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COVID-19 Creates Growing Business Fears

With each passing day, the world has to accept the reality of the new Coronavirus or COVID-19 which comes with more uncertainties about the future. Nearly all aspects of life are being affected by the virus which has taken humanity off guard by creating not only health challenges, but more economic woes. Obviously, the high cost of healthcare and the death toll that is running into hundreds of thousands in just four months that the disease has lasted do constitute bitter realities to today’s world. Although most governments are obliged to cater for victims of COVID-19, imposing draconian restrictive measures that have been characterised by total lockdowns, confinements, social distancing and states of emergency have all contributed in sounding the death knell for the global economy. People are unable to go to work, companies are closing down, tourism has been brought to a halt, hotels left empty, small and medium-size enterprises forced to shut their doors, the informal business sector equally grounded as schools and universities across the world remain closed. The immediate consequence has been structural unemployment as people are bound to leave their jobs due to the closure of companies and the lack of need for their services. Most national frontiers have remained closed since March 2020 when the virus continued its spread from the original point of discovery in Wuhan in Wubei Province in China to other parts of the world, leaving behind massively devastating effects. The first disturbing signal came from the United States of America that closed its borders to all European countries for one month as from March. Many nations like South Africa, Italy, France, and so on followed with the cancellation of entry visas into their countries. The restrictions have led to a reduction in the level of trade among countries with business activities solely limited to the exchange of essential goods. Within the backdrop of the unprecedented health crisis, predictions by the World Trade Organisation (WTO) place a possible decline of 32 per cent in the global economy this year. Results of the WTO Trade Forecast Report for 2020 released on 10 April expect; “World trade to fall by between 13 per cent to 32 per cent this year as the COVID-19 pandemic disrupts normal economic activity and life around the world”. The experts further argue that the decline will likely surpass the slump caused by the global financial crisis of 2008-2009. With major economic blocs like America and Asia being the epicentres of the pandemic, the fallouts in other parts of the world cannot be farfetched. The United States is already talking of over 20 million unemployed citizens who are not sure for how long the situation will last given that the diseases is yet to show signs of abating. Some glimmer of hope being projected by those who think there might be economic take-off in 2021 is also tainted by the fact that the exact duration of the outbreak remains unknown. Now that the structures of economies in all countries will likely need major readjustments after the disease, the policy response will have to be highly pivotal in getting the world out of any recession that the COVID-19 will impose. Countries have isolated themselves with the most dramatic effects visible even within economic blocs like the European Union where exports, especially in some essential medical equipment have witnessed prohibitions of late. The extent of such panic could also be seen in the number of countries that imposed such commercial restrictions. A 23 March, 2020 report by Global Trade Alert stated that 54 countries imposed export control on some medical equipment, medicine or medical ingredients.

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