This global system is currently suffering from accelerating change. Authorities have taken on a new role that no person has ever had to previously assume in their careers. As someone with only an observer status as the epidemic unfolds, what struck the most was the magnitude and speed of reorganisation that our country has gone through. Before continuing with my perception of the stability of world order, I should say with respect that the human race is, above anything, a tough species. Being in the middle of a gathered united force in the UK and across the whole world, the recent efforts made – do bring to light how strong we can be in fighting against such an existential crisis. Of course, comments can be made on how accountable our world leaders have been, but ultimately we are only progressing in as steep a rate as we are humanely capable to doing and that should be respected by all. Nevertheless, for the sake of continuity in this blog, I am as always eager to question international responses and future prospectuses, to this crisis.
The destructive impact of this virus can be found in great descriptive and statistical detail across the Internet. For the purpose of clarity, it seems that the most significant statistic from the IMF is that world growth in 2020 will be -6.1% assuming the virus will be eradicated before the end of the calendar year. Proof of this can be the fact that birdsong can be heard in even the busiest of London’s streets. Speaking if the IMF, it’s recent blogs, to my knowledge, haven’t been able to fully convey the action that they are taking to slow the crisis. Despite headlined blaring that the IMF has readied a $1 trillion rescue fund without any specific breakdown of how it will be distributed, they do make an interesting analysis of the uncertainty generated by COVID-19. The unique and innovative metric they used was to count the number of times the word “uncertainty” is mentioned near a word related to pandemics or epidemics in the Economist Intelligence Unit (EIU) country reports. To make the WPUI index comparable across countries, they scale the raw counts by the total number of words in each report – and reach a conclusion that the coronavirus hits an uncertainty level of 14, in comparison to Ebola just short of 1 and SARS nearing 5. With consideration of how globalised the system has become, it doesn’t come as a surprise that many forecasters are anxious about the prospect of near-future operations.
With climate change having gained strong momentum, most significantly in the several months preceding the outbreak, some outlets have gone to consider any indirect effect that this halt in domestic growth affairs may have on climate changes. All reports publish substantiated evidence that there have been significant short-term positive impacts as a result of the manufacturing slowdown. But this begs the questions, is there truly a positive outcome in the context? On the surface, it suffices to say yes. However, governments are currently pursuing all policies at their disposal to stimulate a surge in growth. On such a basis, it would be strategically tenuous to promote green net targets, alongside, which would evidently undermine a corporations rapid resuscitation. Furthermore, surely the aforementioned momentum gathered would have been somewhat dismantled by the sudden separation of the regional movements. It boils down to how sustainably the economy will recover, which spills into how firms will decide on their profit goals in the coming year. If the overall target is rapid recuperation, then the positive effects displayed on climate changes will only stay short term.
In previous posts, I have gone to discuss at length how commendable China has been in achieving record rates of growth whilst simultaneously becoming a liberalised country. Yet as recent new unfolds, there has been a deep look into how and why China manipulated data surrounding victim numbers. China’s lies began January 3rd when the national health commission ordered institutions not to publish any information relation to the ‘unknown disease’ despite several attempts by higher medical authorised to warn medical staff of the event dangers. This manifested into authorities still claiming that there was no human to human transmission as far into the outbreak as January 20th. To an extent, it could be that China need to maintain a good image to retain powers, but any detractor would raise that such an autocratic regime has no need to broadcast the strength of political affairs. Simply put, the Chinese were naïve of the consequences and thus generated global turmoil.
So the questions props, is China so much to blame that they deserve to pay reparations?
Granted, they are key to blame for the outbreak for plenty of reasons, one of the most relevant which attacks the lack of regulation of so-called ‘wet markets’ but also their lack of initiative to halt the spread at the very beginning. China’s budget surplus of $40.1 billion certainly puts them in a potential positions to give payouts. But this would be wrong. Ultimately, reparations signify an attack on the quasi-communist opaque regime that they maintain. Realistically, however, the burden of reparation payouts would only be passed down to the citizens – presumably through raised taxes.
Otherwise, it may lead to some unanticipated economic collapse due to the inability of the state to handle finance, which would, in turn, lead to another global meltdown given the role China plays as the manufacturing hub of the world. Reparations are strong in meaning, but if implemented would not achieve the intended aim of helping countries recuperate and punish Chinese authorities. In my opinion, China will eventually have to bear the burden of trying to manage capitalism in a one-party state, but it should happen without foreign involvement.
In conclusion, any nation coming out of such an unprecedented ordeal will be sore. It doesn’t have to be said that it is the role of those advanced economics to provide adequate funds to Africa and South-east Asian counties, to ensure the livelihood of citizens across the globe can become better eventually. As always, it comes down to the decisiveness of people in positions of power to make a change in good time. Now, our role, as people with observer status, is to keep a calm attitude toward the events unfolding and ensure we play no role in exacerbating the consequences.
Economics Relate 