The Coronavirus pandemic has affected the world in ways that we’ve not seen before. Tragic numbers of lives lost, global recession, and increasing uncertainty over jobs, travel, and even carrying out our day to day activities mean that it’s going to be a long time before life goes back the way it used to be before COVID-19 hit.
Much like global warming, the Coronavirus pandemic has highlighted a need for change, although in this case, it is a need for economic reform. The fact that so many countries have fallen into economic trouble, and in some cases, have hit the worst recessions on record, show us that what was being done before was not working.
But, as each country deals with the economic crisis this pandemic caused and attempts to get back on track, the bigger question is, what the global economic outlook post-COVID-19 in this changing world is? And what can be done to get it back on track?
Lockdown and the Economy
To understand what caused this global economic crisis, we first need to look at what actions were taken by governments to stop the spread of the virus.
Multiple countries had to go into lockdown, closing shops, restaurants, and swapping the office to work from home instead.
And as more people stayed safely indoors, the economy of each country took an almost immediate blow as cash flow decreased, adding up to one devastating hit for the global economy, which is currently estimated at around $12 trillion dollars.
This fall in economic income has lead to several countries going into recession. While the usual way of repairing this would be to encourage more and more spending in shops, restaurants, and in the travel and tourism industry, this isn’t conducive to stopping the spread of the disease.
Let’s also remember that Coronavirus is now a disease that exists, and although ‘R’ rates remain low in certain countries, the risk of contracting the virus still exists without any immediate global vaccination available.
With that in mind, the entire world needs to start thinking a little more imaginatively about the global economy and making changes wherever possible to prevent this situation from occurring again.
Whilst that might seem impossible, the very idea of lockdown seemed impossible when it was first implemented, but we still took the forced change, and eventually, it turned out to be for the best. So, there’s no reason why the global economy cannot follow this example and make a change for the better.
Alternative Economic Futures
Predicting the possible outlook of the global economy after COVID-19 can take us down three different paths, each of which can lead to a growing economy but comes with its own issues as far as preventing another outbreak of the virus is concerned.
State Capitalism
The first of these is State Capitalism. This is currently the most commonly used approach to economics and is already implemented in many countries, including the United Kingdom, Spain, and Denmark.
Exchange value is the stimulus behind State Capitalism, with the basic principle of more money being spent, meaning more money being paid into the economy whilst also providing welfare to workers that fall ill or find themselves relieved of their duties.
However, State Capitalism may not be the best approach to building an economy in a world where Coronavirus exists. This is because social distancing will still need to be practiced for some time to come, which means a reduced amount of workers at any given time, and therefore a reduced ability to match increasing consumer demand safely.
Barbarism
This is not a situation we have seen yet thankfully, and it’s undoubtedly the worst of all possible scenarios. Barbarism relies on exchange value as a form of economic income, yet offers nothing in terms of supporting sick workers or those affected by unemployment.
Barbarism also sees the defunding of public services such as hospitals, leading to austerity and overwhelming these critical services beyond their capabilities. A global economy founded on Barbarism would be disastrous on many levels, and could even spark political unrest, leading to the collapse of state and welfare systems.
State Socialism
Based less around austerity and much more around protecting public services, State Socialism would be a significant shift in the way the global economy is currently run. In this instance, the State would make parts of the economy that are essential to living a priority and gives everyone equal access to housing and healthcare rather than relying on profit or the patterns of the market.
State Socialism would allow the economy to grow whilst ensuring that workers are well protected, as well as protecting the core functions of the economy. It’s not without its risks, though, the highest of which is authoritarianism. Still, it is the highest hope for growing back a strong economy while keeping workers safe and providing equal opportunities for everyone.
Investment
Regardless of which approach the regrowing global economy takes, it’s the reopening and support of businesses that will bring the money into it and allow it to start rebuilding.
As Javad Marandi explains, one of the best ways to help a business in these uncertain times is to invest in it so that it can put the necessary measures in place, make potential customers feel safe, increase sales and, in turn, increase employment.
This is the fundamental guiding principle behind growing an economy both nationally and globally and will help the world start healing after the impact that COVID-19 had on so many aspects of life.
Final Word
The harsh reality is that at this moment in time, nobody can truly predict how the outlook of the global economy will look once the worst of the COVID-19 pandemic has passed.
There are certainly different ways that it can be handled in order to grow back strongly and quickly, however extreme caution is going to need to be taken to find that fine line between recovering from economic collapse and ensuring the safety of the workers that will get it there.
