Hyderabad: The silent destruction caused by the COVID-19 pandemic, just like a fire spark in a cotton bale, is slowly engulfing livelihoods. Added to the misery of over 16 lakh COVID-19 cases with close to one lakh deaths worldwide, many countries are now facing economic collapse.
The International Monetary Fund (IMF) recently made it clear that expectations which were true three months back have now one topsy-turvy and the per capita income in 170 countries is falling down. A recent United Nations study also found that industries that provide a livelihood to 81 per cent (330 billion) of the world's workforce are partially or completely shut down.
The IMF warns that if the pandemic continues for long, the situation will be like falling from a hot pan directly into the fire. Oxfam -- a global company -- estimates that half of the world's population will fall into poverty by the time the COVID-19 situation subsides.
With industries shut down and job opportunities cut short, 70 million unemployed people are eagerly looking for unemployment benefits only in America -- a forewarning of the looming recession! The IMF’s foreshadowing of the catastrophe of the Great Depression of the 1930s is even more alarming.
The Spanish Flu that killed five million people
At the close of World War I, the Spanish Flu disaster had killed five million people and caused one of history’s greatest human tragedies. After ten years, the Great Depression, which followed the collapse of the US share market, has forced many countries to economic instability. Now the COVID-19 attack is throwing a great challenge to the lives and economic stability of all the continents.
A hundred countries have already closed their borders for the fear of its spread. With the collapse of international trade, which is dependent on imports and exports, the greatest sufferers are the developing countries. The G20 countries are already trying to woo domestic sectors with $ 5 trillion packages. Countries that do not have the same financial strength are awaiting international aid.
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The WTO, which expects global trade shrinking to 13 from 32 per cent this year, is afraid of the danger of the protectionist policies of the 1930s. If the request of the United Nations for a two-and-a-half trillion-dollar package for the developing countries is not agreed to, the poor people world over will be hit badly in the looming recession.
India's Strategy
The Reserve Bank's remark that COVID-19 is turning like a devil to humanity's future is literally true. Estimates that the pandemic will plunge the world economy by five trillion dollars annually, which is higher than Japan's gross domestic product, is heart-breaking.
In the wake of the fact that the troubles will not be over until the vaccine for COVID-19 is found, all countries are trying to help each other sustain progress and growth.
In addition to FICCI (Federation of Indian Chambers of Commerce and Industry), financial experts of the country believe that India needs to announce a bailout package of Rs 10 lakh crore. Studies have shown that India lost Rs 9 lakh crore due to a three-week lockdown.
At a time when a Rs four lakh crore package is vital for industries to take the country towards economic stability, India's strategy needs to be diversified. The government needs to sharpen policies to save people from the dreadful pandemic and ensure that the country's development is sustained.
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