The virus has a serious impact on almost every business, work, travel and tourism, health industry, entertainment industry, food outlets, and overall on the economy.
Worldwide Virus attacks are frequent:
No drug or vaccine has yet been developed for the Coronavirus. Its spread has now been declared a global crisis. Currently, the virus is not limited to China and its surrounding countries. It has spread rapidly around the world. Spread a lot in Italy. This is due to its tourism industry. Figures as of March 13, 2020, show that so far, 1,35,118 people in the world have been infected with the Coronavirus, of which 5,056 have died. About 3.7 percent of the total infected patients died. Mortality is higher in the elderly or non-elderly people suffering from other diseases, while healthy children and young patients survive 99 percent of the disease. The Spanish flu, which swept the world in 1918, killed millions. For the first time during the last drought, the world’s population fell due to this epidemic. The population of India also fell by 1.7 million as per the 1921 census due to this epidemic. India’s population has been growing over the next 100 years, and today it is estimated at 136 crores. According to the 2001 census, it was about 103 crores, and according to the last census of 2011, it was 121 crores, and in 1951 the population of India was only 36 crores. In such a densely populated India, if the Coronavirus is infected, the victim’s father will not be able to work. The disease spreads very quickly. Millions of people in India are still unaware that there are bacteria, viruses, or fungi behind every infectious disease and that these germs are thousands of types of fungi and viruses.
Coronavirus in the United States:
A conference was held in February 2020 to discuss how the Coronavirus could spread to the United States. According to that, between 160 million and 214 million people could be infected with Coronavirus during the outbreak in the United States. The epidemic could last from a few months to a year and could kill anywhere from two million to seventeen million Americans in a one-year lifespan. Also, about 2.1 million people in the United States will need to be hospitalized in a year or so. There are currently nine million twenty-five thousand hospital beds in the United States that cannot cope with the disease. America has already started planning to fight this disease, and we call it proactive planning in the language of management. The above figures may be exaggerated as the United States has already begun cracking down on the spread of the disease.
But one thing is for sure, the travel and tourism industry around the world has suffered the most as a result of this epidemic. Railways, bus services, airlines, hotels, restaurants, entertainment, tourist guides, travel business, are stagnating in this industry. Now the news is that shopping malls, theatres, schools, colleges have also been closed in some places. The virus is so new to humankind that it cannot be said with certainty that it will disappear in the summer. It may even be long-lived.
Fuel oil price shock:
A shock similar to the Coronavirus has caused the world to see fuel oil prices fall below 40 dollars(per barrel). India will undoubtedly benefit from it, but that benefit will not last long. This will benefit the Government of India. Indian consumers will not benefit from this price reduction. The financial crisis hit the United States in late 2007 and 2008. In comparison to that, the Coronavirus is natural, while the reduction in fuel oil prices has been made by Saudi Arabia to suppress and subdue Russia. Russia’s economy is based on about 30 percent of crude oil prices, while the United States is not only self-sufficient in fuel oil but also exports fuel oil.
If we compare the US financial crisis in 2007-2008 with the current crisis, the following issues arise. An important point to remember is that once infectious diseases and financial crises begin, both spread at lightning speed and wreak havoc on the world.
Points of Comparison:
- The financial crisis of 2007-2008, past and present Coronavirus crises (infectious diseases and a dramatic drop in fuel oil prices) have ‘brought down’ stock markets. Of course, the stock market plunged 59 percent due to the financial crisis of 2007-2008 in the US and the world, while it has fallen by only 20 percent in the current crisis.
- The crisis of 2007-2008 was related to the crisis of banks’ mortgage loans. It was a test of the financial system in which the American financial system was artificially inflated to inflate the housing mortgage market. The crude oil crisis is not a financial crisis. However, its severe financial consequences will be known in the future. It is possible to have. Very serious consequences of the previous swine flu and SARS epidemics
- Assessments of the 2007-2008 financial crisis were already available. Asset prices were falling before subprime mortgage borrowers failed to pay installments. Some economists also predicted this crisis in which Prof. Raghuram Rajan also has a prestigious name. In comparison, there was no warning of a human-made fall in crude oil prices or the Coronavirus. Due to the rapid air traffic, it spread from Wuhan, China, to other places in a few hours or days.Nowadays, it is possible to reach from Mumbai to London in just eight to nine hours, and in 15 hours, one can reach New York nonstop! So, the epidemic can spread to other countries in the same number of hours. A COVID patient can infect a healthy person in just five to ten minutes! Even if the patient is not really on the spot, if you touch his handkerchief, you can get sick. In this disease, you do not already get any warning. The crash of stock market prices caused the Great Depression of the 1930s (actually 1929) in the United States, and then the banks went bankrupt.
- You never know how long the financial crisis will last. Finance has taken over the world. Our experience is that any infectious disease lasts only six months or a year, and its severity decreases even during that year. Flu and plague infections had a similar cycle. It is unknown at this time what it will do after leaving the spot. While the financial downturn lasts for years. The acute respiratory infectious disease (SARS) of 2003 has spread around the world. It did not prove to be very harmful. Swine flu and Mad Cow disease also did not prove to be extremely devastating.
- Due to the current epidemic crisis, industries around the world will face a cash crunch as factories, offices, other companies, airlines, etc. will have to close for some time. As time goes on, it is only natural that there should be an immediate financial crunch. An estimated 10 to 15 percent of industries will face a cash crunch. During the financial crisis of 2008-2009, the US government helped billions of dollars (e.g., General Motors) to help the then sinking companies.
The governments of many countries will not do so in this crisis. Only the bank will reduce the rate. If the bank rate has reached zero in many European countries, the bank rate cannot be further reduced. After all, all we can do is to pray for the better future of the world!