A short-term phenomenon for three basic reasons
THE ECONOMIC AND SOCIAL IMPACT OF COVID-19 OUTBREAK:
19 hours ago The corona virus disease 2019 (COV-ID-19) has spread from Wuhan in Hubei Province, China to countries across the world. This is a clear testimony to the fact that we live in a highly interconnected world. This disconnectedness manifests itself in a number of ways ranging from politics, economy, to culture.
This globalization phenomenon, which in the recent past has deepened and broadened with unprecedented speed, has been propelled by a number of factors including improved technology in transportation and telecommunication, movement of people and capital, diffusion of know-edge, etc.
I would like at the outset commend and congratulate the Chinese leadership and its people for the efforts being under-taken so far to fight the virus. Indeed, we have seen over 41,000 healthcare workers in 330 plus medical teams converging in Hubei, the hardest hit province, from across the nation to support epidemic control. Further, we witnessed several thousand engineers and construction workers building the two specialized hospitals, equipped with 2,600 beds.
More-over, according to government sources, these measures are paying off since the number of daily confirmed cases, outside Hubei, have fallen from a peak of 890 on 3 February, to only 3 on 29 February, and the situation in Hubei and Wuhan has been brought under control. This shows clearly that the epidemic is controllable.
The above commitments and determination displayed by the Chinese Government notwithstanding, there are negative economic and social effects that will be experienced by countries which are dependent on China. With regard to which channel the impact of the virus will have obvious negative effects, the answer is very clear: on trade and people-to-people exchanges.
This means there will be decrease of both imports and exports. This will in turn translate into reduced personal incomes, decrease in government revenues, and increased inflation rates, triggered by scarcity of imported commodities.
The virus will impact negatively on people-to-people exchanges, especially on business people and tourists. Some airlines, such as Kenya Airways, have suspended its flights to and from China. Such measures have negative effects not only on the tourist sector but also on the airline industry. For example, Kenya Airways has already recorded a loss of over USD 8 million.
In spite of the bad side of the virus on countries’ economies, there is good news: these negative effects are short-term and would not […]
