The COVID-19 pandemic has had a detrimental effect on several aspects of human life. Measures taken to control this pandemic have led to a decrease in workforce across all economic sectors and has caused many jobs to be lost. Worldwide, the socioeconomic effects from this pandemic have sparked a fear of impending economic crisis and recession.
Nicola, M. et al. The Socio-Economic Implications of the Coronavirus and COVID-19 Pandemic: A Review. International Journal of Surgery (2020). https://doi.org/10.1016/j.ijsu.2020.04.018
17 April 2020
In a response to control the pandemic, governments all around the world have had to force the shutdown of many economic sectors, sparking fears of an impending economic crisis and recession. This article focuses on the impact of the primary, secondary, and tertiary sectors of the economy that have been impacted worldwide. The agricultural sector has seen a global crash in demand by 20% as the demand from hotels and restaurants have plummeted. Furthermore, the aspect of ‘panic-buying’ has further complicated the shortages. There has also been a steep drop in the petroleum and oil industries as the major producers of oil compete in an oil-price war and as the airline industry and stay-at-home orders reduce the demand. This creates an excess in supply that has led to overflow of the storage capacity. The manufacturing industry has also faced importation issues and staffing deficiencies leading to the disruption in supply chains. The COVID-19 pandemic has also affected all levels of the education system. UNESCO estimates that close to 900 million learners have been affected by the closure of educational institutions. A study modeling closures nationwide in the US suggests that there would be a median cost of $142 per student per week. Furthermore, it has been estimated that a four-week closure of New York City would lead to an economic impact of $1.1 billion and a nationwide closure of schools for 12 weeks will cost 1% of the GDP. The most significant impact is faced by the research community with a lot of research in the non-COVID related topics being paused or suspended in order to free up staff and resources critical for COVID-19 related research. Outside of the healthcare sector, many social sciences, humanities and other research settings have been halted at many educational institutions. The pandemic has also inadvertently affected the financial industry leading to a drop in stocks. Government support through ‘care packages’ were initiated globally which led back to the rise in the financial markets. The pandemic has highlighted several gaps within the healthcare industry exposing weaknesses in the delivery of appropriate patient care during a pandemic. The hospitality and travel and tourism industry has perhaps been hit hardest as a result of this pandemic. The World Travel and Tourism Council estimates that about 50 million jobs may be at risk in the global travel and tourism sector. The sports industry has also lost revenue due to cancellations of all sports events worldwide. The Food sector has also been put under strain as a result of the panic-buying and stockpiling of food, which has led to increased concerns of food shortages and changes being put forth by stores which include limitations on amount of each product that people can buy and providing delivery of food products to customers to avoid panic buying and overcrowding at stores. In conclusion, this pandemic has called for a strong leadership in healthcare, business, government and the society worldwide. Immediate relief measures need to be in place and implemented along with long-term planning in order to rebalance the economy and re-energise it following this economic crisis.
Summary by: Parth Patel