not be forthcoming like before.

shihabskr@ymail.com

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