COVID-19: Global Pandemic Devastates Economies of Nations - Essay Sample

Introduction

The coronavirus is a disease that attacks human respiratory systems and has killed thousands of people and confirmed infections of millions in the world according to the world health organization tally by months of June and July the year 2020(Athey,2020). Since its emergence, the coronavirus disease has caused a global pandemic; economies of nations throughout the world have suffered devastating setbacks in their economies. The virus has attacked humans and thereby caused a decrease in a nation's workforce. The development of treatment options or a vaccine could greatly help in wiping out the virus and ease economic pressure and most importantly save lives. This reviews the economic impacts that a vaccine or an effective treatment measure for the virus could bring upon global economies.

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Lowering unemployment rates

One of the major catastrophes associated with the Coronavirus is creating a high unemployment rate globally. This is a result of temporary or permanent closure of companies and the diminishing state of products to be sold awing to the closure of manufacturing companies to the everyday business person selling goods on the go. The high unemployment brought by the coronavirus pandemic brings adverse defects such as malnutrition and even death in extreme circumstances due to starvation because of unemployment. For example in the USA alone, the proportion of people out of work has arrived at 10.4%(Athey,2020). This has brought a halt to a decade of expanding the American economy. This is fueled more by the fact that a majority of US citizens have applied for unemployment benefits which put the country at a further complicated situation. With the development of a vaccine or treatment, people will be able to operate under normal circumstances which will enable lifting of business barriers such as lockdowns and enable businesses to resume thereby saving economies.

Allowing the growth and expansion of Small Businesses

Small and medium businesses make up to an average of 48% of the economy of the USA. The businesses with less than 5 million dollars in revenue that rely on retail foot traffic have been adversely affected yet they serve to employ around 60 million Americans (Baldwin&Weder, 2020). The small and medium-sized companies have operated with the help of the US government's loans but the loans and money to boost their operations from the government declined and generally stopped reaching them. This is because most government funds were allocated and directed to ways of curbing the spread of the disease. Economists state that the US restaurant industry could lose 225 billion dollars in revenue from closures resulting from the coronavirus outbreak and shed up to 7 million jobs in the industry. With the development of a vaccine or possible treatment, some of the funds being allocated to containment measures of the virus seeing that the USA has become the new epicenter of the virus they would be allocated to these small and medium-sized businesses or organizations.

Giving life to manufacturing industries

One of the cores of a nation’s economy is manufacturing, countries such as the US, UK, and China which depends heavily on manufacturing has been the worst hit in their manufacturing industries. Unproductivity in an industry such as the automobile industry has frozen the economies of countries that are depending on it. Italy has more than 15 car manufacturing companies well known throughout the world. Fiat Motors is the parent company of car manufacturing firms through owning 90% of the firms. It has exported approximately 1.05 million cars annually in the past five years with car manufacturing making 8.5% of the GDP of Italy(Baldwin&Weder,2020). With such a boost to the Italian economy, the car manufacturing industry is important to the economy of Italy. Unfortunately, the pandemic hit Italy adversely in previous months being one of the epicenters of the virus the industry was greatly affected. Putting aside automobile manufacturing, tech company Apple was forced to close the majority of its stores worldwide awing to this pandemic. China has been a crucial element in the supply chain especially when it comes to manufacturing products globally for the past decade. The manufacturing industry in China made 4 trillion dollars in 2018 and accounts for 30% of the economy of China but yet the virus originated from China and has affected its economy like any other. In America, manufacturing makes 11% of the economy and it too has been affected by the pandemic and the manufacturing industry alone in the United States of America hired 12.65 million people in the year 2017. The people employed by the manufacturing industry in America have then had to suffer pay cuts and with some being unemployed as a result of the pandemic. All of these global economies have been adversely affected because they lack labor for carrying out operations and due to the shutdown of factories to contain the spread. With the development of a vaccine or treatment, these manufacturing industries would be able to rise again and continue to contribute to the economic growth of their irrespective countries.

Raising agriculture

Several countries globally experienced food shortages but with the onset of the global pandemic, the situation for them worsened. According to the World Food Programme(WFP), the number of people in need of food would double up. This is an alarm to the world that a solution needs to be sought out since starvation would lead to loss of death to the people at risk. In countries such as Yemen, Congo, Afghanistan, and Venezuela, the situation was at a general crisis with wars in these countries going on. Food security is enabled by several factors including labor, strategic planning, and adequate resources. Labor and adequate resources or funds being key cannot miss when dealing with large-scale production of food. Following containment measures for the virus, labor is limited and following the focus of funds to the fight against the disease, funds are also limited to some extent. In countries where farming is depended upon on either cash or food farming, their economies have been greatly hit by the economic stalemate. In the USA for example, a trade deal between America and China whereby China was to buy American agricultural products worth billions of US Dollars has been paused due to the pandemic. With such-like constraints, it will take some time before the global economy is stable again. With the development of a vaccine or treatment, these food crises would be sorted out as labor and resources would be allocated to their efficiency and therefore work on building the economy.

Oil Prices

Following a major reduction in travel to contain the pandemic, oil prices have decreased. In this century and the past few centuries, oil has been the major source of energy for machines in the transport industry. These machines like vehicles, planes, trains, and ships which are the main users of oil, are not mobile. This restricted movement due to the coronavirus pandemic has forced countries exporting oil to store the oil in oil tanks to the extent that the oil storage tanks are nearly full. Due to this emerging condition, Saudi Arabia announced in March that it will cut oil prices per barrel by 6 to8 dollars in Asia, Europe, and The Middle East after failed negotiations with other oil mining countries. By the time Saudi Arabia made this proclamation oil prices had declined by 30% and after the declaration, the prices declined further by another 30%. All of the oil mining countries have had to undergo declines in economic growths. If then a vaccine or treatment was developed then the movement would resume steadily causing an industry such as the tourism industry to be stable again and thereby create the utility of the oil through traveling. This would then have an impact on the oil-producing countries by increasing their GDP and raising their economies.

Conclusion

The global pandemic has truly caused many deaths, immune complications, and even trauma to some people. It has had diminishing global economies that supplement human survival. The vaccines should be well-calibrated and made safe for human consumption. The rush to come up with a vaccine in multiple countries may lead to unwanted and unexpected errors. Countries should also pay more attention to outbreaks of diseases and especially governmental authorities. This is because the Severe Acute Respiratory Syndrome coronavirus (SARS-CoV) was first identified in China in 2003 as an animal virus from an uncertain animal reservoir presumed to be bats that spread to other animals and eventually humans(Gourinchas,2020). If governments could have looked more closely at this disease in the past and sought out vaccines and treatment options early enough then today we would not have a global pandemic that has adversely affected our human lives and economies. A team of scientists in Texas developed a vaccine for the Severe Acute Respiratory Syndrome in 2016 close to a decade after its emergence. The team of scientists in Texas wanted to test the vaccine to healthy humans but lacked adequate resources to finance the activity. This was because local governments and the general public had generally ignored the risk of another global outbreak yet the previous outbreak in 2003 had killed 774 people globally (Gourinchas, 2020). After the loss of interest to look for a vaccine during the time, medical research organizations lost the opportunity to study the virus and learn more about the disease, and this knowledge would be used to help to tackle the coronavirus that has emerged in 2019. Vaccine or treatment would therefore greatly help in flattening the virus's curve and in improving global economies again.

References

Athey, S, M Kremer, C Snyder, and A Tabarrok (2020), "In the Race for a Coronavirus Vaccine, We Must Go Big. Big", New York Times, 4 May.

Baldwin, R, and B Weder di Mauro (2020), Economics in the Time of COVID-19, a VoxEU.org eBook, CEPR Press.

Gourinchas, P-O (2020), “Flattening the pandemic and recession curves,” in R Baldwin and B Weder di Mauro (eds), Mitigating the COVID Economic Crisis: Act Fast and Do Whatever It Takes, a VoxEU.org eBook, CEPR Press.