The world must quickly prepare itself for a major crisis. The World Health Organisation (WHO) has all but declared the Coronavirus (Covid -19) as an international emergency. At the time of writing, the Lancet’s online dashboard has reported 86,983 cases and 2,978 deaths across more than 60 countries. Looking at the spread and number of fatalities and cases that are being notified globally, Covid-19 is definitely close to being declared a pandemic.
When does an epidemic become a pandemic? An epidemic is the sudden rise in the number of cases of a disease or infection, usually limited in its geographical reach. For instance, the Ebola virus epidemic in 2013 resulted in the death of over 11,000 people, but it was largely restricted to Western Africa. A pandemic, in contrast, is an epidemic that has spread over many continents and countries, and does not rely on local transmission anymore for the spread of the infection.
It is just a matter of time before coronavirus will hit India—it is a matter of where and when. It goes without saying that India needs to be very well prepared. There is no need for alarm, but no need for complacency either. The bad news, according to a senior health expert formerly with the WHO who spoke on the condition of anonymity, is that India seems to be “blissfully unaware and firmly complacent”. There is no certainty that the threat will subside in warmer temperatures. For a new pathogen, against which immunity hasn’t yet developed, it is, as always, far better to be safe and well prepared, without creating unnecessary panic.
There are two kinds of impacts that we need to be worried about. There is, of course, the crucial issue of how India’s public health institutions are able to tackle the problem. The second is the obvious impact on India’s economy and global trade. The next few weeks will determine whether all the efforts that are being undertaken can prevent Covid-19 from becoming the “black swan event” that statistician Nicholas Taleb had first used to describe 9/11. Can it derail the global economy?
The economic fallout
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Covid-19 will cost the world economy over $280 billion in the first quarter of this year alone, which means that global GDP will not grow from one quarter to the next for the first time since 2009. China’s growth is expected to slow to 4.5% over the same period. Japan is also watching the situation anxiously as the Olympics scheduled this summer can suffer if the threat does not go away quickly.
More than 5 million companies worldwide have Chinese suppliers and all of them are under threat from slashed manufacturing capacity. Supplies from China will stop as soon as the assembly lines cease or decrease production. The impact is now being felt across the world and across various sectors of the economy.
The manufacturing space has been the worst affected. Electronics and furniture are the two sectors that source nearly two-thirds of their imports from China. The auto sector has already been badly hit with Hyundai and Nissan closing down a few of their plants in Korea and Japan, respectively, as supplies from China have stopped. Smartphones, optical fibre cables and integrated chips (the three items that China specializes in) have all been badly hit and downstream industries that depend on Chinese imports across the world will now have disrupted production schedules.
And then, there’s the freeze on the movement of people. With 50 countries banning travel from China, the situation is getting worse by the day. The Chinese are also the world’s most prolific tourists now. Countries like Thailand and Indonesia depend on tourism, with nearly one-fourth of their tourists coming from China. Thailand, therefore, has not restricted Chinese tourists yet and neither has it stopped issuing free visas on arrival to tourists from there. Cambodia too has been careful, and in fact, the President even travelled to China to demonstrate loyalty to a country that is its largest foreign investor.
However, with the fear spreading, this will not continue for long. US firms like Apple have stopped flying their executives to China.
Source: livemint
