NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

By Opeoluwa Runsewe

It is no news that the outbreak and proliferation of Covid-19 have had some of the most acute implications on global economies in recent times; the vast majority of private and public institutions have been put on edge and are being forced to mitigate these unforeseen contingencies by adopting the swiftest and most dynamic mechanisms.

Gradually, the virus has spread to 188 countries, with it’s ramifications cutting across all demographics. According to verified data by John Hopkins University in the United States, as at July 16th 2020, more than 13.5 million cases and 584,000 deaths had been reported; Schools, businesses and airports have been closed, restrictions on movement and large gatherings have been enforced, and one too many businesses have been obligated to urgently close shop regardless of the concerted effort by governments and health care professionals to curtail the rate of infection. However, it remains largely uncertain and highly debatable as to whether the recently imposed restrictive measures will be totally terminated in a bid to ensure that economic activities can imminently reach full potential. According to the IMF, the global economy will shrink by 3% this year; in what is described as the worst decline since the Great Depression of the 1930s.

The effects of restrictions on countries expectedly differ. The availability of universal healthcare, digital devices, access to data, digitalization of systems and processes, good and affordable broadband internet service, financial inclusion, social prosperity and other proactive measures have been consequential in countries that appear to attenuate the enormous economic impact. For instance, the central banks of several countries have successfully slashed interest rates alongside other Fiscal and monetary policies, all in an effort to encourage borrowing and spending. These measures have however proven to be some of the most feasible ways to theoretically boost their respective economies. The UK, Germany, Italy and France are some of the countries that have furloughed government-supported job retention schemes extended to the millions of people that constitute their work-forces.

Photo courtesy of Erik (HASH) Hersman.