Prospective Economics of the Pandemic and PREVISION.

Well! Well! Well!.. But there is nothing going on well right now. Neither for me personally nor for the society and the world at large. The COVID-19 the deadly virus is hitting all over the word, breaking through all the barriers. I wrote about this earlier in my previous blog also. But thought of do some addons. Im looking at this from another point of view and gonna make some prediction. For that we have to go back in the time and look into some details.

As we all know there has been a war for claimed to be the worlds post powerful nation. It has been happening since beginning of the timeline. But over the years way of get into endorsing that has been changed. In early days the nations used to showcase their power by invading the other countries, nations. Going into war, spilling blood by bombing a whole country leads to masscre and the effect of it will be lasted for decades for over many generations. But since 1945 after the great masscre happened in World War II all around the world ,many nations understood the damage they have caused to each other. So they changed their strategies gradually.

They turned into more diplomatic strategies to establish their power over the other nations. Forming alliance with parallel powerful nations . Getting into new Political and Trade Agreement, Memorandum of Understandings, Economical Agreements, Official government visits in each others country, Investing in other countries etc.

Guess who has been leading the front since then? Hell yeah!! The United States of America. So here are some facts i collected so far

1. After World War I in 1914-1918 USA sorted out a way to become the powerful nation in the world by forming “League of Nations”.

2. America made a huge contribution to defeat the Germany, Japan, Italy(Axis Nation) in World War II during 1939-1945 . And they convinced that what happened to anyone who messed with them by dropping two Atomic bombs (Little Boy, Fat Man) to Japan and completely knocked them down.

3. In 1945 America led the front to form the United Nations

4. Since World War II drew to a close in the mid-20th century, the Cold War Began, between the world’s two great powers–the democratic, capitalist United States and the communist Soviet Union–against each other. Beginning in the late 1950s and dragged till 1989. And again they changed their strategies. This time the “space” became another dramatic arena for this competition, as each side sought to prove the superiority of its technology, its military firepower and–by extension–its political-economic system.

5. In 1989 America and other lead nations broke down the “Berlin Wall” and put a stop to the cold war between Russia after many heated moment around the world by coming to agreement and once again claiming they are the number one.

6. After late 90s as a result of the Globalization and Industrialization all the powerful nations moved to inventions, updating new technology, improving information & telecommunication technology etc, instead of going to a war with each other. As a outcome of this many nations rose up as such America, China, Russia, Germany, India, North Korea, Great Britain, France, Japan instead of sole world leader indicating to the whole world there is no one can play as their wish.

Even after all of these things none of the above mentioned nations didn’t stop investing in their Military power, not even for a moment. Because all of them are aware even though everyone is following up soft power policies if the time comes they must be ready for a war. Hence they have been strong arming their Military Power. And America has the worlds biggest Military budget ,more than the other below mentioned nine countries’ budgets combined. Because after the Space war they turned 75% of their Space budget allocation into Military budget.

Top 10 powerful Military Countries as of 2020

(Roughly Estimated and could be differs based on the concerned elements)

1. United States of America
2. Russia
3. China
4. India
5. United Kingdom
6. France
7. Germany
8. Turkey
9. South Korea
10. Japan

For further reference

https://www.geopolitica.ru/en/article/10-countries-strongest-armies-world

https://www.businessinsider.com/most-powerful-militaries-in-the-world-ranked-2019-9?amp

Late Space Race/Space War

The Space Race was a 20th-century competition between two Cold War rivals, the Soviet Union (USSR) and the United States of America (USA), to achieve firsts in spaceflight capability. It had its origins in the ballistic missile-based nuclear arms race between the two nations following World War II. The technological advantage required to rapidly achieve spaceflight milestones was seen as necessary for national security, and mixed with the symbolism and ideology of the time. The Space Race led to pioneering efforts to launch artificial satellites, uncrewed space probes of the Moon, Venus, and Mars, and human spaceflight in low Earth orbit and to the Moon.

China Becoming a leader of world economy

China used to be a Isolated country used to beaten down from foreign nations. It took China less than 70 years to emerge from isolation and become one of the world’s greatest economic powers. Over the past 40 years, China has introduced a series of landmark market reforms to open up trade routes and investment flows, moving into mass level of production specially the technical aspects by using strongest element of their nation, the “man powerultimately pulling hundreds of millions of people out of poverty. As a result of that China became the 2nd most powerful economy by surpassing over Japan for the 1st time in the history who had been in that position for so long.
And with One Economic Policy (OEP) of China, they have been trying to surpass traditional leader America.

Glance of COVID – 19

On December 31, 2019, the World Health Organisation’s (WHO) China office heard the first reports of a previously-unknown virus behind a number of pneumonia cases in Wuhan, a city in Eastern China with a population of over 11 million. The WHO has declared a global pandemic over a new coronavirus which causes an illness known as COVID-19.

However China ,the place where all started have controlled the pandemic tremendously. Almost 90% of their infected patience have been cured. They are slowly lifting up the lockdown around the country. There is no longer new cases can be found in China. They are requesting to come back all of their foreign investors, employees, workers, students who left the country.

As of now 203 countries have reported total infected cases around the world is almost 1000000 and counting and the death toll is almost 70000 and counting and counting.

And worlds biggest Socio-Economic countries as such Russia, India, North Korea South Korea, Japan are doing a great piece of work in terms of controlling the outbreak. They have controlled their death toll into a great deal. North Korea claims almost no coronovirus cases regardless of how they controlled it.

On the other hand the worlds biggest Capitalize Economics like America, Spain United Kingdom, Netherlands, Austria, Italy, France, Germany, Switzerland, Canada are in a huge trouble. They didn’t take neccessarry action at the most wanted time.

Effect of COVID-19 to the World Economy

“Apart from the tragic human consequences of the COVID-19 coronavirus epidemic, the economic uncertainty it has sparked will likely cost the global economy $1 trillion in 2020, the UN’s trade and development agency”
– World Economic Forum –

“We envisage a slowdown in the global economy to under two per cent for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September,” said
-Richard Kozul-Wright-, Director, Division on Globalization and Development Strategies

That is just an estimated value. But can you imagine how does that effect to the livelihood of people around the world. All the major economies like America, China, russia, India, France, Italy, Germany, United Kingdom, Switzerland, Spain, UAE, Australia etc are in a either total or partial lockdown. The mechanisms of those countries are being freezed.

Many countries have stopped their Exports and Imports. The worlds biggest airlines like American Airline, British Airways, Emirates, Etihad Airways, Qatar Airways etc have taken a huge bullet since almost many countries have prohibited local & foreign transportations. It will take some time for them to stand up from that position.

Since America is the worlds biggest Debtor Nation all foreign investors who have invested in USA already started to withdraw their capital. And other biggest Creditor Nations like Germany and Japan withdrwing their capital to utilize on their own in this disaster.

Last week, American stock markets posted their biggest losses since the 2008 financial crisis.

China and India are two of the largest manufacturing countries in the world ,have stopped their production. Though China is slowly lifting up theirs lockdown and slowly starting the production. They have already open a part of Great Wall to tourists.

Is that a Biological Weapon?

There have been many biological weapons over the years created by many countries that used in order to get the control over some state or a country by causing them a nightmare.

So the COVID-19 also a one among them? Because even though the virus have originated from a Wuhan seafood market where wild animals, including marmots, birds, rabbits, bats and snakes traded ,the Chinese have been eating those for hundreds of thousands of years. So how did all of a sudden they affected by those?
Yeah i know there could be a natural scientific cause. But lets look little further.

The real question is if it is a man made biological weapon who did invent this. The place where all it started have controlled the virus tremendously. That left a question for us ” How did they?” . I know they hit hard & fast with everything they got. The credit must goes to them. Yet it leaves a question mark!! And also all the Socio-Economic countries seems to be controlling the outbreak in a very good level while all the capitalize-economics have been hitting the rock bottom over and over. Last night America reports highest death toll per day which was 1019. America has always been the controller of the situations. But in this scenario the situation is totally different. Is that something deliberately targetted on Europe & American nations?

Prediction for next few years.

1. Major economies like America, United Kingdom, Netherlands, Italy ,France, Canada, Spain, Switzerland etc. will have to take a step back since their economies are hit rock bottom.

2. One of the Eastern or Socio-Economic countries will come with a vaccine and sell it to the whole world.

3. The prices of all the electrical items such as Mobile Phones, Laptops, Televisions and their accessories will go high since large contribution is done by China & India were being in a lockdown for significant amount of time.

4. Tourism industry have already taken a huge bullet and it will have to remain the same for a considerable amount of time period.

5. America will suspend Green Card for some time

6. Many countries will tight their VISA & PR rules and regulations.

7. India is one of the biggest pharmaceutical manufacturers in the region hence the prices of those medicine will be go high

8. The Duties on Motor Vehicles and other Mechanical items will be raised.

9. Return value of many financial instruments will be dropped. Specially Treasury Bills and Treasury Bonds will be highly affected since the many governments’ mechanism have been stopped.

10. It is safer for not to invest in Financial instruments for some time and save as in liquid cash.

11. But on the other hand if you are looking for a long term investment you can buy off some shares if wait for some time since the share market is still at the early Bear Market. Because it likely hit the bottom and later turn into a Bull Market

12. Non-Monetory investment such as Gold,Silver and Industrial Gold will likely to be stable.

13. Real Estates won’t have a huge effect.

14. Small countries like Sri Lanka will have to increase indirect tax rate for the survival and living cost of those countries will go sky high.

15. Many companies will go for the cost cutting probably by letting go of minor staff or the employees who are in their probationary period specially in low income countries like Sri Lanka.

16. If the things go further south, a recession will be accompanied by an initial credit crisis that causes many financially levered companies reliant on the capital markets to go bankrupt.

17. Countries with middle GDP like Congo, Nigeria, Colombia, Kenya will have a much higher possibility and also in our region countries like Nepal, Pakistan, Sri Lanka will have to face for a credit crisis.

18. China could become new investment safe haven as stocks. (Already Chinese stock market has risen by 10%)

19. China will come real closer or may surpass American economy for the first time in the history even though America has recently injected $2 trillion to their economy from their reserved funds

20. An impeachment is on the way against American President Donald Trump and the Vice President Mike Pence will have a higher probability to win the upcoming Presidental election.

21. Even though India is in a total lockdown they will control the virus upto certain level.

22. Japan, Russia, India will get their advantage and boost their economies while America is being in a set back.

Conclusion

So is that really a biological weapon invented by the hands of men? Thats a BIIIIG a question mark .

If it is a yes. Who did that? As a strategy of winning the economical war By the cost of almost 100000 innocent lives around the world? (As is being estimated by WHO that at least 100000 will be died)

Can we be that cruel? Oh yeah !!Yeah definitely we have been through out the history and we will be remain the same.

The time will provide answers for those questions. We don’t know how the history is gonna be written about this.

Peace Out
(02/04/2020)

Resources : BBC, world Economic Forum, Fobes Magazine,

Ashen Abeyrathna(Lecturer-International Relation)

Yasitha Randil (B.Sc Finance. USJP Sri Lanka)

12 Comments Add yours

  1. thattayagekolama.blogspot.com says:

    A wide,discretional explanation. Keep it up! I’m really proude about you!

    Liked by 1 person

    1. malindakavih says:

      Thank you very much. Appreciate your time uncle 😊😊

      Liked by 1 person

  2. erangianne says:

    Great Blog Malinda!! Really have lot of information i didnt aware of.

    Liked by 1 person

    1. malindakavih says:

      Thank you very much

      Like

  3. Asanka Saliya Bandara says:

    Great blog Malinda.. keep it up..👊🏻👊🏻👊🏻

    Liked by 1 person

    1. malindakavih says:

      Thank you very much

      Like

  4. dharunyanxdx says:

    This is really well written . And Lots of information to digest. Keep it up

    Liked by 1 person

    1. malindakavih says:

      Thank You very much buddy

      Like

  5. Kumudika Perera says:

    It was a good read indeed! Well done!

    Furthermore, I think China would use its “Developing Nation” title at WTO to bounce back to being a rising economy soon. Fingers crossed on that. There was much debate about China’s WTO status in 2019.

    For Reference:
    https://www.scmp.com/economy/china-economy/article/3004873/china-refuses-give-developing-country-status-wto-despite-us

    https://www.eastasiaforum.org/2019/10/15/chinas-developing-country-status-brings-it-few-benefits-in-the-wto

    Liked by 1 person

    1. malindakavih says:

      Hey thank you very much for taking time and reading the post. And yeah as you mentioned as it says on those reference China is a developing country when we concern their Per Capita Income. Cause its a country with a 1.6 Billion people. So obviously their Per Capita Income goes down. But when we concider the elements like GDP, Infant death rate at birth, Death rate if mothers etc China is already a Developed Contry. But as you have mentioned just to enjoy some benefits they hesitate to change their “Developing Country” status. The GDP of China over 14 trillion USD. And just imagine they maintain a military with 2.5M active personnel which records it the world’s largest land force, with a budget allocation of over $200 billion comes 2nd largest military budget after USA.

      Like

  6. Madhavi Silva says:

    Good writing & great findings! I really appreciate these kind of writings, since this includes quite timely & vital facts for everyone to know. Keep it up bro!

    Liked by 1 person

    1. malindakavih says:

      Thank you for taking time and reading the . Appreciate it

      Like

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