CORONAVIRUS – WREAKING HAVOC ALL AROUND

Unless you live under a rock, you know about the coronavirus. The novel coronavirus named COVID-19 has officially affected 207k people around the world in just under 3 months and is still spreading like fire. With no proper vaccine or treatment and people around the world still taking it lightly, taking few or zero precautions doesn’t give one hope for this pandemic to end any time soon. 

Along with obvious health issues that this virus has resulted in, it’s effect isn’t just limited to health and fatalities. The virus has affected many sectors all around the world and shook the already weakening global economy. Let’s look at the various sectors that this virus has affected.

1. TOURISM

The very first sector that was impacted immediately was tourism. Ever since China announced about the unknown disease spread in its Wuhan province and that it is of contagious nature with human to human transfer, the very first barriers that the world imposed was closing the borders by the neighboring countries and cancellation of flights, first to Wuhan and later to China and eventually to all the major hotspots where the virus has spread like fire.

Tourism contributes to about 10% of world GDP (i.e. about 8.2 trillion USD yearly). Many countries such as Aruba, Seychelles, Bahamas, Macau, and the Maldives depending majorly on tourism. With tourism under the scanner, many countries are going to spiral into recession as it is unlikely that even after finding the cure or taking control over the virus, people are going to travel any time sooner.

2. AVIATION SECTOR

The very next and obvious sector that is being impacted majorly is the Aviation sector. Both the tourism and aviation industry is interconnected with both of them depending on the steady working of the other. All over the world, finances of the already cut-throat competitive aviation industry are crippling, many even requesting their respective governments for some kind of help or pay-outs. 

The gravity of the situation could be easily understood by analyzing the loss of the sector in the first 3 months of 2020. The aviation sector in India is expected to lose about $600 million by the end of March 2020 itself with the loss ranging up to $100+ billion for companies globally.

3.SMALL BUSINESSES

Smaller businesses are going into bankruptcy all around the world due to shutdowns. Everyone is well aware that unlike huge companies, smaller businesses have very little extra capital and even slight volatility in the market could lead to their downfall. 

Businesses like Pav bhaji sellers or local shopkeepers or even small manufacturing units are affected by such disruptions around them. With no one to sell their products to or no one to deliver the raw materials or the finished goods, such businesses are left with no choice but to bear losses.

4.SUPPLY CHAIN MARKETS

China is the hub of manufacturing; it has created that niche in the last few decades. Most of the companies get either their raw materials or few parts of their final product or even their finished products being made in or delivered from China. 

One can notice this phenomenon all around them. Take the smartphones or electronic industry as a whole, many companies have stated that either their product launch or product announcements have been delayed due to a break in supply chain markets in China.

5. PHARMACEUTICALS

China is the largest supplier by volume of Active Pharmaceutical Ingredients (APIs), the key ingredient that gives the actual pharmacological effect to the medicine, has caused the shortages of medicines across the globe. 

Due to the same, the prices of drugs all around the globe are also on the rise, pinching the pharmaceuticals manufacturers. Prices due to the same have shot up to 40-50 % in some cases to even costing double the price than just a few months ago.

These are not the only sectors that being rampantly impacted by the spread of COVID-19. The already volatile stock market is tumbling even more ever since the global spread of the virus with even the NYSE halting the trade for a while due to steep decline on the 9th of March, a step it last took during the 2008 recession. Even the entertainment industry has taken a toll with many movie releases being delayed. Though the entertainment industry is associated with tons of money, many people like the extras on the sets, electricians and support crew live paycheck to paycheck. 

The current situation can also lead to an understanding that major dependency on a single country could upheaval the worldwide economy. Also, COVID-19 has come around one of the fragile states of the global economy impacting each and every sector. Here’s hoping for it to end sooner rather than later.