How far the contagion has touched the economy?

Abstract; With the number of people infected with the contagion rocketing at an unprecedented rate
daily almost all the leading economies of the world including the USA; the hub of world economy and
trade have halted their economic and production activities which in turn has resulted in a recession like
situation in the world. All the international organizations including Asian development Bank and IMF are
becoming helpless while providing funds and loans to the poor countries. It's almost a challenge for all
the nations to rebuild their impaired economy post COVID-19 as the magnitude of damage can’t be
gauged at one go.

Reviving and reviewing the world economy; Though originally generated at the wet market of Wuhan,
China no country is spared from the virus even the impregnable areas are not spared. All the countries
are running out of resources to deal with the ongoing lockdown; the only way of curbing the number of
infections backed by the virus. Even the USA is not spared from the recession. Many experts predict that
the post COVID-19 USA economy will witness contraction in GDP analogous to the Great depression of
1930s. Apart from this it is estimated that more than 100 countries have asked for help to the IMF as
their key source of revenue including tourism and exim policy is unfavourably impacted by this
contagion. Currently every country be it capitalist or welfare state model or communist is focusing on
expenditure on stimulus packages to deal with the pandemic. With increased expenditure in one hand
and stop in business activities in the other many countries are on the verge of facing recession.
According to the UN, the pandemic is expected to wipe out $8.5 trillion in global output and could send
130 million people into the ranks of extreme poverty. So, inevitably resilience post COVID-19 is a
difficult task to deal with for any economy. Behind this economic recession there is a handful of political
aspirants that also hamper the global economy. China's wolf warrior diplomacy is no exception. In this
crisis ridden time all the leading diplomats and the leaders must take efforts to make a balance between
globalized economy and domestic economy along with safety measures for dealing with the permeation
of the contagion as each country doesn't produce what is consumes and each country doesn't consume
what it produces. The focal point of production activities must be shifted from durable goods to
perishable goods including food items and other agricultural activities.

Reviving and reviewing the domestic economy; Neither all the countries are hit by the virus uniformly
nor are they equivalent in their resources. So, the method of doing away with the contagion varies from
country to country. The countries that earn the most from tourism see a sharp fall in revenue resulting
in contraction of GDP. India ranked 3rd among 185 countries in terms of travel and tourism's total
contribution to GDP in 2018. Along with the collapse of tourism other unfavourable impacts of this
lockdown backed by the contagion include breakdown of hospitality industry, decrease in govt income,
unprecedented unemployment rate, etc. According to estimate the unemployment rate has soared by
almost 20% in a month due to the collapse of all industrial and economic activities. In another stance
due to lockdown almost 14crore have lost employment sine die. However, being a welfare state model
govt India needs to liquidate more funds from the public purse for the living of the disadvantaged
people. Recently the govt announced a stimulus package of 20 lakh crore (including the previously
declared 1.7 lakh crore and the RBI's announcement) for feeding the needy and dealing with the migrant
issues. However, the focal point of govt's stimulus package must include a large chunk of migrant and
unorganized workers who ran out of their jobs. Along with this the govt must ensure that those who are
out of their work currently due to lockdown are not retrenched by their employees. Otherwise it will
reckon for a boycott of labour by the workers to resolve their issues post COVID-19. Providing direct
cash to the bank account of the poor may enable them to buy their edibles instantaneously. Along with
the stimulus packages the govt must allow the MSMEs and other young startups to resume their
business activities.
Rashmita Nanda, 18th May 2020