Analysis by Rhea Haddad, Staff Writer

April 1st, 2020

As the coronavirus continues its march around the world, governments have turned to effective public health measures, such as social distancing, to physically prevent the contagion. Yet, doing so has cut off the flow of goods and people, hindered economies, and is in the process of delivering a global recession. Economic contagion is now spreading as fast as the disease itself.

Taking China’s experience to heart, governments across Asia, Europe, and North America are mostly taking a staggered approach to COVID-19, with each step having different consequences on local economies.

Over the past few weeks, more than 700,000 people around the globe have been infected by the coronavirus. Losses in the international economy have increased after the closure of factories, commercial enterprises, airlines and airports in most countries. This caused a lot of people to lose their jobs. Estimates for initial unemployment claims in the U.S. were around 1.6 million this week, but the figure came in at 3.28 million — a historically unprecedented figure, about five times greater than the largest weekly increase in the global financial crisis of 2008.

Banks and governments were forced to help employers. Besides of this, the United Nations claimed that unemployment could affect 25 million people all around the world in this economic instability. Roberto Azevedo, the General Director of the World Trade Organization claims that “this pandemic will inevitably have an enormous impact on the economy” and that “the coronavirus downturn will be worse than 2008”. 

COVID-19 has exposed the fragility of the wealthiest and most influential countries in the world. The U.S. counts more than 150,000 cases as of March 30, accounting for about 20% of global cases. This super-power was not equipped for such a pandemic and lacks the requisite means; there is a shortage of epidemic medical uniforms, so doctors were forced to wear plastic bags instead. The demand for unemployment subsidies reached 3 million USD, a record amount compared to the 695,000 USD grant demand in 1982.

Similarly, the European Union has not been able to reach a general agreement on the war against coronavirus. The lack of unity amongst the members emerged as strong countries failed to assist Italy at the height of the pandemic.

The core pillars of the economic system is the human being and his ethics. Since the beginning of the new millennium, man has become alienated from his values and international capitalism has become dominant and resulted in even greater disparities between people. 

The largest economies in the world are the U.S., the E.U., China and Brazil. Today, these economies are undergoing drastic declines in world markets, and funding from governments and central banks would be available only for a limited period which might not be sufficient until the vaccine is released. 

Therefore, and as described in the latest issue of The Economist, we are witnessing a “brutal recession” leading surely to a depression in the world economy. The coronavirus was such an assessment which unveiled the weaknesses of the international economic system. Human beings have forgotten their vulnerability when facing nature and their way of consumption has become blind and unethical. We are in a crucial time that threatens civilization, and a new man must be reborn from the ashes of the COVID-19.