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Context: Post COVID-19 World.
As COVID-19 spreads exponentially across the world, uncertainty and extreme volatility are creating havoc that has never seen before. The wisest thing is to start thinking about whats next, i.e. post COVID-19.
This brings us to the questions of post COVID-19 World. In this article, we will explain the following below:
- What were the hardships that the world was already facing?
- What will be the impacts of COVID-19 on the world?
- What would be expected development of COVID-19 in India?
- How is India standing out in the crisis?
What were the hardships that the world was already facing?
- Technological advancements: The world was already having to contend with an uncertain economic environment, with industries in turn facing newer challenges such as having to adjust to a shift from cost efficiencies to innovation and breakthrough improvements.
- Global Slowdown: The International Monetary Fund (IMF) warned of an economic slowdown in 2019 in 90 per cent of the world. Global economy was said to be in ‘synchronized slowdown’.
- Increasing political and policy uncertainties: World Economic Outlook report of IMF points out that political uncertainties “add downside risk to global investment and growth. These include policy uncertainty about the agenda of new administrations or surrounding elections, geo-political conflict in the Middle East, and tensions in east Asia”. The World Uncertainty Index (WUI) latest data shows a sharp increase in global uncertainty in the first quarter of 2019.
- Changing environmental norms: In 2019, the UN warned that if the damage to the climate is not reversed by 2030 it will be too late. Thus, around the world, a raft of new legislation to help protect the environment has just come into force. Even INDCs were being implemented by the countries to fulfill Paris Agreement provisions.
What will be the impacts of COVID-19 on the world?
- China cease to be the world’s biggest exporter of manufactured goods. There is no country in the world to replace its position. The economic slowdown in China, as a result of COVID-19 pandemic, will precipitate a further economic downturn internationally.
- Uncertainty, panic and lockdown policies are expected to cause demand worldwide to decline in a precipitous way. This will inevitably lead to a vicious downward cycle, where companies close down, resulting in more lay-offs and a further drop in consumption. A steep decline in GDP would follow.
- Stock markets have reflected the economic alarm. The S&P 500 in the United States fell more than 4% this week as investors braced for worse conditions ahead.
- according to the United Nations Conference on Trade and Development (UNCTAD), globally, foreign direct investment (FDI) is on track to decline by 40% this year. This threatens “lasting damage to global production networks and supply chains.
- COVID-19 is expected to bring about major changes in the global order.
- As of now, though the U.S. is no longer the global power that it once was, it is hardly in retreat. USA’s retreat from Afghanistan after a dubious accord with the Afghan Taliban is one of the evidence of declining power.
- Given that the U.S. is among the countries badly affected by COVID-19 pandemic, together with existing uncertainties affecting its financial markets, the U.S. can be expected to step back even further.
- China and Russia have strengthened their relationship and improved their asymmetric capabilities. With China becoming the largest economy in the world in PPP terms (Purchasing power parity) and Russia becoming far more economically and politically stable and an important power broker in West Asia, will have a direct impact on the liberal international order.
- Psychologists are warning of an ‘epidemic of despair’ arising from a fear of unknown causes, resulting in serious anxiety and mental problems.
- Extended isolation, according to psychologists, can trigger a different kind of pandemic even leading to possible suicidal tendencies, fits of anger, depression, alcoholism and eccentric behavioural patterns.
- The current inequalities among population is already high, the pandemic will impact further on the income inequalities.
- The loss of jobs in India is already witnessing the burnt as seen in the migrants crisis post lockdown announcement.
What would be expected development of COVID-19 in India?
- An early estimate by the Asian Development Bank, soon after the epidemic was declared, was that it would cost the Indian economy $29.9 billion. However, a recent industry estimate pegs the cost of the lockdown at around $120 billion or 4% of India’s GDP.
- The Confederation of Indian Industry (CII) had at one point warned that the COVID-19 impact, and the existing stress in the financial sector, meant that India would require up to six months even after the entire course of the COVID-19 epidemic is over to restore normalcy and business continuity.
- The key to India’s continued success will lie in ensuring transparency in coping with the unfolding crisis and mitigating any attempts at misinformation that could prove deadly to India’s pushback efforts. As the COVID-19 pandemic unfolds, India needs to remain vigilant.
How is India standing out in the crisis?
- India has enforced a nationwide 21 day lockdown and undertaken evacuation of more than 1400 of its citizens and those of its neighbours from high-risk countries, including China, Japan, Iran and Italy.
- Prime Minister Narendra Modi has led public awareness campaigns to make people more vigilant in the pushback against the outbreak.
- In keeping with India’s ‘Neighbourhood First’ policy, India has shown leadership in mobilising the heads of government of the South Asian Association for Regional Cooperation (SAARC) and that of the G20 to share reliable information, best practices and support each other in fighting this pandemic.
- China sought India’s support to counter the US bid to lay COVID-19 blame on its door a few days before the G20 meeting. Also, the Chinese have been deeply appreciative of India’s gesture of sending 15 tons of medical supplies to Beijing when it was still reeling under the crisis.
- India has dispatched doctors to the Maldives and Nepal and has offered supplies to Afghanistan, Bangladesh, Bhutan, Sri Lanka and Italy.
There are no winners in tragedies but stories of survival, hope and empathy that are retold and remembered in the aftermath. Even as we struggle to fortify responses to the unprecedented crises that the COVID-19 pandemic has unleashed globally, attempts are being made to reframe and deflect attention as to the causes and effects of this global pandemic.
In a world where disruptions had become the new normal, the COVID-19 pandemic has created an irreversible systemic shock, creating new geo-political fault-lines and opportunities. New Delhi must calibrate its responses as Beijing tries to repair its tarnished image, especially along the BRI corridor, and continues its efforts to infuse the dominant global power structure with Chinese characteristics. As Jospeh Nye reminds us, ‘power sometimes depends on whose army or economy wins, but it can also depend on whose story wins’.