The concept of globalization when introduced back in the 19th century has made the economies enthralled to begin their global trade and operations across international borders. With each passing decade, the businesses became more prone to the competitive pressure coming from international companies. It became a part of life in the commerce industry until when the pandemic hit the economy quite recently, fading the global links for several countries. Our country’s economy shattered and the administrators began to give a second thought over global trade with the country, which is almost in the rivalry.
The worldwide pandemic has forced the citizens of every country to sit back at home due to the enforced lockdown, which was highly mandatory to stop the spread of the novel coronavirus. This implied that the businesses need to be kept shut by the time the pandemic settles or the situation eases a bit. The economy is closed down and there is hardly any trace of when will things resume back to normal. According to IMF, the global economy will contract by 3% in 2020 which is the steepest slowdown ever experienced. It reminds us of the Great Depression of the year 1930 that had hit the economy drastically and now the wave of a pandemic has effects closer to the former one.
The economy has moved into the recession phase of the trade cycle, meaning thereby that the economy is shrinking badly without any former growth. This situation will lead to other economic problems like unemployment, a quite major one. Further, unemployment will lead to poverty and reduced GDP levels of the country. A study by IMF also revealed that the manufacturing output has lowered down which leads to a lack of external demand as well as domestic demand. It is hard to look at the bigger picture when the economy is falling down at a faster rate. Although the effects are drastic during the pandemic, more destruction is on its way that will be enormous after-effects of the pandemic. Every economy is trying its best to control the situation and plan for what’s next to arrive. The uncertain situation has led to the collapse of businesses, whether big or small. This shift is huge.
The whole crisis has impacted global economies in a way that there is the fastest decline in international flows since the beginning of the economic revolution. According to the statistics, there is a 13-32% decline in merchandise trade, a 30-40% reduction in FDI and a 44-80% drop in international passengers. It doesn’t directly point out the effects on the global economy’s integration. Therefore, there is still unification of big economies that are going to trade in the future soon. These changes are contrary to the latest gains in the economic sector. The latest WTO forecast states that the volume of global goods export in the year 2020 could roll back to how it was in the mid-2000s. This has nothing to do with the strong integration of economies in recent years. However, during World War 2 globalization didn’t exist, that won’t be the case anymore.
Now, the big question is what will be the post-COVID-19 prospects of globalization?
Will the economies integrate again for the sake of resuming trade operations? How different will be the future flow patterns from how it was before the pandemic had hit the economy?
There are ongoing shifts in the utilization of technology such as adopting e-commerce, video conferencing, telehealth services by the economies. E-commerce is now more focused on cross border trade by online sources. There need to be improved public health strategies to encourage more and more international travel. There are a lot of challenges as well as opportunities in front of businesses and it is up to them how they will make the most of it. Any event that occurs can be taken advantage of with the smart use of available resources in the commerce industry. Had the businesses implemented a unique business strategy, the operations need not be ceased fully. Covid-19 is here to stay for long and some way has to be made for tackling it.