The Massive Corona Impact: Are We Heading To A Global Recession?

This post is a part of YKA’s dedicated coverage of the novel coronavirus outbreak and aims to present factual, reliable information. Read more.

It all started from the ‘Wet Market‘ in Wuhan, which sold both alive and dead animals to the public. This market is assumed to be the epicentre of the disaster. The epidemic in question, which emerged from China and shook the world, causing an undisclosed number of deaths, is known by the name Coronavirus or COVID-19.

In this article, instead of focusing on the causes of COVID-19 or how it spread to different countries across the globe, the focus is on the impact of the virus on the business world.

Temporary Shut Down Of Manufacturing Units In China

China is the centre for mass production for the majority of the companies which look to achieve economies of scale. Since the spread of Coronvirus has caused the population of China to restrict their outdoor activities, basically trapping them inside their own homes, it has led to a sudden and steep decline in their production capacity. As a result of this, a lot of companies are facing problems to fulfil the demand of the consumers. Coronavirus has disrupted the supply chains throughout the global economy, causing unrest among the various MNCs.

Microsoft has announced that it has cut their sales projections for Laptops and Tablets since their production has been severely hampered.

Apple’s manufacturing partner in China, Foxconn, is facing delays in meeting their production targets due to lack of labour turnover and high absenteeism.

Apart from these companies, others, including Nissan and Hyundai, have temporarily closed their assembling plants as factories in China are facing difficulties in supplying them with parts required to make their products.

The Tourism Industry

The spread of the virus has caused not only a change in the behaviour of the customers but also that of different companies as attempts are being made by them to avoid the infection as much as possible.

Consumers and producers are avoiding international trips. This has resulted in a cut in the growth forecast by MasterCard. Amazon and Nestle are some of the companies that have suspended their employee travels. Due to a drop in demand for flights to Europe and Asia, several American flights to these continents have been cancelled. The travel restrictions, along with the safety concerns, have drastically affected the overall tourism industry. According to travel analytics company Forward Keys, outbound travel from China to Europe fell by 41.7% in the three weeks following travel restrictions.

With India temporarily suspending visas to people from China and foreigners who had visited China, restrictions on travellers from several other affected countries, and new cases emerging in Europe and the U.S., leisure and business travel, both incoming and outgoing, has taken a hit.

The Global Economy

The Chinese economy has been drastically affected by the COVID-19, but it is not the only country facing this difficulty. Europe is experiencing an increasing number of identified Coronavirus cases, which has the members of the European Union on high alert, and the same holds for the United States of America. The spread of Coronavirus has affected the global economy, and it is going to get worse unless the virus is controlled.

According to data collected by the Chinese statistics agency and an industry group, the Monthly Purchasing Managers’ Index fell to 35.7 from January’s 50 on a 100-point scale on which numbers below 50 indicate activity contracting.

In Cambodia, textile factories rely on China for well over half their raw materials, and some could be forced to close. In Australia, a significant chunk of exports—from iron ore and liquefied natural gas to meat and seafood—go to China. With the Chinese economy slowed down by COVID-19, orders are taking a significant hit.

Stock markets around the world plunged again on 28th February. On Wall Street, the Dow Jones index had taken yet another hit and closed down nearly 360 points. The index dropped more than 14% from a recent high, making this the market’s worst week since 2008, during the global financial crisis.

In Europe, economists had forecasted that global growth would slip to 2.4% this year, the slowest since the Great Recession in 2009, and down from earlier expectations closer to 3%. For the United States, estimates are falling to as low as 1.7% growth this year, down from 2.3% in 2019.

But if COVID-19 becomes a pandemic, economists expect the impact could be much worse, with the U.S. and other global economies falling into recession.

The Chinese Economy

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The Chinese economy has already started to show the effect of the virus outbreak on the annual GDP. According to several forecasts, China will continue to bear the losses of up to 2-4 percentage points per quarter. The consumption and output have already been hit, which is evident by the statements of companies like Adidas and Nike, whose significant revenue-generating market China has been tumbled roughly by 85%.

A survey of 1,000 SMEs conducted by two Chinese universities found that unless conditions improved, one-third of the firms would run out of cash within a month. Another study of 700 companies found that 40% of private firms would run out of money within three months.

The economy is practically on a halt with the metro traffic as low as 90% when compared to the last year; coal-fired power plants are not firing on all four cylinders, let alone on all eight. Now it all depends on how quickly the measures are taken to control the virus. Oxford Economics said it still expected the impact of the illness to be limited to China and have a significant, but the short-term impact, bringing world GDP growth just 0.2% lower than January at 2.3%.

This is not the first time that China has faced this kind of trouble. In 2003, another corona-virus, Severe Acute Respiratory Syndrome (SARS), which lasted for eight months, disturbed the Chinese market for the short term. Optimists believe that the behaviour of the market is thus temporary, and it will be restored by the second quarter.

Another reason why it is unfavourable for the Chinese economy to incur losses, in the long run, is the rapid expansion of their digital economy. Of the total retail sales, 35.3% amounts to online purchases. Mobile internet penetration is very high and rising, and China is currently the leader in possessing the most advanced mobile payment systems.

All of this points to a massive potential for the Chinese economy to tap into the digital market, especially into existing scenarios where major cities are in lockdown, and the movement of the citizens is restricted. With the rise in digital opportunities, employees will be able to continue performing their jobs via work from home with the help of various online platforms.

The Indian Economy

The Indian economy was already trying to recover from the slowdown, and now the Coronavirus outbreak has reduced the chances even more. The supply chains and import-export between countries across the world have been drastically affected. Unfortunately, India is amongst those countries. Despite China being India’s competitor, the economic slowdown in China has turned out to be unfavourable for India.

This is because China alone accounts for 18% of the total imports by India. India imports electrical components, pharmaceuticals, automobile components, plastic goods, etc. from China.

Since China is not able to meet these demands, India is forced to find alternative countries for these imports like Japan, South Korea, Germany, but these countries, too, are not perfect substitutes for all the imports. The electrical industry has taken a hit as individual parts cannot be imported from China, and it is not possible for India to manufacture these parts themselves in such a short period.

Indian exports are also being affected by the spread of Coronavirus as imports from China are temporarily on a halt, procurement of certain parts which are required for the shipping of finished goods has become an obstacle. Other than that, China accounts for 9% of the total export, and out of the total petrochemicals produced in India, 34% of it is exported to China. With a sudden drop in the demand for consumer goods, this export market has fallen.

Apart from import-export, the tourism industry has slowed down as people are refraining themselves from going to international trips, especially to Asian countries.

Stock markets across the world have remained highly volatile in the last many days. In India, the 30-share BSE barometer on 2nd March closed 153.27 points or 0.40% lower at 38,144.02, and the broader Nifty closed lower by 69 points or 0.62% at 11,132.75. The Sensex has fallen nearly 1300 points from highs.

On the other hand, if the Coronavirus outbreak affects the Chinese economy in the long term, possibilities are that the MNCs will start looking for alternative countries for their supply chains, and this opportunity could be grabbed by the Indian manufacturers to reduce unemployment and foster industrial growth.

Irrespective of the pros and cons, Coronavirus outbreak should be controlled as soon as possible or else the situation will get a lot worse and could possibly lead to a global recession.

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An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

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A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform Change.org, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on Change.org has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in Change.org’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

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