Once world’s major and booming economies are now extremely hit by coronavirus pandemic. COVID-19 has plunged the US and European countries in never- seen deepest recession period.
This recession is obviously incomparable to 2009 global financial` crisis and the aftermath of second world war’s economic hardships.
US economy shrank at a 4.8 percent annualized pace in the first quarter, the biggest slide since 2008 and the first contraction since 2014.
The European Union’s GDP decreased by 3.5 percent in the first quarter of this year, according to a preliminary flash released by Eurostat, the bloc’s official statistics agency.
The West countries, hence, have passed a wide range of relief bills to save their economic ills. Besides, they have been rushing to reopening after passing the peak of the virus despite health experts’ warnings not to lift up tougher containment measures for a while.
A number of health institutions are also underscoring swift reopening would fuel the spread of the virus at this particular time and urging governments to focus not only on economic recovery measures, but also to take firm steps that prevent the second spick of the pandemic.
In the same way, Africa’s economy that had been struggling to survive before the global pandemic was erupted in a big trouble. IMF forecasted African countries’ economic growth would be contracted by 5.1 percent due to COVID-19.
In his article that was recently published in New York Times, Prime Minister Abiy Ahmed(PhD) calls on rich countries to further extend the debt repayment period for developing countries in Africa as the coronavirus has already begun to hit these countries’ economics harder than ever.
Most African countries’ annual health expenditure is far less than the money that is required to combat COVID-19. This has also made the ongoing fight against the pandemic more complicated let alone the poor health system.
Indicating one of the coronavirus induced economic impacts in Ethiopia, Finance Minister Ahmed Shide says before the pandemic came to exist, there had been 15,000,000 people that were in need of all- round assistance, but now 30,000,000 nationals are living on handouts.
As to him, Ethiopia has so far secured globally soft loans over 2.1 billion USD amid COVID-19. Similarly, the country has enabled to collect 1.7 billion Birr locally having formed national resource mobilization committee to this end.
In connection with this year’s Labour Day, UN has announced that 1.8 billion informal jobs are at risk and over 2.8 billion workers are forced to stay home due to the pandemic.
Also many experts are saying social distancing will last until 2022, thus, the economic pain related to COVID- 19 will continue to live that longer in this world.
Some economy experts are now advising governments and businesspersons to restructure businesses aimed for avoiding millions of job losses and numerous business fallouts all over the world as well.
Tourism and aerospace industries are the most vulnerable to the COVID-19 induced economic crisis as most airline and hospitality companies are laying off(furloughing) high skilled workers or cutting salaries to survive, as to the experts.
The mounting tension between the two big economies of the world, the U.S. and the Peoples’ Republic of China over the handling of the virus would make the existing economic hardships worst as such blame game would lead both countries to endless trade war.
Africa is appreciated by many for taking rapid lockdown measures to contain coronavirus than the other continents, but it is expect to win current uphill battle against coronavirus induced economic hardships designing sound economic rescue plan.
The Ethiopian Herald May 5/2020
BY DANIEL BEYENE
