How will the world transform after the Covid-19 pandemic?

How will the world transform after the Covid-19 pandemic?

According to The Straits Times, it may be too early to predict what will happen after the outbreak of the acute respiratory infection Covid-19 has passed. However, there are views that when overcoming this crisis, the world will not be the same.

Globalization can be reversed?

It is undeniable that easy travel around the world and moving without borders have contributed to the rapid spread of disease. However, reversing globalization will not be easy due to the fact that it is impossible to de-globalize an already globalized world.

New York Times journalist Thomas Friedman said that globalization will continue after the epidemic is over. He said that there may be some obstacles to global economy and trade but globalization will continue to operate. Naturally, there may be some new restrictions and restrictions on past free activities, but we cannot prevent globalization.

Others predict that the "trend of return" will take place in many places with many businesses bringing factories overseas "home." Experiencing the economic catastrophe during a pandemic, people now realize that without factories that supply components and goods in their own countries, it will be difficult to withstand an international crisis like Covid. -19.

If this trend develops, the countries that depend on international trade will also suffer as many countries reduce imports over a period of time. Therefore, after a pandemic, some countries will face unprecedented economic recession.

Trade structure has changed

Since joining the World Trade Organization (WTO), China has been increasingly integrated deeply into the global value chain. However, when "tethered" to the global value chain, China also became more dependent on the global supply chain.

That means that a crisis will lead to disruptions in part of the global value chain because the entire supply chain stops working.

Competition has been fierce in the apparel, electromechanical and chemical industries, due to the high level of similarity in exports between China and Southeast Asian countries and the overlap of export destinations. .

As labor costs in China rise, developed economies are shifting their factories to more cost-competitive countries in Southeast Asia. The epidemic is likely to catalyze this shift in labor-intensive industries.

Disease will also affect the supply chain through both supply and demand. Domestic demand for production and consumption in the immediate future will decrease sharply, leading to a sharp decrease in imports. On the supply side, most domestic factories postponed their reopening days due to disease. This has hindered the production processes of overseas companies.

The epidemic situation outside of China, especially in developed countries in Europe and the US, suddenly went out of control. This means that the Chinese economy faces both supply and demand pressure.

In terms of trade structure, the most affected economies will be those that are heavily dependent on China for supply or demand. The next affected countries are large developed economies like the US - one of China's largest trading partners. As US companies move their suppliers from China to Canada and Mexico, the pandemic will accelerate the separation of the United States from China in the global value chain.

Among Asian countries, China is the largest export destination for Japan and South Korea, while these two countries are the largest and second largest import sources for China. Stricken by the epidemic, all three countries will struggle to maintain their value chains.

In 2019, the Association of Southeast Asian Nations (ASEAN) replaced the United States as China's second largest trading partner. As ASEAN countries are not among the countries most affected by the pandemic, the China-ASEAN value chain will be only moderately affected.

On the other hand, China's total trade with the European Union, the country's largest trading partner, has seen a sharp decline. Combined with the serious state of the epidemic in Europe, China-Europe trade could also be greatly affected by 2020.

Global power shifted to the East

While it is not possible to accurately predict the impact that the Covid-19 epidemic will leave on the world, we know that the world after this disaster will be very different. The big question here is how different? Recent developments have yielded several answers.

First, the economic influence of Covid-19 will be worse for developing countries like Pakistan. Because the developed world has a larger financial space, countries are able to withstand the situation when businesses are closed. Unfortunately, developing countries do not have the financial resources to pay for those who have to stay at home for extended periods of time.

Second, the power of governments has been applied on an unprecedented scale. This will have implications for the way governments operate in the future. The inviolable freedoms, such as freedom of movement and religious freedom, had to be "in the back seat", at least temporarily. It is quite possible that governments in the post-Covid-19 world will be larger and more powerful.

Finally, the Covid-19 pandemic could change the global power structure, moving from the Western world to East Asia. Ignoring the possibility of a second wave of infection in the future, current evidence points to the effectiveness of measures in China, South Korea and Singapore in "flattening the wave" even if countries This has less time to deal with the disease than Western countries.

how will the world change after the 19 year covid

The inviolable freedoms such as freedom of movement had to "sit in the back seat", at least temporarily. (Source: Reuters)

The change of power in the global world order is unlikely to happen quickly, but the Covid-19 crisis is undoubtedly a potential catalyst in this process of change.

In addition, the epidemic has changed to a normal state, namely Covid-19, which has broken the world's dependence on oil and other fossil fuels to provide energy for the economy. Global. When global demand for oil plummets due to lack of economic activity, a battle for oil prices may occur.

Another fact is the destruction of biodiversity and the possibility of viruses transmitted from animals to humans (which have so far been neglected) that provide a short-term vision of the actions taken by the environment of the offspring. people. If we ignore this and go back to work as usual, the world will be incurable.