Question

How COVID-19 has damaged international trade? Discuss in details

Answer 1

COVID-19 is a global humanitarian issue. The virus continues to spread around the world, putting health services under immense stress in the fight to save lives. The human scale of this catastrophe is likely to escalate as the epidemic spreads to lower-income countries with poorer healthcare systems.

While economists and policymakers equate the current economic downturn with the global depression and the 2009 financial crisis, the harm done by the COVID 19 pandemic is much greater and of a specific nature. But even during the great depression of the 1930's, the banks were not short of resources and the economic engine was in a good shape. But it's not the case this time around. Trade was already shaking in 2019, well before the virus struck, due to trade disputes between various countries and slowing economic development. Moreover, transport and transportation are now directly impacted in ways that were not the case ten years ago during the financial crisis.

Big economic forces in the world, such as the US, China, the UK, Germany , Italy , France, Japan, and many other developing economies, such as India, are on the verge of collapse. Crude oil prices have dropped off the edge, and the OECD has proposed that global growth could be reduced by half to 1.5 per cent in 2020 if the virus continues to spread. For development, the planet needs human labor, and half of the globe is currently locked up for an unspecified period of time, which would have a major effect on the economy and trade in general.

In Asia, policymakers reacted rapidly with vigorous spending to support the medical response and distressed households and businesses. And central banks have taken decisive action to boost liquidity. Nevertheless, the country is already facing its worst economic nightmare. Since the start of the pandemic, the area has been subject to strict locking criteria. Transportation and transport have been banned, the area has lost its big income from tourism, theaters and malls have been closed down indefinitely, and all other commercial activities have been halted. Governments are obligated to provide basic needs and health care to all their people.

The crisis is genuine, and we must recognize its dangerous face. The planet will recover only through collaboration and teamwork. All the countries of the world will work together to combat the pandemic and restore the global economy and trade. Tensions on trade between different countries should be released now for a better future. If the economy is allowed to fall into a depression, the cost of recovery would be mind-boggling. Therefore, all financial options open to the government, be they ways and means advances, overdrafts, bank bond loans, etc., must be restored in order to keep the economy alive.