The Global Emergency
(Mariam Siddiqui)
The globe today is yet again in another state of emergency. The novel coronavirus which
originated in China in December last year has now effected 113,000 people around the world
and killed over 4,000. It has spread in more than 105 countries, among which the most
affected include China, Italy, Iran and South Korea. China, nonetheless, has reported the
largest number of death toll that is around 3,140.
The coronavirus (COVID-19) is not only a global medical emergency, it also have multiple
adverse effects, particularly on the global economy. Considering the fact that China is a
major manufacturing and trade hub, any commotion in Chinese economy would have an
international perturb. With China’s exports tapering by 17.2 per cent and imports dropping
down by 4 per cent globally, making the trade deficit of 7.1 billion USD, the outbreak has
contracted and disrupted the global supply chain. Substantial factory shutdowns and shortage
of labour has augmented the supply and demand gap, choked distribution and transport,
caused massive shutdowns across the country and the globe henceforth abridging business
activity.
With the stock and oil markets facing a steep downslide, the fear of the epidemic has
significantly slowed down the capital markets. Countries relying on China’s manufacturing
and production are facing delays, and shortages of supply is costing them billions of dollars,
rightly mounting the fear of a global recession.
The contagious nature of virus made the neighbouring countries of China, like Pakistan much
more susceptible for the outbreak. However, because of strict measures taken by Pakistan to
fight this novel disease, 19 cases are being reported in the country till date, out of which one
has completely recovered, and luckily no death have been reported yet.
In the scenario of Covid-19 turning into global pandemic, the estimated loss to world
economy would amount to $1.5 Trillion. For instance, the global tourist market has 163
million tourists from China alone which accounted for approximately a third of travel retail
sales worldwide in 2018. Asian Development Bank recently indicated that in the worst case
scenario of the outbreak of the epidemic in Pakistan, an estimated loss of $5 Billion will hit
the economy and almost a million people would be left unemployed which may cause
Pakistan’s economy to suffer 1.5 per cent loss in its GDP. Even the net effect after the fall of
oil prices in global markets would be neutral on Pakistan’s economy because of the losses
incurred as a result of Covid-19.
Pakistan sharing almost 1.9 Billion USD exports is among the top 20 countries being majorly
affected for having strong inter-trade relations with China. Pakistan being an ally of China
and working on China Pakistan Economic Corridor (CPEC) mega project would definitely
face economic and political ramifications if this crisis goes beyond control. Progress on
CPEC would be highly affected because of the shortages of labour and fluctuations in supply
chain from China.
Nonetheless, a local news channel in Pakistan reported that Pakistan International Auto Show
– 2020 which came under the clutches of Covid-19 because of absence of Chinese
companies, proved quite beneficial for the local industry. Absence of Chinese companies
resulted in more interaction between local companies and as a result the prospects of
indigenous business development were enhanced. Prior to that, Chinese companies used to
out-price the local companies during any bid. Absence of foreign contractors and suppliers
also pushed the local industrialists to work on solution finding within the country’s market.
Last but not the least, there is no denial that the threat declared by World Health Organization
as “global health emergency” has entered our door and with multifaceted implications. A
collective and comprehensive action at part of the world community and particularly Pakistan
is required to fight this novel threat. Till now, the containment efforts have just produced
nothing but uncertainties as the reports that have emerged upholds that one year would be
required to develop Covid-19 vaccine. World has seen and came out of many such crises
before, but in an increasingly globalized world, the effects of such problems are fast-
spreading and far-reaching and are not easily sustained. Therefore, a much more innovative
and wide-ranging strategy is needed to cater this multipronged problem
