Due to this pandemic, the economic slump at both Micro and Macro levels is and will continue to hurt us all for at least 2-4 years. Since the coronavirus outbreak, the World has lost 284,034 lives with 4.2m people infected and 1.5m people recovered. It’s a global disaster, unlike any we have seen before at least in our lifetime. The economic shock is certain. China’s economy was the first one to get a hit and some estimations say that the coronavirus will result in negative 1st Quarter GDP growth for January – Feb 2020 data.
Globally, the slump has the potential to overtake the effects of the two economic recessions of our lifetime; the recession after 9/11 and the one after 2008. Stock markets around the globe have taken a hit. The U.S. stock market witnessed a 20% fall since the pandemic spread. Due to the lockdown in many countries, nearly all the sectors are reporting massive losses. Among them are travel industry, aviation, food industry, entertainment, and hotels, etc., that have experienced the worst hit.
The impact on the economy is going to devastate all the nations of the world until a vaccine is developed or the spread is stopped. We foresee the development of policies that can safeguard the vulnerable in our society from the economic downfall. However, it looks like a tall order as the wealth gap between the richest 1%-5% and the other 99-95% in the U.S. is projected to grow even more.
How bad is it going to get?
This is just the beginning; the fallout is yet to be seen. It all depends on how long it takes to control the spread and even then, second and third waves can hit us. The thing about the economy is that you can’t just reboot it or restore it to an earlier state. Think about the disruptions in buying, production, supply and demand, employment, contracts canceled, and much more. This will have a lasting impact on national and global levels. The glimmer of hope is that governments plan and restructure several sectors and their expenditures accordingly.
Traditionally, Government interventions are discouraged, and the well-being of people is left in the hands of these private corporations. Ironically, as the pandemic hits, it is the government that’s taking the responsibility and spending billions of dollars per day for supporting the unemployed and unhealthy.
Cashless & Card-less Economy
It’s only a matter of time that the whole world economy goes cashless or bill less. Not just because it is one of the major sources for spreading germs and diseases but also because it is convenient and discourages black money and corruption. It’s not just the notes spreading germs. If you think plastic cards are safe, then think again. Imagine a line of customers at a grocery store, an infected customer uses his card on the machine and the rest of the customers in the line are sure to catch the same infection.
This pandemic has made this inevitable change urgent, as many stores are refusing cash payments and only allowing digital. The digitalisation of transactions with only tap and pay for OTC payments sounds like the way to go.
WHO, called cash transmitting Coronavirus a misrepresentation. They recommend contactless payment over cash and gave advise to wash hands after coming in contact with cash or currency notes.
We foresee government efforts ramp up for transitioning from currency notes and cards to digital currencies.
Pros & Cons of Cash-less Economy
Going cashless has some benefits and risks. You won’t be carrying cash and avoiding a security risk. Access would be easier. And for governments, it means a reduction in money laundering and better tax collection. The obvious disadvantages are less freedom and government surveillance as well as personal data loss in case of hacking. Governments can limit, suspend, or even take over your assets for a lot of reasons. Furthermore, dependence on technology is always risky as it can restrict you from carrying out the transactions in case of interruptions or failures.
In this series of articles, we’ll be looking at the changes future will bring after the pandemic;
- Coronavirus Outbreak – Infection Control and Pathogen Transmission
- Healthcare in the Post Pandemic World
- Workplace and employment in the Post Pandemic World
- Society, Culture, and Religion in the Post Pandemic World
- Democracy and Climate Change in the Post Pandemic World
- Media in the Post Pandemic World