Impact of COVID-19 on Global Economy: The Definitive Guide

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Six Geo-Political Trends:

This article explains the impact of COVID-19 on Global Economy and Politics and how this COVID-19 pandemic accelerates the six geopolitical trends in the upcoming years.

Rise of Asia

In historic time, Asia accounted for half of the global GDP. But if you see the industrial revolution accompanied by the European naval expansion and the colonialism of European countries contributed to the rise of the west.

But after the 2008 financial crises, Asia was economically sound compare to the developed economies because of its micro-economics policies.

Even during this COVID-19 pandemic India and china are the only G20 countries to register economic growth despite the pandemic.

India, China, and many other Asian countries have shown greater responsiveness in tackling the COVID-19 pandemic compare to advanced economies like the USA and Europe.

Because we can see that the rate of infection is on the rise in countries like the USA and certain European countries like France Italy, etc.

The recovery rate of Asian Countries from this pandemic is around 30%. This number is high when compared to developed nations.

So we can clearly see Asian economies will recover faster when compared to the westen economies.

The Retreat of USA.

Almost for one complete century USA was shaping the global economy order but now if you see USA is retreating.

For an understanding of this you show know how the USA shaped the global order.

Like starting from The Treaty of Versailles that brought World War I to an end and then came the league of nations after World War I.

And then after World War II, this league of nations was replaced by the United Nations.

At the very end came the cold war which happens between the capitalist western countries led by the USA on the one side and communist Russia on the other side.

So in all this events the USA was at the front.

And if you see in recent history, The USA dealt with terrorism by intervening in countries like Afghanistan and Iraq, also it was readily engaging and tacking the emerging climate change threat. In all this area the USA played a decisive role.

In the past two years this trend is changing, under the current presidentship of Donald Trump’sAmerica first” policy is being pushed.

So here the USA is trying to portray a protectionist attitude. We can see that the USA is taking efforts to control the supplies of medical equipment and medicines during this COVID-19 health crisis.

All these events shows the “America alone” attitude of present government.

Intra-European Fission

European countries are already facing many internal challenges like the expansion of membership of the European Union to the East European States, who are comparatively poor countries and there is the impact of the financial crisis of the European Union zone.

There is a running issue of Britain exit from the European Union and there is a slight tension between the USA and Europe. these are further aggravating the internal challenges in Europe.

North-South Divide with-in Eurozone

Countries like Italy, Greece, Spain, and Portugal have accused the Northern nations like Germany, Austria, Netherlands that they are not doing enough, these nations persuaded the European central bank to impose severe economic restrictions and measures on the southern nations.

And during the COVID-19 pandemic Italy was denied medical equipment by its EU neighbours, who introduced export controls.

So there is accusal of southern european nations against the northern european nations.

Emergence of China

When Italy was denied the medical equipments, china was the one who airlifted medical teams and critical supplies to the Italy.

China’s growing role after joining word trade organisation.

Emerging trade war and technology war between the USA and China.

So now the relationship between the China and USA moved from cooperation to competition.

Belt and road initiative of china

This initiative seeks to connect China to Eurasia and the African continent through maritime as well as land routes.

This indicate that China to emerge as global leader.

Fading International and Multilateral Organisations

Global problems demand global level response but if you see during this COVID-19 crisis, International and Multilateral Bodies are Nowhere on the picture.

They became the victims of Big Power Politics.

World Health Organisation

Recently, the USA has blamed China for the COVID-19 outbreak, and it also accused china of suppressing the important information that contributed to the spread of coronavirus.

Along with this the USA also pointed out that WHO has failed to exercise global health leadership .

And accused that WHO has become a tool of Chinese politics, power, propaganda.

The United States of America recently cut the funding of world health organization.

United Nations Security Council

United Nations Security Council is one of six principal organs of the United Nations.

The tussle between the USA and Russia from the cold war are till now. They are blocking the UNSC on many sensitive issues. This led to the paralysis of the united nations security council.

World Bank

Certain multilateral organizations such as G7 and G20 are also losing it’ s relevance at present.

World bank is under the influence of the western nations especially the USA because of its veto power and politics.

There is a need for reforms of these international and multilateral organizations and this can be achieved through collective global leadership.

Energy Politics

Energy markets across the world are changing, now because of this burning issue called climate change, the countries across the world are turning towards renewable and green technology.

At present the USA is emerging as a major energy producer altering the energy markets.

Apart from this, we have a recession due to this COVID-19 crisis, and also because of the fight between the oil-producing nations like Saudi Arabia and Russia, the oil prices are reduced.

Along with this COVID-19 pandemic also aggravated and led to a further decrease in the oil prices.

All these will leads to internal tensions in the oil-dependent west Asian countries who are major producers of oil and it will further create political instability in this region.

These are six geopolitical trends that are severely impacted by a coronavirus. all these geopolitical trends will lead to more unpredictable and disturbing times in the coming future across the world.

The Global health crisis could possibly come to an end if a vaccine has been found by the end of this year. this COVID-19 crisis has given an opportunity to rising nationalist and protectionist trends across the world. it will only prolong the economic recession and this might lead to economic depression further leading to increased inequality and polarisation across the globe.

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