Economy In The Lockdown

 Written by: Ashi Chaturvedi

Edited by: Yashi Shah

ECONOMIC DOWNTURN IN THE PANDEMIC

When the devastating virus entered China, no one had a clue what impact it would leave all over the world. When this Pandemic started to make a ‘globule' over the globe, the first impact that was recognized was citizens dying by just being in contact with any other infectious person. The countries then decided to impose lockdown, to avoid social gathering. 

Countries took this decision by analyzing all the economic effects. But, this calculative approach failed when the lifespan of the virus increased. The situation turned chaotic when the people who were losing their lives due to the virus began to lose their lives due to hunger. And this ended in a significant Economic Downturn.

By the arrival of the Financial Year 2020-2021 in May, the unemployment rate in India raised from 7.4% to 25.79%. G7 countries are known for their share in the Global Economy. But this invisible virus caused these countries to bow down on their knees. If we talk about the ‘Superpower’ US, the rate of unemployment has towered to 15%. However, the other G7 countries have been successful in protecting their manpower as the increase in this rate is not much higher compared to the United States of America. Japan has the lowest rate among all with 2.5%. 

However, having a low unemployment rate is not a big deal when the graph of revenue generation constantly declines. The Global Leaders have been quite futile to save their Gross Domestic Product (GDP). The US’s GDP shrank 31.7% with the largest quarterly decline since 1947. Following the US, the UK also had to face a shrinkage of 20.4%, France of 13.8%, Italy a 12.4%, Canada a 12%, Germany a 10.1%, and Japan a 7.8%. Remarkably, Japan has somehow endured standing still in this global ‘earthquake’. 

If G7 is in a ‘surviving’ state, what can you expect from countries which are known for their remote areas? The countries of South Africa are not only struggling with the rise of Corona patients every day but they have seen a forecast for a contraction of 7.2%. The national Debt-to-GDP ratio may breach 140%. On health grounds, Coronavirus is not the only problem, this country has the highest number of HIV patients. The expenses in the health sector are so critical that people are lacking in investment to develop their own ventures. South Africa had to take debt from IBF for the first time as well as had to lift the ban on alcohol. These two decisions are one of the toughest decisions taken by SA to date. 

What can you do if it is a question of survival? All the countries should learn a lesson from Japan and try to create a similar economic model that relies on manpower more than currency. We know that we shall overcome this disaster. All we need to do is to start working. Either by money or labour. Rise and progress. Because “Time only passes when you pass by Time”.