BVI News

COMMENTARY: The economic fallout from corona

By Dickson Igwe, Contributor

With the coronavirus outbreak, the best countries can do for now is to expect the worst, but hope for the best.

OK. Corona has wiped $2.5 trillion from the value of global stocks. This is despite central bank intervention earlier this week. The world’s most powerful central bank, the New York-based Federal Reserve, lowered rates days on Tuesday.

Downward spiral

The markets appeared to rebound. However, markets have continued the downward spiral as Corona continues to spread. Then Bond Yields, a marker for economic growth and a pointer to recession, have also fallen precipitously. The west is not yet in a recession.

However, a recession is expected by pundits. And sadly for the Caribbean, the world tourism industry, the Caribbean’s ‘bread and butter’, has taken a massive hit.

Airlines are cancelling flights to specific countries – especially in East Asia. Some airlines have already collapsed. The cruise ship business is deeply worried.

Hotel and restaurant bookings are down throughout Europe. Jobs are being lost, and businesses are going to the proverbial wall. World leaders are in denial. In the USA, Corona was unexpected.

Real hardship

The virus has started to spread there. And in both the US and UK economies, the supply-side economy has dis-invested in national healthcare over many years. For the USA, the middle classes, and those uninsured, a Corona outbreak will bring real hardship, with medical bills running into the thousands and even tens of thousands of dollars.

In a country where half the population lives from paycheck to paycheck, Corona could put many families in dire straits and impact public and consumer confidence.

The great question is how long will this crisis last? Estimates vary. The optimists expect the crisis to subside in two months. After that, the world economy will begin its lift towards growth, that has temporarily been frozen.

Unsure

As fear and concern disappear, business and consumer confidence will be enough to return the world economy to grow. Sceptics like this Old Boy are unsure. No one knows how Corona will pan out. So all assertions based upon speculation, and not based upon hard science are invalid.

The best one can do in the present circumstances is to simply ‘batten down the hatches’ and place hygiene at the top of the priorities list, and hope this virus disappears. Pessimists see a prolonged crisis that will see hundreds of millions of people around the globe infected with a hundred million deaths.

The world economy will plunge into a long recession that could eventually become a depression, as the world economy, with broken supply chains, and whole countries shut down, plunges over the precipice. This will be a recession without end, unlike 2008 which was man-made.

No one knows how this virus will behave. Already there are reports of a second strain. With corona, the end of the crisis will depend on a vaccine being discovered, and then made swiftly accessible to the global public. Consequently, and as of March 2020, anyone who states the worst is over, is in delusion.

Copyright 2020 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.

15 Comments

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  1. LOL says:

    This old boy is spouting more unfounded nonsense. He is definetely a glass half empty guy!

    Like 7
    Dislike 19
    • At least no racism this week says:

      What is the basis for saying that medical bills will be tens of thousands. If the virus continues, people will be told to stay at home and sweat it out or die. They won’t be in hospital.

      Like 5
      Dislike 4
  2. systems says:

    THE HEADLINE: is it the beer or the virus??

  3. Weekly f**t attack says:

    The racist **t genius is once again spouting to his audience of 2 his lack of any knowledge whatsoever. The lack of comments clearly shows censoring comments once again. Anything more to say about the bag of wind is a waste of time and better spent having a bowel movement.

    Like 11
    Dislike 16
  4. @ weekly f--t attack says:

    You are addicted to Igwe’s articles- but your are such a racist hypocrite you are afraid to see that. You need to visit Igwe and KISS HIS A**- that is clearly what you were designed for

    Like 18
    Dislike 3
    • @weekly says:

      Another Belonger genius. Amazing your able to read the fat mans commentary. By the way smart man perhaps they didn’t teach you in the wonderful school system the difference between “your” and “you’re”. What an ignorant bastard.

      Like 2
      Dislike 3
      • Boomerang to @weekly says:

        Any you typed: “Amazing your able to read….”

        “Smart” people like you are very good for amusement. Keep it up.

      • @@weekly... says:

        it seems the racism is coming from your corner. Pls keep your limitations to yourself. This behaviour has no place here!

  5. A Human Condition says:

    Typical “white,” heartless, callous, selfish, hateful, evil and Black human haters.

    Gauraunteed, if Mr. Igwe was “white,” he and his coloum would not be receiving the weekly personal hatred it receives. That is a fact!

    In fact, it would be lauded as a great contribution to the upliftment of this “backward, corrupt shithole,” as their narratives and hypocritical views often state.

    See, being a Black man and demonstrating intelligence go against their desire of what they want him to be and what position in society he should really occupy.

    His coloum should be praising and uplifting them, their values and virtues. If that was the case he would not be called racist, but a great man.

    They are mentally crippled with fear of a strong, big, intelligent and intellectual Black man.

    Like 14
    Dislike 1
  6. @weekly f**t attack and Lol says:

    You have brought the world of Mussolini type populist demagoguery right into paradise. Diseases of all types do spead, ufortunately.

    Why do you fear and abhorr the intelligent and intellectual Black male mind?

    Like 10
    • Racists Everywhere says:

      It is a problem with racists everywhere. The minute a black man writes or asserts any matter that presses on their prejudices these racists erupt with all sorts of nasty and belligerent assertions. It is so easy to get them going. That is why the can’t mix and only feel comfortable within their white comfort zones. They are really very insecure people.

      Like 6
      Dislike 1
  7. Diaspora says:

    The US has the number one economy in the world with China nipping at its heel. Its stock market is highly psychological and reacts to a myriad of events; the latest event is the uncertainty of Coronavirus that is causing the stock market to tank. The US presidential position is viewed as the most powerful leader in the world; the rest of the world looks to the US leadership and follows its lead.

    However, in regards to Coronavirus, the US has been sending mix messages, not strong leadership. The Executive branch and the medical professionals do not seem to be on the same wavelength, causing the market to rattle and tank, resulting in Federal Reserve Bank having to intervene to mitigate the slide.

    Politics is the animating force that is driving the uncertainty. The Coronavirus is a crisis and the US is struggling as to how best to manage it. It is not one of the US finest hour. If the uncertainty and the down playing the seriousness of the virus continues and not recognizing the urgency of the crisis, the market will continue its downward slide. When the US economy catches a cold, many countries, including the VI, catches walking/working pneumonia. Tourism is 1/2 of economic twin pillars with most visitors coming from the US. Consequently, if the Coronavirus causes Americans to stay home, the VI economy and service delivery will probably suffer.

    Fellow VI residents take the necessary precaution measures to protect yourselves and your families against this virus.

    • @Diaspora says:

      @Diaspora, stop being politically correct and call a spade a spade. It is an open secret that you were referring to the current President of the US Donald John Trump who is more interested in the stock market than dealing with the urgency of the Coronavirus. He has hitched his re-election wagon to the stock market. That is why there is mixed messages from his administration on Coronavirus and he is not offering a full throated support to advice of medical professionals.

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