What is the Impact of Corona Virus on the Global Economy

Title: The impact of the coronavirus pandemic in our

global economy

INTRODUCTION:
Coronavirus is a large family of viruses causing illness in animals or humans.
Coronavirus is known to cause human respiratory infections ranging from the
common cold to more severe diseases such as Middle East respiratory syndrome
(MERS) and severe acute respiratory syndrome (SARS). The most recently
discovered coronavirus causes coronavirus disease (COVID-19), which was
unknown before the outbreak began in Wuhan, China, in December 2019 (Q&A on
coronaviruses (COVID-19) n.d.). It was declared a global pandemic on 11th March
2020. Even though the low fatality rate of COVID-19, it has killed more people
than SARS and MERS combined.

HOW COVID – 19 IMPACTED THE BUSINESS IDUSTRY

The impact of the Coronavirus Disease 2019 (COVID-19) pandemic on the
revenues of small businesses operating in industrial sectors and at the extent to
which these businesses changed or adjusted their business activity, or changed the
extent to which they utilized open innovation tools and implement innovation
promotion processes. The findings show that, despite COVID-19’s far-reaching
impact in all areas of life, the revenues of most small businesses in industrial sector
were not adversely affected by the pandemic, and most of them did not change or
adjust their business activities or the extent to which they employed open
innovation tools and engage in innovation promotion processes. The findings also
indicate that small businesses, most of whose revenues derive from subcontracting
work to other businesses business to business (B2B) and from long-term
agreements, are likely to cope better during periods of economic difficulty and
under conditions of economic uncertainty. The findings also show that businesses
that are active in the international markets have succeeded in adapting that activity
to the changing demands and various trade restrictions. This study’s theoretical
contribution lies in its focus on small businesses in the industrial sector and its
examination of how the subcontracting strategy and international operations help
such businesses contend with problems and conditions of economic uncertainty.
On the practical plane, the findings suggest that policymakers should foster
programmes that assist small businesses with these work strategies, which can help
them survive, enhance their stability and thereby also promote the economy’s
ability to withstand crisis situations (Harel, 2021).
2 Ways Business Owners Can Stay Optimistic as Pandemic Drags On

1 Keep Things in Perspective

If you’re still in business now, you have reason to remain optimistic. Things could
be worse. During the Great Recession (2008-2010), it’s estimated that 170,000
closed their doors. This is more than the typical 7.5% of businesses that shut each
year, regardless of economic conditions. During the pandemic, it’s estimated by
the Federal Reserve that 200,000 business “exited” (a polite term for closed
down), but this was a smaller percentage of businesses as compared with closures
in the Great Recession and the actual number of exits due to COVID-19 was fewer
than expected.

According to the Fed, the number of shutdowns varied considerably with industry.
For example, barber shops and nail salon shutdowns were higher than historical
averages. The Fed refers to this as “excess establishment exit,” which means that
of the 200,000 closures, only part were in excess of historic closure norms
(Weltman, 2021).

2. Work on Staying Positive

Some people are naturally optimistic and are always making lemonade out of
lemons. But many have to consciously work on staying positive. SelectHealth, a
not-for-profit health plan in Salt Lake City, has some suggestions on how to stay
optimistic during hard times. These include:

 Keep an open mind. With things continually in flux, don’t get stuck. Listen
to possibilities that may improve your situation.

 Allowing yourself to have bad days. It’s unlikely that you can maintain a
positive outlook 24/7. Things happen to disrupt your business and certain
affect how you feel. Just allow yourself to feel those things and then move
on.

 Making a list of things you can manage. While much of what happened

during the pandemic was out of your control, it’s helpful to remember that
there are always some things you can manage. Do what you can and don’t
focus on what’s out of your control.

Harvard Business Review had some other suggestions for staying positive during
difficult times:

 Be more mindful

 Share some kindness

 Practice gratitude
(Weltman, 2021)

How to Prevent Business Failure During Pandemic

Small businesses with good products and willing customers often fail for a
variety of reasons, mostly linked to poor management. Lack of business skills by
small-business owners lead to cash flow problems, poor marketing, quality
control issues and a host of other preventable problems. Understanding some of
the major reasons small businesses don't survive will help you create solutions to
small business failure and avoid closing your company.

Develop a Strong Business Plan

A famous quote goes, "If you fail to plan, you plan to fail." While no
entrepreneur goes into business planning to fail, many of them start off failing to
plan. A strong business plan is a vital outline for business success. This document
details the path by which a company intends to bring in its revenues. The SBA
provides resources for small business owners to develop their business plan
before they launch their efforts.

Avoid High Debt

Loans, credit cards and other forms of debt can be a double-edged sword for a
small business. Although most companies rely on some level of credit to get the
capital they need to launch, the downside of credit comes when the time to repay
the loans arrives. When a company spends most of its cash flow on repaying debt,
rather than expanding the customer base or adding employees, it lacks the
flexibility to keep up with the competition.

Make Accurate Projections

Many entrepreneurs are optimists by nature. They see that their ideas can change
the world and adapt a positive outlook toward their endeavors. However, this
optimism can also lead them to overestimate their potential revenues and
underestimate their future costs.

These unrealistic projections can lead business owners to make poor decisions
based on inaccurate data. The owners must take off the rose-colored glasses and
make accurate projections for both revenues and costs to keep their business
dreams alive (Contributor C. , 2021).

Impact of the coronavirus pandemic in our global economy

How does this pandemic affect the global economy?

COVID-19 is not only a global pandemic and public health crisis; it has also
severely affected the global economy and financial markets. Significant reductions
in income, a rise in unemployment, and disruptions in the transportation, service,
and manufacturing industries are among the consequences of the disease mitigation
measures that have been implemented in many countries. It has become clear that
most governments in the world underestimated the risks of rapid COVID-19 spread
and were mostly reactive in their crisis response. As disease outbreaks are not
likely to disappear in the near future, proactive international actions are required to
not only save lives but also protect economic prosperity.
(Jonathan Ling, Economic Consequences of the COVID-19 Outbreak: the Need for Epidemic
Preparedness, 2020).

Global economy effects of Covid-19

The COVID-19 viral pandemic is an unprecedented global phenomenon that is also
a highly personal experience with wide ranging effects. On September 20, 2021,
U.S. viral deaths surpassed the 675,446 total from the 1918 Spanish flu, the
previously worst US pandemic related death total on recond. The pandemic has
disrupted lives across all countries and communities and negatively affected global
economic growth in 2020 beyond anything experienced in nearly a century,
Estimates indicate the virus reduced global economic growth in 2020 to an
annualized rate of around 3.2%, with a recovery of 5.9% projected for 2021.
Global trade is estimated to have fallen by 5.3% in 2020, but is projected to grow
by 8.0% in 2021. According to a consensus of forecasts, the economic downturn in
2020 was not as negative as initially estimated, due in (Jonathan Ling, 2020) part
to the fiscal and monetary policies governments adopted in 2020 In most countries,
economic growth fell sharply in the second quarter of 2020, rebounded quickly in
the third quarter, and has been mostly positive since. Although lessening, the total
global economic effects continue to mount. In particular, the prolonged nature of
the health crisis is affecting the global economy beyond traditional measures with
potentially long-lasting and far reaching repercussions, Economic forecasts reflect
continuing ricks to a wastained global recovery posed by a resurgence of infectious
cases and potential inflationary pressures associated with pet-up consumer demand
fueled by an increase in personal savings. On the supply side. Shortages reflect
lingering disruptions to labor markets, production and supply chain bottlenecks,
disruptions in global energy markets, and shipping and transportation constraints
that are adding to inflationary pressures. As some developed economies start
recovering, central banks and national governments are weighing the impact and
timing of tapering off monetary and focal support as a result of concerns over
potential inflationary presures against the prospect of slowing the pace of the
recovery. These concerns are compounded by the emergence of new disease
variants and rolling pandemic hotspots that challenge national efforts to contain
infections and fully restore economic activities. Major advanced economies,
comprising 60% of global economic activity, are projected to operate below their
potential output level through at least 2024, which indicates lower national and
individual economic welfare relative to pre-pandemic levels. Compared with the
synchronized nature of the global economic slowdown in the first half of 2020, the
global economy has shown signs of a two-track recovery that began in the third
quarter of 2020 and has been marked by a nascent recovery in developed
economies where rates of vaccinations are high, but a slower pace of growth in
developing economies where vaccination rates are low. As a whole, developed
economies have made strides in vaccinating growing shares of their populations,
raising prospects of a sustained economic recovery in late 2021 and into 2022 and,
in turn, a recovery in the broader global economy. However, new variants of the
COVID-19 virus and a surge in diagnosed cases in large developing economies
and resistance to vaccinations among some populations in developed economies
raise questions about the speed and strength of an economic recovery over the near
term. A resurgence of infectious cases in Europe, Latin America, Russia, the
United States, Japan, Brazil, India, and across much of Africa renewed calls for
lockdowns and curfews and threatened to weaken or delay potential sustained
economic recovery into late 2021. The economic fallout from the pandemic has
had a disparate impact on certain sectors of the economy, particularly the service
sector, and certain population groups and could risk continued labor. Dislocations.
In some cases, workers are reconsidering their career choices and work patterns,
which may imply post pundemic economics marked by more varied labor
arrangements and altered urhan environments. The human costs in terms of lives
lost will permanently affect global economic growth in addition to the cost of
elevated.

Levels of poverty, lives upended, careers derailed, and increased social unrest.
Some estimates indicate that 65 million to 75 million people may have entered into
extreme poverty in 2020 with 80 million more undernourished compared to pre
pandemic levels. In addition, some estimates indicate that the decline in global
made in 2020 exacted an especially heavy economic toll on trade-dependent
developing and emerging economies. This report provides an overview of the
global economic costs to date and the response by governments and international
institutions to address these effects.

What should DOLE do to prevent unemployment due to covid-19

Amid the creeping impact of the COVID-19 epidemic on global trade and its
perceived impact on domestic economies, the labor department announced a
package of measures that would mitigate any potential threat the disease might
have on the country’s labor market. In a press briefing, Secretary Silvestre Bello III
said that the labor department is preparing a wide-ranging set of actions that would
prepare the labor sector from any impact from the epidemic. Bello
said that he has tasked all labor officials, both in the regional offices and those in
Philippine Overseas Labor Offices (POLO), to be on alert-footing to allow a quick
reporting system on worker displacements and pave the way for countermeasures.
He said the measures will include urging industry leaders to adopt “flexitime”
work arrangements for workers in industries that could be affected by an outbreak.
The labor secretary also said that DOLE is preparing to reposition some of the
department’s financial programs to sectors that might be affected by an outbreak of
COVID-19. He said assistance packages like the Adjustment Measures Program
(AMP), Tulong Panghanapbuhay sa ating Disadvantaged/Displaced Workers
Program (TUPAD), and Government Internship Program (GIP) will be
repositioned to help workers in industries that could be affected by the epidemic.
(GOVPH, 2020)
What is the impact of COVID-19 disease on agriculture

Although the COVID-19 epidemic is primarily a public health concern, the

necessary measures enacted to contain the spread of the virus, especially the
restrictions placed on the movement of people and goods, were likely to have a
significant impact on all levels of the agricultural market chain. The Food and
Agriculture Organization of the United Nations (FAO), International Fund for
Agricultural Development (IFAD), the World Food Program (WFP), and the
United Nations Children’s Fund (UNICEF) decided to conduct a rapid
assessment on the impact of the COVID-19 outbreak on food security and
nutrition. The results of the impact assessment was envisioned to inform key
government agencies in identifying the appropriate measures and programmes
that will ultimately help ensure food security for all, at all times.

Given the focus on food security, the team consisting of FAO, IFAD and the
Department of Agriculture (DA), concentrated first on the main population
centers of the country, which have the largest concentration of households,
namely: Metro Manila, Metro Cebu, Metro Davao.
Sites in BARMM, Marawi City and Basilan to represent internally displaced
population (IDP), and geographically isolated islands, respectively. The supply
of 16 site-specific fresh produce: rice, hogs, chicken, chicken eggs, bangus
(milkfish), galunggong (round scad), tilapia, eggplant, squash, tomato, cabbage,
carrot, potato, and banana (Lakatan), for all regions; and for BARMM: ampalaya
(bitter gourd) and cassava, were traced back from the demand areas to their
respective major trading hubs and supply areas. Secondary government data and
key informant interviews from a wide-array of respondents from the government,
and the private sector were used to establish the baseline conditions, and acquire
information on by the impact of the restrictions, feedback on policies, and
outlooks for the next months. Questions on gender and halal were also
incorporated (Rapid assessment of the impact of COVID-19 on food supply chains
in the Philippines, 2021).

How will the pandemic affect food production and demand globally
(especially of major food commodities)?

At the onset of the COVID-19 outbreak, there has been a significant increase in
demand. Production and demand vary across major food commodities. For
example, in spite of uncertainties posed by the pandemic, FAO's first forecasts for
the 2020/21 season point to a comfortable cereal supply and demand situation.
World total meat production, on the other hand, is forecast to fall by 1.7 percent in
2020, due to animal diseases, COVID-19-related market disruptions, and the
lingering effects of droughts. The COVID-19 pandemic will continue to heavily
affect seafood markets, particularly fresh products and popular restaurant species
this year. On the supply side, fishing fleets are laying idle and aquaculture
producers have drastically reduced stocking targets. The pandemic is set to
severely hit, in particular, global shrimp and salmon production. In India, for
example, farmed shrimp production is expected to fall by 30-40 percent. Also,
worldwide demand for both fresh and frozen shrimp is declining significantly,
whilst demand for salmon is expected to drop by at least by 15 percent in 2020.
Retail sales, in particular, of fresh salmon and trout have fallen greatly, and this
will not recover for some time. Overall, food markets will face many more months
of uncertainty due to COVID-19, but the agri-food sector is likely to show more
resilience to the pandemic crisis than other sectors.
(Food and Agriculture Organization of the United Nations, n.d.)