COVID 19: A BANE FOR THE ECONOMY
By Kisha Parashar
Several countries across the world have resorted to lockdowns in order to prevent the infection from spreading further. These lockdowns mean confinement of citizens to their homes, shutting down of businesses and most importantly, minimal rates of economic activity.
An economy is quite vital for a country, it helps us to not only survive but thrive. Economic growth and development are the two factors on which a country’s living standards and efficiency depend on. Having enough is extremely important for stability, low crime levels and technological processes. Thus, having low rates of economic activity means less growth, less development and hence, a setback for the country.
Millions of people are losing their jobs, Micro, Small & Medium Enterprises (MSME’s) are being shut down and various businesses in the tertiary sector, like Tourism, have gone out of business. Activities that once were an asset to the economy, are now a liability.
We all live in a consumer economy, where the concept of consumerism takes place. The expenditure creates an economic virtuous cycle where more the people spend, more the businesses grow and more the wages rise. When people spend more on goods and services, in a never-ending cycle; the economy grows, leading to increased production and greater employment.
This is how it works:
With hundreds of thousands of markets closed during this pandemic, people aren’t consuming many resources, hence, the virtuous expenditure cycle has been slowing down, causing a decline in the economic activity which in turn is the starting point of a recession!
Last but not least, with an impact on global trade and imports, countries like China, Saudi Arabia who depend heavily on oil imports for their economies have faced a huge misfortune. China, accounting for the second-highest Gross Domestic Product (GDP) after the United States, has not only affected its economy but of other countries as well.
Lastly, as we know, a large portion of the population lies below the poverty line.
Due to the drop in GDP of a country, pauperism will further rise, thus making the situation worse. Landless labour would increase, daily wage workers would face hardships in finding decent jobs and hundreds of thousands of children would be malnourished as their families do not possess the income to buy food or efficient health services.
An economy is nothing without its people, but covid has massively given rise to hundreds of unhealthy and uneducated citizens; who are hence, liabilities.
In conclusion, Covid-19 has put various countries in turmoil. So much so, that the impact on the economy is much worse than the virus itself!
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