ESSAY
INTRODUCTION
The over accelerated spread of covid-19 across the world has threatened millions of lives. After World Health Organisation (WHO) declared the covid-19 pandemic as an emergency in 2020, the world has started facing challenges in maintaining socio-economic conditions (World Health Organisation, 2022). The countries with high poverty rates, weak economic conditions and high unemployment rates have resulted in disruption in the global economy. The world has faced a sudden downfall in the global economy during a pandemic and created a substantial burden on the healthcare system.
SOCIO-ECONOMIC CRISIS DUE TO COVID-19
The pandemic caused due to the outbreak of the corona virus posed the deepest grave in the healthcare sector. Apart from taking millions of lives, covid-19 has severely affected the global economy market. The ongoing pandemic has shaken the roots of the economy with an increase in unemployment rates, reductions in income and productivity. Some of the implications of a covid-19 pandemic have been discussed below:-
INCREASE IN UNEMPLOYMENT- The infectious wave of covid-19 increased the rate of unemployment in many countries. According to the reports of the International Labour Organization, 81 million jobs were wiped out by the global covid-19 pandemic in 2020 (International Labour Organization, 2020). It is also concluded that most young people and women were prone to this unlikely unemployment strike.
It is also reported that with high unemployment rates, a decrease in average median salary has also been seen. Multi-national companies with a larger number of employees also had seen strikes in terms of salary (Blustein, et all., 2020).
The above bar graph shows a graphical representation of the unemployment rate varying with the age. This graph indicates that the youths of age group 15 to 24 years are mostly unemployed in the year 2020 rather than people above the age of 25. This graph also shows how women are mostly unemployed as compared to men in the year 2020.
Unemployment is the root cause of poverty in developing countries, and poverty brings a fall in the economy.
ACCOMMODATION PROBLEM OF REFUGEES AND MIGRANTS- The wave of covid-19 has made thousands of migrants and refugees homeless. Due to strict restrictions and regulations during the covid-19 lockdown, the problem of accommodation has been aroused for refugees and migrants (Koh, 2020).
They have been forced to live in restricted areas due to strict lockdown rules.
IMPACT ON STOCK MARKET- The global economy faces a huge market crash due to instability that appeared due to covid-19. 2020 Stock Market crash was happened due to the ongoing crisis of pandemics. It was labelled as "Black Monday 2020" due to a fall of 7.79% at that time. The pandemic caused the shutting down of many industries and businesses, thus creating uncertainty (Baker, et all., 2020). One of the characteristics of the stock market is the recession, but during the pandemic, it combined with the outbreak of virus create an inverted curve.
RECESSION IN THE MARKET- The global economy has faced the gravest recession by a margin of 5.2% since World War II. This was globally started around February 2020. The recession brought down the global economy and became the main reason for high unemployment rates across the world (Albanesi and Kim, 2021).
TRAVEL RESTRICTIONS- The travel and tourism industry stands as one of the major consumer-based industries which comprises 7% of the global trade. Due to the outbreak of the coronavirus, it is one of the major industries which got affected by the pandemic. The restricted lock-down brought down the GDP of tourism-based countries to the ground. The livelihood which depends on tourism faced negative impacts as countries posted new rules and regulations for the travellers. The mandatory quarantines, entry bans and other restrictions together decreased the business of the tourism industry (Liulov, et all., 2020).
INCREASED NEED FOR MEDICAL SUPPLIES- During the covid-19 pandemic, the expansion in the need for medical supplements has been increased to provide better healthcare facilities to the patients. From the business perspective, pandemics approved a positive impact on the pharmaceutical industries in expanding their business. It has been reported that the pharmaceutical industry witnessed a 200% growth in Foreign Direct Investment during the year 2020-21, followed by 53 % during April- September in the year 2021-22 (Gereffi, 2020).
DECREASED DEMAND FOR COMMODITIES AND MANUFACTURED PRODUCTS- The pandemic has provided a dramatic shock to the commodity industry, especially to the energy and metal commodity market, due to a decrease in its demand. Transportation commodities including crude oil witnessed an exponential decline.
STEPS TAKEN BY THE GOVERNMENT TO STIMULATE ECONOMIC GROWTH
One of the main issues that have been arising post-pandemic is the high unemployment rates. The youths had been wiped out from their career positions due to instability in the economic conditions of the country. To tackle the problem of unemployment, the government needs to build up new job opportunities for the youths. For instance, the Indian government has decided to spend Rs 1.97 lakh crore production-linked incentive (PLI) in more than 10 sectors to create new job opportunities for the youths.
Increasing investment in various sectors can be an effective method to stimulate growth in the industries that have been shut down by the pandemic. This can be done by direct loans, grants or equity investments.
The pandemic has opened doors to innovations. It has been reported that the world has witnessed new innovative start-ups during the covid-19 pandemic. For example, India witnessed 70% of the start-ups during the lockdown (Bindal, Gupta, and Dubey, 2018). Thus, initiating and helping new start-ups helps the economy of the country to grow. Start-ups are considered as the centre of economic growth. It helps in generating employment by creating new jobs and opportunities. Start-ups also boost the growth of the city they accommodate in. For example, Google transformed Mountain View in California. Similarly, Microsoft revolutionised Redmond. The development of cities further helps the economy to grow.
Economic stability is regaining its footing. The launch of new start-ups represents a significant milestone for the economy. There will be a slew of new start-ups in the next years that will aid the economy's growth and efficiency. The Covid-19 has taken a heavy toll, but the revolution in young minds that has resulted from the lockdown has had a good impact. They've been brimming with ideas and imagination to explore new things in their lives. The world has started witnessing start-up culture rapidly. The start-ups are upcoming “money-generating” engines of the countries after establishing their foots on the ground. They enhance the economy by providing employment to the people. Thus, more the people will be employed; more efficient will be the economy of the country.
CONCLUSION
The impact of a covid-19 pandemic on the global economy is going to stay for a while. The dramatic loss of human life led to unparalleled challenges worldwide. The countries are now starting to revert to gain economic stability. The social and economical disruption caused by the pandemic led to the large scale problem of poverty and existential threat. Along with taking away human resources, covid-19 has devastating effects on the business industries, especially leisure and hospitality businesses. The stock market has fallen to the lowest since World War II.
REFERENCES
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