"This is a health crisis and an economic crisis. It is a crisis of inequality and a crisis of trade."
The virus outbreak, Covid-19, reveals that infectious diseases spread easily due to open economies and easily threaten nations and destabilize the world economies. Previous infections such as Black Death, SARS, Influenza H1N1, and Swine Flu had caused similar economic impacts worldwide. Covid-19 is more contagious, and its ability to sustain and control has appeared to be more challenging for the states. It is considered more contagious than influenza and swine flu as it transmits between people easily. This widespread infective virus has caused millions of tragic deaths and damage to the economy. It is estimated that the impact of COVID-19 is $ 10 Trillion, the largest economic shock the world has experienced in decades. The severe economic crisis has led to 200 million people in extreme poverty. Moreover, emerging markets and developing countries face challenges to strengthen their economy and achieve sustainable development.
The deep recessions triggered by the pandemic are expected to leave lasting scars globally; the book World War III Corona, written by Dr. Sam-Swapn Sinha, a California-based professor, coach, and entrepreneur, explains the greatest issue of our time and its impact on the economies. The book delves deep into the virus's economic, social, and geopolitical implications that eventually created a global recession, causing skyrocketing death tolls and crushing the international economy and trade.
Impact on Economy and Financial Markets
With an increase in a global pandemic, employers and employees have started worrying about their businesses and jobs. Investors are concerned about their money invested in companies. Consequently, the economies around the world have experienced an economic decline like the great depression of the 1930s. Emerging market and developing economies have suffered huge losses such as weak health care systems, loss of trade and tourism, subtle capital flows, and tight financial conditions amid mounting debt. Trade and exports of industrial commodities have slowed down.
Moreover, an unprecedented collapse in oil demand and a crash in oil prices have been observed. As a result, demand for metals and transport-related commodities such as rubber and platinum used for vehicle parts has also dropped. At the same time, agriculture markets are also affected globally due to trade restrictions and supply chain disruptions. Consequently, it has raised food security issues as well.
Corporate bond markets and money market funds also experienced acute stress. The financial markets rebounded quickly. Still, these patterns led many to wonder about a possible disconnection between financial markets and the real economy. Most companies already have business continuity plans, but they are not fully addressing them due to the fast-moving and unknown variables of the virus that continues to pose challenges for the business to survive. Communication is a key part of effective crisis management. For banks and capital markets firms, this is heightened as trust and reputation are integral to what they offer to the clients.
Moreover, clients, whether retail, commercial, corporate, or institutional, want reassurance that their financial institutions are strong and stable. Similarly, the management of the company desire to know that boards are engaged, capital and liquidity standards are appropriate, and risk management is effective. Finally, employees need to know about their safety and how their jobs may change.
To prevent global pandemics, the business and financial markets are practicing the prevention strategies such as following COVID-19 SOPs; wearing masks, hand washing, and maintaining social distance. However, following SOP leads to a decline in daily business, especially in the informal retail and wholesale markets, thus leading to numerous business closures and unprecedented job losses.
The book World War III Corona provides a practical approach to dealing with the challenges, allowing the leaders to understand what direction they are heading in and how to plan and calculate future risks.
"Around the world, there is a growing global consensus that we must think boldly. This is our chance to build back societies that are fairer and economics that are more resilient. "As we are called to meet the challenges and the opportunities of this pandemic, we have a chance to build something new. So, let's build it together."
How Can Economies Flourish After Pandemic
Dr. Sinha has done an admirable job in giving helpful suggestions to deal with the Corona crisis. The book attempts to provide an answer by illustrating some positive strategies to meet global crisis management Governments are actively managing outbreaks, aiming to return to normalcy. Economic recovery is central to their forward-looking agenda.
- Companies should communicate regularly and honestly with their clients to update their approach. Let the clients know how the company addresses the risks and crises and takes initiatives to maintain capital levels, appropriate review, supervision, and surveillance, and protect cyber security.
- Increasing investment by providing direct capital injections through investments, loans, and grants. Injecting capital into the banking system to spur investment and improve public-private partnership structures.
- Encouraging innovation by developing industries, academia, design, and development agencies. Moreover, facilitate upskilling and reskilling programs to enhance managerial skills, digital and industry expertise.
- Nations need to deepen cooperation with different parts of the world. This gives them a global vision and develops the ability to look for the opportunities, advantages, and challenges being renewed around the world.