Essay: The Economic Impacts of COVID 19 on Global Economies

Economic Impacts of COVID 19
COVID 19 is a new strain of the coronaviruses family discovered in the town of Wuhan, China, in 2019. It is zoonotic; can be transmitted from an animal to a human. Among other discovered coronaviruses is SARS-CoV that was transmitted from a civet cat and MERS-CoV that originated from a camel in the Middle East. There is a possibility of the existence of other coronaviruses in animals not yet discovered (Qiu et al., 2020). COVID 19 has since spread from China to other parts of the world, Italy being the most hit region with more deaths than China. Most governments have shut their borders and restricted movement within their boundaries to help contain the pandemic. These countermeasures have significantly affected the economy (Weller, 2020). This paper seeks to investigate the effects of COVID 19 on the global economy.
Its spread has slowed human activity due to the deterioration of health and across all sectors of the economy. Limited movements have significantly affected the supply of various goods within the economy. The straining of the health care systems across the world has turned into an economic challenge. There have been reported cases of idle manufacturing plants due to infections among the workers. Ailing individuals tend to be non-productive. In addition, the mode by which the virus is spreading requires larger space between the workers hence reducing the volume of production across all manufacturing firms. Infected workers are required to undergo self-quarantine leading to the closure of most businesses (Qiu et al., 2020). To help solve this challenge, the government should provide sufficient diagnostic services as well as avail protective gear required to shield individuals from contracting the virus (Weller, 2020).
People have shifted the use of their resources from investing to buying essential products such as food and disinfectants and saving their money for future use. Consequently, the change in the expenditure trend has led to an increase in the demand for certain products such as food, sanitizers, and medical masks. The market cannot adequately meet the demand of the products leading to the increase in prices of the commonly used commodities (Qiu et al., 2020). The global stock market has experienced the worst drop since 1987. It has been influenced by the panic selling of the stock due to the pandemic. Dow Jones lost nearly 3000 points, which translates to 12.9% (Weller, 2020). Typically, the performance of an economy is influenced by the availability of labor and capital. These are the primary halters of the economy—the challenge can be solved by encouraging people to view the pandemic as a transition of the working environment. People should be encouraged to continue working from their homes to ensure that the economy does not fall beyond the current level (Anonym, 2015).
Closing of borders has partially and entirely killed the businesses that relied on importation and exportation of goods. For instance, the companies that relied on goods from countries that have reported cases of coronavirus do not have access to stock. These businesses may end up closing down (Qiu et al., 2020). On the other hand, manufacturing firms in countries that have reported positive coronavirus cases may lose their markets as containments from their countries are no allowed to other countries. Different business sectors that have been severely affected by the crisis are the logistics and tourism sectors. Tourism and recreational sites have been shut down amid the outbreak to help contain the spread of the virus. Besides, there are few travel destinations left for most of the airlines. More than half of the initial destinations have been affected by the illness rendering them inaccessible. The individuals working in these institutions are at risk of losing their jobs since the businesses may not manage to pay their salaries since they are non-operational. Most of these individuals are from low-income earners bracket and may not have sufficient savings to sustain them through the period (Qiu et al., 2020).
The government has the obligation of providing its citizens with basic needs they require to combat the pandemic. It can be made possible by subsidizing essential items or by fully covering the cost of the products. It can also shield the individuals by enacting policies that will help control the cost of products that may go up due to the demand and supply market forces—bailing out of institutions that are on the blink of complete closure to shield the individuals from loss of their income (Weller, 2020).
The uncertainty of the depth of the economic fallout is also causing the closure of businesses. A section of the companies still has enough customers to facilitate their continued operations. However, the panic mainly attributed to the spread of fake news across the globe is the cause of their closure (Weller, 2020). Individuals are also cutting down their spending, which has a direct effect on the businesses due to the uncertainty. The government can effectively handle this challenge by providing adequate information regarding the pandemic. Sufficient information will help to minimize the chances of the emergence of rumors relating to the pandemic. Laws should also be enacted to deal with individuals who are responsible for propagating the panic (Weller, 2020).
In conclusion, besides the adverse effects caused by the emergence of the virus, we have learned vital lessons. The pandemic has challenged most governments globally on their preparedness to handle a disaster. It has also emphasized the importance of encouraging and enabling internal manufacturing due to the adverse effects on businesses that rely on the importation of products. Also, it has proved the importance of openness in government institutions. The provision of adequate information has been found to be a preventive measure of the spread of fake news.