Human race is a
resilient specie with a strong survival
instinct,having gone through many wars, pandemics and disasters. Following the nature’s rule of survival of
the fittest, humans have not only survived in all situations but also ensured
lesser space for other living beings eventually causing many species to extinction.
COVID-19 has provided human
beings yet another opportunity of survival. Following Maslow’s theory, in all this panic and chaos,
only thing which went short on supply was the basic necessity that is the food.
People do not seem worried about closure of airports, luxury brands,
cars and fine dining. Prices of
non-essentials have plunged while trillions of dollars have just been wiped off
global economy. So far, it is only the basic
food commodities that maintains its importance; as it can allow long periods of
isolation without starving. Governments’
main concern today is health care for the sick and food for all.
Outcome of this outbreak
is yet not known, neither a cure has been found. Even the most developed countries are unable
to give a timeline whereby their own country can be pulled out from the
whirlpool of this mutated virus. Apparently, human’s own immune system is initiating
the healing process and doctors are supporting by managing the patient.
Since the virus first detection in December 2019, more than 800,000
people have been infected with this virus and the number continues to
grow. Deaths have crossed more than 50,000
and counting is still on. It is still difficult to fathom the extent of
morbidity and mortality in in coming days but one thing appears to be more
certain that it will take a few months to recover out of this health crisis However, economic effects of this fiasco will
take a much longer time to recover.
.
World is already
witnessing crash of stock exchanges, intangible money in the stocks have simply
been wiped off the books. Likewise,
many businesses addressing luxurious needs have come tumbling down. Economist are predicting joblessness to touch
25 million figure, just in USA. As COVID-19 is spreading fast and unleashing its influence to
immobilise the smartest living creatures on earth, estimates given earlier seem to be obsolete.
Leading airlines of the world are shedding staff to the tune of
thousands. Revenue losses only in this
segment are touching US$1 trillion mark.
Some airlines have already announced pay cuts or sent staff on unpaid
leave.
When a person´s health and livelihood are the most
important factors in one’s day to day life, need of luxurious apparels holds
lesser importance .This will eventually lead to lifestyle cuts and reduced
consumer preference in spending on these items.
Thus, a recession in apparel industry is eminent, which is likely to affect countries like
India, Bangladesh, Sri Lanka, Pakistan etc., as export orders will reduce and
it will become unsustainable for small manufacturing concerns, resulting in
reduction in manpower or total closure of the units. Industries supporting
apparel industry will have ripple effect.
Many brands have already announced online
sale for their new arrivals and put a cap on further orders. Likewise
Energy sector will face serious challenges owing to falling oil prices. It will
have to take concrete measures to reduce production cost, which may involve
review of human resource cost.
With increasing unemployment and pay cuts, disposable
income for extravagances and
frills will reduce considerably.
Governments will be more concerned with food security leading to
promotion of agricultural produce. Strategic food stock levels will be
increased, exports for value addition will reduce. In overall terms economy of those countries capable
to produce their own food will revive earlier than those dependents on others. Companies involved in production of
value-added food and consumer products will take longer, to recover from this economic
crisis. Luxury industry will be the tail
ender in the game of revival.
If this ordeal
continues for another 6 months , the world may witness grave consequences; eventualities
that we are not prepared for. A
financial crisis occurred in 2008 resulting in fall in oil prices and cities
like Dubai became city of empty skyscrapers. To date many high rise, remain
without occupants, though not publicly admitted. The domino effect was halted by pumping money
into the system from different corners and lowering interest rates, etc. It was all because of a single factor of high
mortgage risks. This time situation is altogether different, it is not
primarily a financial crisis, yet has
brought the world to a standstill, well almost!. It has brought down oil prices
all the way down to US$20 per barrel and the journey further downhill will not
be a surprise.
In the developing
scenario, have nots may develop criminal mob psyche. Some isolated incidents that have taken place
across the globe, indicates that if something is not done soon to provide basics
for under privileged, an irreversible chain mob psyche is likely to begin. Economists
are forecasting losses, rich are less worried at present due to accumulated
wealth, whereas media is creating chaos to save its own jobs, but and but with
all capitals. NO ONE WILL BE SAFE.
Question arises as to
what the solution can save millions of jobs and prevent a total damage to wheel
of global economy?
Take a break and slow
down!
Adopting simpler
lifestyle will be the key to ensure minimum unemployment and sustain maximum
businesses. A cut in earning must be taken by all individuals and trades to
help people survive. Businesses will have to re-think their pricing
and profit strategy. While People will have to re-consider reduction in their
monthly incomes. The world will have to
take measures to immediately bring down costs matching a decade ago and so the
remunerations. These steps may not be
very lucrative, to start with, but will help avoid anarchy of civil wars and
lawlessness. It may cause discomfort to the privileged class but will keep the doors
open to silver lining.
This is the time each and everyone should rise
above own self and think selflessly. Otherwise
if banks start filing bankruptcies, whatever is accumulated will vanish in few
seconds.
A time to re-think!
