Quarantined economies: Lessons from Great Recession flourish

Dire projections are floating for the global economy as experts believe that the next quarter of 2020 may be the worst in generations. Pandemic's solution lies in social distancing but the global economy cries for a closer approach.

Hyderabad: The catastrophic spread of coronavirus pandemic has plunged the globe into an economic uncertainty by bringing giant manufactures and workers to a halt worldwide. The hard-hit businesses may take a longer time to recover but a decade back Great Recession resembles a successful path, united global response to overcome the fallout.

The aftershocks of corona quake have shaken the global economy drastically and the recovery lies in a consolidated approach.

Dire projections are floating as experts believe the next quarter of 2020 may be the worst quarter in generations.

A slowdown of the size being projected by the World Bank for such a critical part of the global economy would have severe effects for the rest of the world.

The World Bank said that it has not finished forecasts for other parts of the world but last week, International Monetary Fund Managing Director Kristalina Georgieva, said it is clear that the global economy has already entered a recession that could be as bad or worse than the slump after the 2008 financial crisis.

When the world economy was sinking in 2008, central banks globally had cut interest rates to overcome the slowdown and G-20 nations became a lead body for the united approach.

Beyond the coronavirus period, separating or limiting countries to itself from the global businesses may result in a devastating end.

World leaders are also required to avoid the trade weapon policy which nations use to hamper regional or strategic rival to overcome the financial drop.

The World Bank has also pledged to provide $14 billion in financial support through a fast-track package to strengthen the response of developing countries to the virus and expects to deploy up to $160 billion over the next 15 months to protect the poor and vulnerable.

The IMF has said that it will commit if needed its full $1 trillion in lending resources to support nations hit by the virus.

A country alone can't overcome the fallout as economies are inter-connected and limiting businesses for their own interests would hit the nation indirectly. Therefore, recovery calls for a global integrated response.