Coronavirus threats to world economy. Coronavirus global economy impact. The coronavirus has not yet be officially acknowledged as a pandemic health risk. However it probably is already a pandemic health risk and is certainly a global economic pandemic spreading uncontrollably around world.
Although the world financial markets have had their worst time since the financial crisis in 2008 the actual impact of the coronavirus has yet to be felt and revealed. The financial markets are giving a glimpse into what is feared in future not what is happening now.
With just 36 cases in the UK it appears that the UK is relatively spared from the virus. The most worrying case out of the 36 is the one where the infected person has not been abroad and has not been in contact with anyone who has to his or her knowledge. Tracing the source is key to controlling and containing the spread of the coronavirus.
Many countries where the official numbers of coronavirus infection cases are so low is worrying
There are many countries where scepticism on figures inflates fear of a pandemic that may not be recoverable. China where the coronavirus originated from may have be slow to unveil the seriousness of the problem have been praised by World Health Organisation WHO for honest figures.
Some countries have different reasons to deliberately suppress news of an epidemic in the country. In addition there are countries which may not have the resources to identify the coronavirus. More worringly they also do not have the resources to stop the spread of the virus.
Other disasters in some parts of the world also have the potential to exasperate and accelerate the spread of the virus. What happens if the coronavirus infects refugees and economic migrants trying to escape to Europe via Italy Greece Bulgaria and Spain. Germany not long ago took around one million of these people. If such numbers flowed again and they also had the coronavirus how much more quickly would the coronavirus spread throughout Europe? Exponentially fast!
Control of coronavirus COVID19 is unlikely especially as there is no vaccine
A vaccine by most estimates is unlikely to be identified until early 2021. Even when a vaccine has been found it then has to be manufactured in sufficient quantities to have a reduction in the spread of the virus never mind eliminated.
The coronavirus is likely to be with us until end of 2021 at the earliest never mind getting coronvirus spread under control this year.
Major sporting events like the Olympics this summer are unlikely to proceed. Whilst this creates obvious disappointment for the athletes supports and Japanese people it in one event creates massive economic loss for Japan Olympic sponsors and lots of products or services will not be sold if the Olympics is cancelled.
Businesses will face reduced performance at best and potentially even collapse
If you are not able to sell products or services how do you pay fixed costs never mind variable costs of being in business. Potentially fatal could be loss of the ability to pay your creditors who may close you down to try to get their money back.
Central banks around the world have yet to realise they have not recovered from the financial crisis in 2008. Their tools to tackle global recession including lowering interest rate and increasing quantitative easing QE are worn out. There is little manoeuvrability for central banks. In COVID19 terms central banks do not have very good vaccines left at their disposal to support economic growth.
Individual countries will undoubtedly fall into a recession due to the coronavirus COVID19
Countries like Italy already severely impacted by coronavirus were already teetering on the edge of recession. The coronavirus will push them over the edge. The northern part of Italy is the powerhouse of the Italian economy and much of it has already been shutdown. Can Italy really stop the spread which will make economic impact worse?
Even countries like USA can dramatically lose economic growth. Not all Americans have good access to healthcare services. If you cannot call upon your healthcare services to detect and help control the coronavirus spread then it could spread like wildfire in USA if it takes hold and it is close to taking hold now.
The coronavirus spread in poorer less developed countries is essentially unstoppable. How can parts of Middle East Africa Asia Central America and South America really contain spread of coronavirus. The how do you contain the spread from these areas to more wealthy parts of the world.
The economic impact is going to be so severe as it hits not just the supply side of the economy it cuts demand too
When disaster strikes businesses can stop supplying cause the risk event stops output abruptly. However the coronavirus dramatically cuts demand quickly too. People stop assembly in public in restaurants events bars concerts sporting events etc through fear of catching the coronavirus. They may start spending again when under control but we are looking at end of 2021 before this even has possibility of subsiding.
Other concerns include lack of scientific knowledge about coronavirus. The boffins do not know enough yet to be sure we will ever get this under control.
- We do not know how long the virus can survive on surfaces when people cough or touch surfaces with contaminated hands.
- We do not know if our normal ways of cleaning surfaces works on coronavirus.
- There have been suggestions that people who have had coronavirus in recent months and recovered then contract virus again. Potentially not only will infected people not be immune in future but then may not be cured in first place or regenerate virus.
- Many people across the world including the UK will now be thinking they have a mild illness or seasonal flu when in fact they have COVID19. When it can be contained you are tracing contacts to track down infection line to control risks. However when COVID19 is spreading unencumbered mildly infected people will be spreading virus unknowingly and then 80 percent infection across the UK and world starts to become realistic.
- We do not know if the warmer weather will help the world to control the spread of the virus like it did with SARS or whether it will continue to spread.
- We do not know if COVID19 will morph into something worse or morph into something less virulent.
Some estimates suggest that 80 percent of people in UK will contract the coronavirus COVID19 if it spreads uncontrollably in UK. The UK could well be on cusp of uncontrollable spread as the UK government gears up to act this week. On the positive side 80 percent of those who contract the virus only get mild manageable symptoms. On negative side a fatal rate of even 1 percent of UK population is still around half a million deaths.
One way some countries may manage the coronavirus risk is simply to let it spread across the whole country without stopping business activity or economic growth. If 80 percent have mild symptoms and 1 percent die what is their tolerance of risks. Will they chose economic slowdown or losing 1 percent of their population? This could mean the rest of the world suffer boomerang epidemics. What could make this less likely is that leaders can die of the virus just like their peasants!
Safety at work and managing health and safety of your workforce
Employers have a duty to take reasonable steps to protect their workers. This includes protection from exposure to coronvirus. This has obvious implications about travelling to coronavirus hotspots but also includes the coronavirus coming to your workplace. The coronavirus could change forever how we do business in future. If and when the spread of the coronavirus is brought under control we may find it more sensible to have less contact face to face and more online communication.
Ocado in UK who deliver to more wealthy customers have already announced a jump in the number of people ordering online for food and drink delivery to home. This is just one example of winners as well as losers from COVID19 outbreak.
BusinessRiskTV
We are in the foothills of the coronavirus pandemic. Yes it is a pandemic despite WHOs caution. How you manage the risks to your business will have limitations but where you can control the risks you must start implement your business continuity plan now not when when a full blown pandemic is sweeping across the world.
Subscribe to BusinessRiskTV for free alerts bulletins and reviews on business risk management to your email inbox
Promote and market your business on BusinessRiskTV for 12 months
Put your business products or services in front of new customers already interested in your type of business offering before your competitors do.
Link into your existing sales process directly from BusinessRiskTV or use our eCommerce solutions to increase your sales cash flow and profit
Increase the sources of your review streams more sustainably. Grow your business faster with BusinessRiskTV
#BusinessRiskTV #Coronavirus #Covid19 #CoronavirusBusinessRisks #CoronavirusRecovery #Covid19Recovery
