The Covid-19 pandemic is a set to disrupt every aspect of society – for better or worse. Say goodbye to life as you know it
SINGAPORE (April 17): It was not too long ago when many in Singapore held the belief that the year 2020 would end the way it began — peaceful and full of promise — before the Covid-19 pandemic took over and turned lives upside down.
At the beginning of the year, geopolitical concerns — which seemed so far away — took centre stage. A resurgent China was flexing its military muscle in the South China Sea while Russian bombers tested NATO’s airspace in the North Sea. The assasination of Iran’s top intelligence commander by the US in January and Iran’s subsequent retaliation shook financial markets, although the incident eventually de-escalated.
Attention quickly shifted to the signing of the Phase One trade deal between the US and China on Jan 15. Both countries finally agreed to a truce after imposing trade tariffs on each other’s goods worth hundreds of billions of dollars over the last two years. The Dow Jones Industrial Average closed above 29,000 for the first time at the news and things were looking up. Investors thought perhaps the decade-long bull run on Wall Street would still have legs.
Going viral
Then the novel coronavirus struck. The first such cases were reported in Wuhan city in late 2019. This was initially covered up by China. But by mid-January, as the number of people infected grew exponentially in tandem with the number of deaths, China aknowledged it had a major problem and initiated a complete lockdown of the city and restricted movements in many parts of the country. This brought economic activity in the world’s second largest economy to a standstill.
China’s extreme measures seemed to have worked. The number of new infections and death toll there have reportedly declined. Lockdown measures have also been eased and businesses are starting to resume normal operations.
Unfortunately, Covid-19 has now gone global. On March 11, the World Health Organization (WHO) declared Covid-19 a pandemic, after the virus spread to Europe and the US. Quickly, the epicentre of the pandemic shifted from China, South Korea, Japan and even Singapore to the US, Spain, Italy, France and Germany. As of April 13, there were 1.8 million people infected and over 110,000 dead across more than 200 countries and territories, says WHO.
‘Worst’ since Great Depression
On April 14, the International Monetary Fund (IMF) warned that the economic slump from the deadly coronavirus will be the worst since the Great Depression of the 1930s. The organisation also expects “The Great Lockdown” pain will far outstrip the credit crisis of 2008-09.
Until the Covid-19 pandemic, the recession triggered by the Global Financial Crisis (GFC) of 2009 had been the biggest downturn in the post-Second World War period.
In an IMF blog post, top economic adviser Gita Gopinath says the pandemic will also result in a fall in global output of more than US$9 trillion ($12.5 trillion) this year and next. The lost wealth is greater than the economies of Japan and Germany combined, adds Gopinath.
Gopinath and her team expect the world economy to shrink 3% this year. The US economy, the biggest in the world, is expected to shrink by 5.9% while China is expected to see a fall in growth to 1.2% this year from 6.1% in 2019, and to hit 9.2% in 2021.
“The magnitude and speed of collapse in activity... is unlike anything experienced in our lifetimes,” writes Gopinath. “This is a crisis like no other. There is substantial uncertainty about its impact on people’s lives and livelihoods.”
If the pandemic is brought under control in the second half of the year and governments avert large-scale bankruptcies and job losses, then global growth could rebound in 2021 to 5.8%, says IMF.
Curbing Covid-19
In the bid to slow the pandemic, many countries have implemented restrictive measures of varying degrees and varying names — Lockdown, Movement Control Order (MCO), circuit-breaker measures, safe-distancing, stay home orders and curfew. In Singapore, workplaces of non-essential businesses have also been ordered to close. As a result, the CBD area became a ghost town. The always busy Changi Airport for once emptied out as planes were grounded in response to border controls that restrict the entry of travellers.
More importantly, these measures have forced people and businesses everywhere to adapt. White-collar workers lucky not to be retrenched found themselves working from home via the internet and video conferencing has become the medium of communication between colleagues and clients.
Schools have also adopted what is known as home-based learning. Classroom lectures have gone online where lessons are taught through Microsoft Team or Zoom.
Meanwhile, e-commerce has seen a significant surge in activity. As most non-essential retail shops are closed, much of the buying and selling have shifted online. And although businesses offering essential services such as supermarkets and pharmacies remain open, many have opted to shop online.
Similarly, food deliveries have seen a major uptick too. While local F&B outlets can choose to remain open, dining-in is prohibited IMF and only takeaways are allowed. And the door-to-door delivery service provided by online retailers and F&B apps have only served to drive more sales online.
Events have also gone virtual. Forums, conferences, AGMs and even religious services are now conducted online. For entertainment, people are starting to exercise, cook, eat, play and indulge in their hobbies together via livestream.
Thus far, a Covid-19 vaccine has yet to be synthesised and the restrictions imposed all over the world show varying degrees of success. In fact, some countries have opted to extend these measures for a little while longer. France has extended its lockdown until May 11 while Malaysia also extended its MCO by another 14 days until April 28. And even after these measures are rolled back, it may take a while for things to return to the state they were before the pandemic. Additional precautions may also be required to prevent a second wave of infection.
Ironically, embracing the disruptive technology that threatens to steal jobs from humans have also enabled us to overcome some of the inconveniences brought about by the Covid-19 crisis. And as the saying goes, change is the only constant in life, and Covid-19 is this unwanted catalyst for change — whether we like it or not.
