The COVID-19 pandemic, which has been ongoing for most of 2020, has had a significant impact on human life.Apart from infecting more than 10 million people and killing 1 Million people worldwide as of today as of this writing (28 October 2020), Initially in the pre-pandemic COVID-19, the world economy is projected to increase 0.4 percent to 3.3 percentin 2020 which was previously 2.9 percent in 2019. Then after the pandemic hit, world economic growth fell to -4.4 percent in 2020 as a result, the COVID-19 pandemic has devastated the global economy.The public health crisis due to the COVID-19 pandemic has led to an economic recession that has the potential to trigger a political and social crisis if not handled properly.
The economic recession caused by the COVID-19 pandemic was caused by many businesses closing or reducing their activities to avoid further transmission. As a result, the chain of economic activities such as production, distribution, and consumption is disrupted and results in an economic recession and the number of workers or employees being laid off to reduce production costs, this has resulted in high unemployment and low public consumption because people have to save their expenses considering that the majority have lost their jobs. due to termination of employment as the main source of income.
The impact of the economic recession due to the pandemic that hit all regional regions in the world, including Southeast Asia or ASEAN. Before the pandemic hit, the economy in ASEAN was predicted to grow by 4.7 percent based on an ADB report published in December 2019. Then when COVID-19 was declared a global pandemic, economic growth was only 1.0 percent. This is due to a large number of MSMEs (Small and Medium Enterprises) as the backbone of the economy in ASEAN. MSMEs are the largest contributor to the percentage of GDP and employment for each of its member countries. The results of research on six ASEAN member countries (Indonesia, Thailand, Singapore, Malaysia, and Brunei Darussalam) show that MSMEs contribute more than 50 percent of employment and contribute to GDP ranging from more than 30 to 50 percent per year. This shows how important the role of MSMEs is as the backbone of the economy in ASEAN.
MSMEs have limited capital and production capacity so that when the country experiences a recession due to a pandemic, MSMEs also reduce their production output because little or nothing buys their products. After all, consumers reduce their spending more to prioritize buying necessities, as a result, the profit margin is smaller and only can cover production and operational costs. To overcome this, MSME owners reduce their production output and lay off workers or employees which results in increased unemployment, owners will go out of business if these methods are not able to increase the margin of sales results with production costs. Termination of employment for MSME workers because their places of work are out of business or doing efficiency to reduce operational costs has contributed greatly to the high number of new unemployment, for example, the number of newly unemployed in Indonesia reached 9.77 million in August 2020, this number increased by 2.67 million people compared to the same period last year.
Many ASEAN member countries have realized how important the sustainability of MSMEs,and then strengthening their economic resilience because MSMEs contribute to GDP and large absorption of fields. Various short-term stimulus measures have been taken to save MSMEs amid a pandemic have been carried out by all member countries such as extension or postponement of tax reporting deadlines, direct financial assistance such as facilitating the provision of soft capital loans and providing wage subsidies or incentives for MSME employees and owners. Currently, the most important thing is implementing long-term structural steps to maintain the sustainability of MSMEs in the midst of implementing a new life order (new normal) that changes the lifestyle of the consumer community in the post-pandemic. Structural measures require collective effort for all ASEAN member countries because they change the overall structure of MSMEs to go hand in hand with changes in the lifestyle of the consumer society.
THE IMPORTANCE OF UMKM DIGITALIZATION FOR THE ECONOMY
Strengthening MSMEs cannot be separated from the implementation of SDG (Sustainable Development Goals) or Sustainable Development Goal 8 (eight), namely, promoting sustainable, inclusive economic growth and providing full and productive employment opportunities for all people. The presence of MSMEs expands economic goals, which is increasing the number of jobs. The addition of the number of new jobs by MSMEs provides benefits for the poor and vulnerable to get out of poverty and has an impact on increasing community income which brings success in achieving the first SDGs (eradicating poverty), second (ending hunger), fifth (gender equality), eighth itself, and ninth (increasing industrialization and sustainable innovation).
The results of research conducted by Mckinsey & Company suggest long-term steps that need to be taken by policymakers to prepare and encourage MSMEs to rise again. One of the long-term steps that need to be taken is to prepare MSMEs to implement digitalization in carrying out their economic activities again. This step needs to be taken because the COVID-19 pandemic has forced all businesses to close their physical facilities which are the center of their economic activity and online channels are the only way for MSMEs to survive amid limited physical activity to reduce the number of transmissions. The importance of digitalization for MSMEs to increase their income is evidenced by a survey from Mckinsey in 2018 showing 60 to 95 percent of digital income reaches 10 percent of all the largest corporate sectors. If MSMEs take into account a significant share of the region’s economic activity, this means that increased digital capabilities will also have an impact on increasing income.
The effort to digitize MSMEs to be able to adapt in the era of a new life order also faces many challenges. The challenges that must be faced in realizing digitalization include access to supporting infrastructures such as electricity supply, communication and information technology, and adequate internet access, which are very important in the effort to digitize MSMEs. Also, mastery of technology and information capabilities for human resources is something that needs to be considered because digitization and automation applied to all types of businesses including MSMEs can make many people lose their jobs, for ASEAN member countries there will be 878 thousand new unemployed in Malaysia; 4.5 million in the Philippines; 9.5 million in Indonesia; and 2.4 million people in Thailand. The solution to overcoming this problem is to facilitate new job skills training for job seekers and victims of layoffs (termination of employment) and increase funding and collaborate with companies engaged in technology and information to make this happen.
ASEAN STRATEGY IN DIGITALIZING MSMES IN SOUTHEAST ASIA
Increasing digital capabilities or digitizing MSMEs is also a major concern for ASEAN which was emphasized at the ASEAN + 3 Summit (China, Japan, and South Korea) and the ASEAN Economic Ministerial Meeting. At the 37th ASEAN Summit in Vietnam on November 12, 2020, all ASEAN member countries agreed to launch the ASEAN Comprehensive Recovery Framework (ACRF). The ACRF aims as a coordinated ASEAN strategy that focuses on restoring the critical sectors and vulnerable groups most affected by the pandemic and identifying what actions should be taken in line with regional and sectoral priorities. ASEAN’s attention to the importance of increasing digital capabilities or digitizing MSMEs is reflected in the fourth ACRF strategy which focuses on accelerating inclusive digital transformation and is included in key priorities, namely, providing an online platform and implementing policies related to enhancing digital capabilities. Not only that, improving connectivity is a key priority related to digitizing MSMEs by providing supporting infrastructure and an affordable internet network. Besides, the launch of the ACRF at the 37th ASEAN Summit is an implementation of the 16th SDG which emphasizes international cooperation and an institutional framework in realizing sustainable development. The highest political forum such as a high-level conference (Summit) is a forum that provides political leadership, collective guidance, and recommendations in realizing sustainable development.
To realizing the strategy in these key priorities, there are 3 (three) stages, namely reopening, recovery, and resilience. The reopening stage, namely ACCMSME (ASEAN Coordinating Committee of Micro, Small, and Medium Enterprise) as an agency in ASEAN that coordinates MSME empowerment agencies in ASEAN member countries, conducts in-depth assessments to identify challenges and policy recommendations to support awareness of technology adoption and relevant digital tools among MSMEs; And supporting the integration of MSMEs into global value chains, including establishing mechanisms to help MSMEs increase exports. The identification results report will be followed by policy recommendations for improving the digital capabilities of MSMEs for ASEAN member countries and special recommendations for less developed member countries such as Cambodia, Laos, Myanmar, and Vietnam (CLMV) to get assistance from the IAI (Initiative for ASEAN Integration).
In the recovery and resilient stages, ACCMSME will increase the amount and quality of relevant content in the ASEAN SME Academy. The ASEAN SME Academy is an online media portal for digital skills training for MSMEs launched by the US – ASEAN Business Council in collaboration with USAID (United States Agency for International Development) in March 2014. The ASEAN SME Academy aims to provide free training for MSMEs in ASEAN to improve access to financial products, global and regional markets, information services and business input, and technology and innovation. The training content and information in the ASEAN SME Academy are designed by Forbes 500 listed companies such as Google, Cisco, SAP, and HP. Currently, the ASEAN SME Academy is managed by ACCMSME and its presence will be more useful by improvising the amount and quality of content and translating the training content in it into local languages so that it can be accessed by all groups and target more users as the implementation of ACRF’s fourth strategy.
In addition to the improvised development of the ASEAN SME Academy, ACCMSME has also launched the ASEAN Go Digital program in June 2020. This program is a collaboration between ACCMSME and The Asia Foundation and Google. The main objective of this program is to improve information and communication technology capabilities for MSME owners to increase their productivity and individuals who do not have permanent jobs to participate in the digital economy and help senior stakeholders understand the potential of MSMEs in the digital era. The targets of this program are 200 thousand farmers, agricultural cooperatives, home handicraft producers, and owners of other traditional businesses, totaling 200 thousand people across ASEAN. In carrying out this program, ACCMSME has coordinated with its partners consisting of non-governmental organizations (NGOs) and government organizations in various ASEAN member countries. The Asia Foundation being the main partner of ACCMSME has a role to play in tailoring the training program so that it meets the needs of each country and suits the local context, and works closely with teams of local technology professionals and volunteers in providing training. Realizing the digitization of MSMEs requires adequate supporting information and communication technology infrastructure, namely the internet. Bearing in mind the low internet penetration in several ASEAN member countries such as Cambodia, Laos, and Myanmar, it has created inequality among member countries. To overcome this, ASEAN through the ASEAN Digital Senior Officials Meeting (ADGSOM) or the ASEAN Communication and Digital Ministers Meeting and the ASEAN Telecommunication Regulators Council (ATRC) or the ASEAN Telecommunication Regulatory Council will coordinate each of the telecommunications and digital ministries of member countries in implementing efforts to increase internet penetration in rural and remote areas with the new Universal Service Obligation framework (USO 2.0). Also, to ensure internet affordability for all, ADGSOM and ATRC have prepared a regional policy framework in providing transparent and affordable international roaming services.
Empowering MSMEs through increasing digital capabilities is an important priority for ASEAN in its efforts to restore the economies of member countries because MSMEs are the backbone for almost all ASEAN member countries. The impact of the COVID-19 pandemic, which has changed the way of life of all people around the world, has made MSMEs have to adapt to maintain their business continuity. Therefore, structural handling is needed in maintaining the continuity of MSMEs as the backbone of the economy, such as cooperation at the regional level such as ASEAN as a forum for cooperation and collective action for member countries in the Southeast Asia region. The policy framework that was launched based on consensus at the 37th ASEAN Summit became a guide for ASEAN agencies related to MSMEs (ACCMSME) and digital connectivity (ADGSOM and ATRC) in coordinating government agencies of each member country involved in increasing digital capacity and digital connectivity infrastructure who supports it. This shows that ASEAN has implemented the 16th SDG which emphasizes international cooperation in realizing development, namely increasing the digital capabilities of MSMEs which are closely related to SDG 8 which promotes inclusive economic growth, and MSMEs are a means of expanding employment opportunities for the poor which are closely related to growth. an economy that is inclusive or has an impact on the people.
How Bangladesh became Standout Star in South Asia Amidst Covid-19
Bangladesh, the shining model of development in South Asia, becomes everyone’s economic darling amidst Covid-19. The per capita income of Bangladesh in the fiscal year 2020-21 is higher than that of many neighbouring countries including India and Pakistan. Recently, Bangladesh has agreed to lend $200 million to debt-ridden Sri Lanka to bail out through currency swap. Bangladesh, once one of the most vulnerable economies, has now substantiated itself as the most successful economy of South Asia. How Bangladesh successfully managed Covid-19 and became top performing economy of South Asia?
In March 1971, Sheikh Mujibur Rahman declared their independence from richer and more powerful Pakistan. The country was born through war and famine. Shortly after the independence of Bangladesh, Henry Kissinger, then the U.S. national security advisor, derisively referred to the country as a “Basket Case of Misery.” But after fifty years, recently, Bangladesh’s Cabinet Secretary reported that per capita income has risen to $2,227. Pakistan’s per capita income, meanwhile, is $1,543. In 1971, Pakistan was 70% richer than Bangladesh; today, Bangladesh is 45% richer than Pakistan. Pakistani economist Abid Hasan, former World Bank Adviser, stated that “If Pakistan continues its dismal performance, it is in the realm of possibility that we could be seeking aid from Bangladesh in 2030,”. On the other hand, India, the economic superpower of South Asia, is also lagging behind Bangladesh in terms of per capita income worth of $1,947. This also elucidates that the economic decisions of Bangladesh are better than that of any other South Asian countries.
Bangladesh’s economic growth leans-on three pillars: exports competitiveness, social progress and fiscal prudence. Between 2011 and 2019, Bangladesh’s exports grew at 8.6% every year, compared to the world average of 0.4%. This godsend is substantially due to the country’s hard-hearted focus on products, such as apparel, in which it possesses a comparative advantage.
The variegated investment plans pursued by the Bangladesh government contributes to the escalation of the country’s per capita income. The government has attracted investments in education, health, connectivity and infrastructure both from home and abroad. As a long-term implication, investing in these sectors helped Bangladesh to facilitate space for businesses and created skilled manpower to run them swiftly. Meanwhile, the share of Bangladeshi women in the labor force has consistently grown, unlike in India and Pakistan, where it has decreased. And Bangladesh has maintained a public debt-to-GDP ratio between 30% and 40%. India and Pakistan will both emerge from the pandemic with public debt close to 90% of GDP.
Bangladesh’s economy and industry management strategy during Covid-19 is also worth mentioning here since the country till now has successfully protected its economy from impact of pandemic. At the outset of pandemic, lockdowns and restrictions hampered the country’s overall productivity for a while. To tackle the pandemic effect, Bangladesh introduced improvised monetary policy and fiscal stimuli to bring them under the safety net which lifted the situation from worsening. Government introduced stimulus package which is equivalent to 4.3 percent of total GDP and covers all necessary sectors such as industry, SMEs and agriculture. These packages are not only a one-time deal, new packages are also being announced in course of time. For instance, in January 2021, government announced two new packages for small and medium entrepreneurs and grass roots populations. Apart from economic interventions, the government also chose the path of targeted interventions. The government, after first wave, abandoned widespread lockdown and adopted the policy of targeted intervention which is found to be effective as it allows socio-economic activities to carry on under certain protocols and helps the industries to fight back against the pandemic effect.
Another pivotal key to success was the management of migrant labor force and keeping the domestic production active amidst the pandemic. According to KNOMAD report, amidst the Covid-19, Bangladesh’s remittance grew by 18.4 percent crossing 21 billion per annum inflow where many remittance dependent countries experienced negative growth rate. Because of the massive inflow of remittance, the Forex reserve of Bangladesh reached at 45.1 billion US dollar.
Bangladesh’s success in managing COVID19 and its economy has been reflected in a recent report “Bangladesh Development Update- Moving Forward: Connectivity and Logistics to strengthen Competitiveness,” published by World Bank. Bangladesh’s economy is showing nascent signs of recovery backed by a rebound in exports, strong remittance inflows, and the ongoing vaccination program. Through financial assistance to Sri Lanka and Covid relief aid to India, Bangladesh is showcasing its rise as an emerging superpower in South Asia. That is why Mihir Sharma, Director of Centre for Economy and Growth Programme at the Observer Research Foundation, wrote in an article at Bloomberg that, “Today, the country’s 160 million-plus people, packed into a fertile delta that’s more densely populated than the Vatican City, seem destined to be South Asia’s standout success”. Back in 2017, PwC (PricewaterhouseCoopers) report also predicted the same that Bangladesh will become the largest economy by 2030 and an economic powerhouse in South Asia. And this is how Bangladesh, a development paragon, offers lessons for the other struggling countries of world after 50 years of its independence.
Build Back Better World: An Alternative to the Belt and Road Initiative?
The G7 Summit is all the hype on the global diplomatic canvas. While the Biden-Putin talk is another awaited juncture of the Summit, the announcement of an initiative has wowed just as many whilst irked a few. The Group of Seven (G7) partners: the US, France, the UK, Canada, Italy, Japan, and Germany, launched a global infrastructure initiative to meet the colossal infrastructural needs of the low and middle-income countries. The Project – Build Back Better World (B3W) – is aimed to be a partnership between the most developed economies, namely the G7 members, to help narrow the estimated $40 trillion worth of infrastructure needed in the developing world. However, the project seems to be directed as a rival to China’s Belt and Road Initiative (BRI). Amidst sharp criticism posed against the People’s Republic during the Summit, the B3W initiative appears to be an alternative multi-lateral funding program to the BRI. Yet, the developing world is the least of the concerns for the optimistic model challenging the Asian giant.
While the B3W claims to be a highly cohesive initiative, the BRI has expanded beyond comprehension and would be extremely difficult to dethrone, even when some of the most lucrative economies of the world are joining heads to compete over the largely untapped potential of the region. Now let’s be fair and contest that neither the G7 nor China intends the welfare of the region over profiteering. However, China enjoys a headstart. The BRI was unveiled back in 2013 by president Xi Jinping. The initiative was projected as a transcontinental long-term policy and investment program aimed to consolidate infrastructural development and gear economic integration of the developing countries falling along the route of the historic Silk Road.
The highly sophisticated project is a long-envisioned dream of China’s Communist Party; operating on the premise of dominating the networks between the continents to establish unarguable sovereignty over the regional economic and policy decision-making. Referring to the official outline of the BRI issued by China’s National Development and Reform Commission (NDRC), the BRI drives to: “Promote the connectivity of Asian, European, and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road [Silk Road], set up all-dimensional, multi-tiered and composite connectivity networks and realize diversified, independent, balanced, and sustainable development in these countries”. The excerpt clearly amplifies the thought process and the main agenda of the BRI. On the other hand, the B3W simply stands as a superfluous rival to an already outgrowing program.
Initially known as One Belt One Road (OBOR), the BRI has since expanded in the infrastructural niche of the region, primarily including emerging markets like Pakistan, Bangladesh, and Sri Lanka. The standout feature of the BRI has been the mutually inclusive nature of the projects, that is, the BRI has been commandeering projects in many of the rival countries in the region yet the initiative manages to keep the projects running in parallel without any interference or impediment. With a loose hold on the governance whilst giving a free hand to the political and social realities of each specific country, the BRI program presents a perfect opportunity to jump the bandwagon and obtain funding for development projects without undergoing scrutiny and complications. With such attractive nature of the BRI, the program has significantly grown over the past decade, now hosting 71 countries as partners in the initiative. The BRI currently represents a third of the world’s GDP and approximately two-thirds of the world’s entire population.
Similar to BRI, the B3W aims to congregate cross-national and regional cooperation between the countries involved whilst facilitating the implementation of large-scale projects in the developing world. However, unlike China, the G7 has an array of problems that seem to override the overly optimistic assumption of B3W being the alternate stream to the BRI.
One major contention in the B3W model is the facile assumption that all 7 democracies have an identical policy with respect to China and would therefore react similarly to China’s policies and actions. While the perspective matches the objective of BRI to promote intergovernmental cooperation, the G7 economies are much more polar than the democracies partnered with China. It is rather simplistic to assume that the US and Japan would have a similar stance towards China’s policies, especially when the US has been in a tense trade war with China recently while Japan enjoyed a healthy economic relation with Xi’s regime. It would be a bold statement to conclude that the US and the UK would be more cohesively adjoined towards the B3W relative to the China-Pakistan cooperation towards the BRI. Even when we disregard the years-long partnership between the Asian duo, the newfound initiative would demand more out of the US than the rest of the countries since each country is aware of the tense relations and the underlying desperation that resulted in the B3W program to shape its way in the Summit.
Moreover, the B3W is timed in an era when Europe has seen its history being botched over the past year. Post-Brexit, Europe is exactly the polar opposite of the unified policy-making glorified in the B3W initiate. The European Union (EU), despite US reservations, recently signed an investment deal with China. A symbolic gesture against the role played by former US President Donald J. Trump to bolster the UK’s exit from the Union. As London tumbles into peril, it would rather join hands with China as opposed to the democrat-regime of the US to prevent isolation in the region. Despite US opposition, Germany – Europe’s largest economy – continues to place China as a key market for its Automobile industry. Such a divided partnership holds no threat to the BRI, especially when the partners are highly dependent on China’s market and couldn’t afford an affront to China’s long envisaged initiative.
Even if we assume a unified plan of action shared between the G7 countries, the B3W would fall short in attracting the key developing countries of the region. The main targets of the initiative would naturally be the most promising economies of Asia, namely India, Pakistan, or Bangladesh. However, the BRI has already encapsulated these countries: China-Pakistan Economic Corridor (CPEC) and Bangladesh-China-India-Myanmar Economic Corridor (BCIMEC) being two of the core 6 developmental corridors of BRI.
While both the participatory as well as the targeted democracies would be highly cautious in supporting the B3W over BRI, the newfound initiate lacks the basic tenets of a lasting project let alone standing rival to the likes of BRI. The B3W is aimed to be domestically funded through USAID, EXIM, and other similar programs. However, a project of such complex nature involves investments from diverse funding channels. The BRI, for example, tallies a total volume of roughly USD 4 to 8 trillion. However, the BRI is state-funded and therefore enjoys a variety of funding routes including BRI bond flotation. The B3W, however, simply falls short as up until recently, the large domestic firms and banks in the US have been pushed against by the Biden regime. An accurate example is the recent adjustment of the global corporate tax rate to a minimum of 15% to undercut the power of giants like Google and Amazon. Such strategies would make it impossible for the United States and its G7 counterparts to gain multiple channels of funding compared to the highly leveraged state-backed companies in China.
Furthermore, the B3W’s competitiveness dampens when conditionalities are brought into the picture. On paper, the B3W presents humane conditions including Human Rights preservation, Climate Change, Rule of Law, and Corruption prevention. In reality, however, the targeted countries are riddled with problems in all 4 categories. A straightforward question would be that why would the developing countries, already hard-pressed on funds, invest to improve on the 4 conditions posed by the B3W when they could easily continue to seek benefits from a no-strings-attached funding through BRI?
The B3W, despite being a highly lucrative and prosperous model, is idealistic if presented as a competition to the BRI. Simply because the G7, majorly the United States, elides the ground realities and averts its gaze from the labyrinth of complex relations shared with China. The only good that could be achieved is if the B3W manages to find its own unique identity in the region, separate from BRI in nature and not rivaling the scale of operation. While Biden has remained vocal to assuage the concerns regarding the B3W’s aim to target the trajectory of the BRI, the leaders have remained silent over the detailed operations of the model in the near future. For now, the B3W would await bipartisan approval in the United States as the remaining partners would develop their plan of action. Safe to say, for now, that the B3W won’t hold a candle to the BRI in the long-run but could create problems for the G7 members if it manages to irk China in the Short-run.
COVID-19: New Dynamics to the World’s Politico-Economic Structure
How ironic it is that a virus invisible from a naked human eye can manage to topple down the world and its dynamics. Breaking out of CoronaVirus, its spread across the globe and the diversity of consequences faced by the individual states all make it evident how the dynamics of the world could be reversed in months. Starting from the blame games regarding coronavirus to its geostrategic implications and the entire enigma between COVID-19 and politics, COVID-19 and economies have shaken the world. Whether it is the acclaimed super power, struggling powers or third world states or even individuals, the pandemic has unveiled the capability and credibility of all, especially in political and economic domains. Wearing masks in public, avoiding hand shake and maintaining distance from one another have emerged as ‘new normal’ in the social world of interaction.
Since the pandemic has locked its eyes upon the globe, world politics has taken an unfortunate drift. From the opportunities for leaders to abuse power during state of emergency (which is imposed in different states to limit the spread of novel Coronavirus) to the likelihood of rise of far-right nationalists to the emergence of ‘travel bubbles’ between states (such as New Zealand and Australia) and the increased chances of regionalism in post-pandemic world to the new terrorist strategies to gain support and many others, all are result of the pandemic’s impact on the political world, one way or the other. Since the end of WWII, the United States has taken the role of global leadership and after the Cold War, it became more prominent as it was the sole superpower of the world. Talking ideally, pandemics are perceived to bring up global cooperation but in the COVID-19 scenario it has started a whole new set of debates, sparkled nativism versus globalization and the sharp divide in global politics has drifted the focus from overcoming the global pandemic through global response to inward looking policies of leaders.
Covid-19 has impacted every sphere of life, be it social, political, health or economic. The pandemic itself being the result of a globalized world has affected globalization badly. It is the best illustration of the interrelation of politics and economics and how the steps in one sector impact the other in this interdependent, globalized world. Political actions such as restricting travel had drastic economic impacts especially to the countries whose economy is largely dependent on tourism, foreign investment etc. Similarly, economic actions such as limiting foreign products’ access had political implications in the form of sudden unemployment and downturn in living standards of people.
For the first time in history, oil prices became negative when its demand suddenly dropped when industries were shut down almost everywhere. Russia and Saudi Arabia’s oil clash which led to increased oil production by Saudi Arabia further complicated the situation. This unprecedented drop in oil demand and consequently its price would only help in the economic recovery of countries. Covid-19 has impacted three sectors badly. First of all, it affected production as global manufacturing has declined due to decrease in demand. Secondly, it has created supply chain and market disruption. Finally, lockdowns affected local businesses everywhere. Bad impact aside, pandemic has led to the change in demand of products. Instead of investment and foreign trade, states having strong medical and textiles industries have got the opportunity of increasing exports. This is because there are requirements of face masks everywhere to avoid contagion. Need for medical instruments have also increased such as ventilators in developing countries specially.
The only positive impact of Coronavirus is that it fostered environmental cleanliness. It is said that it can avert a climate emergency but the fact is that, as soon as the lockdown will be eased and businesses will begin returning into functioning, economic growth and prosperity will be prioritized over sustainability and we might even witness, more than ever, carbon emissions into the atmosphere.
Novel coronavirus has brought new dynamics to the world’s politico-economic structure. While the world has the opportunity to come close for cooperation and consensus to fight it, we might witness increased regionalism in the post-pandemic world as a cautious measure and alternative where crisis management would be more cooperative and quick. There is a likelihood of the emergence of an international treaty or regime to ban bio-weapons. While the prevalence of political optimism is not assured in the post-pandemic world, we are likely to see the interdependent economic world, as before, to overcome the economic slump and revive the global economy.
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