Globalization and Its change
Globalization is an organic element of modern economic growth, one of its most important characteristics. However, this does not mean that its shape and pace are unchanged: there are periods of its sharp acceleration, as well as deceleration. Over the past two years, globalization has slowed down, as can be seen from the dynamics of world trade. The coronavirus pandemic has created new tough barriers to globalization: the shutdown of production and the closure of the borders of leading countries and economic groups (Ciotti et al., 2020). It led to the rupture of the usual economic ties, value chains and exacerbated relations between traditional partners.
Coronovirus Pandemic
Coronavirus is a dangerous disease that affects tens of thousands of people around the world every day. The pandemic of the previously unknown coronavirus SARS-CoV-2 is causing SARS COVID-19. The episode of COVID-19 has presented basic wellbeing challenges around the world. The pandemic is one of the most profoundly infectious flare-ups in ongoing mankind’s set of experiences, with in excess of 240 million cases and 4.9 million deaths as of today (WHO (COVID-19) dashboard no date). The quarantine measures associated with it have an impact on the lives of people around the world.
Global gross domestic product (GDP) at current prices from 1985 to 2026
World governments are looking for a way out of a difficult economic situation. The COVID-19 pandemic has produced an organic market shock across numerous nations. Creation, utilization, and exchange designs have been influenced straightforwardly and because of lockdowns and social removing measures. Industrial facility terminations in China, Europe, the United States, and somewhere else have prompted a drop in the inventory of exportable products and disturbance in worldwide worth chains (GVCs) (Espitia et al., 2021). According to forecasts, currencies in most countries are expected to decline by 4-7% per year (Wang et al., 2021). After the announcement of a global pandemic, the approach of the global economic crisis became very tangible. The risks associated with the spread of the coronavirus have negatively affected the value of shares and assets of many companies.
Until 2020, Global GDP had encountered a development consistently beginning around 2010. In 2020, worldwide GDP added up to around 84.54 trillion U.S. dollars, just about three trillion lower than in 2019 (O’Neill, 2021).
The Collapse of Oil Prices
The decline in production activity could not but affect the demand for oil. Demand has decreased, and, accordingly, oil prices have also dropped. The OPEC + countries could not agree on a new agreement on the extraction of this mineral, the price decline began even before the pandemic, and in the process, the cost became negative. The world economy in 2020 is facing an unprecedented business interruption to combat the pandemic, the collapse in oil prices, and the fall in export demand (Mahmud, Ding, and Hasan, 2021). The pandemic crisis led to a significant drop in the currencies of countries that were dependent on the sale of oil. It also led to a record reduction in the real disposable income of the population, an increase in unemployment, a slowdown in consumption and investment, and, finally, according to the authorities themselves, a budget deficit (Mahmud, Ding, and Hasan, 2021).
Managing COVID Pandemic
Today, there are risks associated with uneven access of the world community to vaccines, a surge in pandemic activity in the least developed countries, and the emergence of new strains. In addition, after the rupture and destabilization of supply chains and an imbalance between supply and demand, or rather, some lag between supply and demand, a shortage of some goods arose. Huge indebtedness has accumulated in developed countries and huge corporate debt – in many developing countries (Kerr, 2021). In China, the manufacturing sector has been seriously damaged by the coronavirus. Production activity dropped to a record level of 40 (Kerr, 2021). The pandemic had the same negative impact on Vietnam, Singapore, and South Korea (Gruszczynski, 2020). Due to the pandemic, the incomes of the population have decreased, and some citizens have completely lost their jobs. This negatively affected the retail, aviation, and restaurant business. COVID-19 has had this impact on the service sector in most countries, including Russia and the United States.
Tourism Industry
The COVID-19 pandemic struck the travel industry harshly. Numerous nations and locales have limited developments by forcing boycotts and other tough prerequisites on passage and leave, which has quietly affected the worldwide travel industry. Changes like restarting, revamping, and acclimatizing the travel industry as per the most recent norms and rules are being done to restore the business (Sharma, Thomas, and Paul, 2021). The restoration is affected by the public authority’s reaction in the type of better control of travelers, making some travel industry subordinate nations without visa, and reconciliation of innovation (Ding and Li, 2021).
Reference List
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Ding, A. W. and Li, S. (2021) ‘National response strategies and marketing innovations during the COVID-19 pandemic,’ Business Horizons, 64(2), pp. 295–306. doi: 10.1016/j.bushor.2020.12.005.
Espitia, A., Mattoo, A., Rocha, N., Ruta, M. and Winkler, D. (2021) “Pandemic trade: Covid‐19, remote work and Global Value Chains,” The World Economy. doi: 10.1111/twec.13117.
Gruszczynski, L. (2020) “The COVID-19 pandemic and international trade: temporary turbulence or paradigm shift?,” European Journal of Risk Regulation, 11(2), pp. 337–342. doi: 10.1017/err.2020.29.
Kerr, W. A. (2021) “Agriculture after a year with Covid‐19: any long‐term implications for International Trade Policy?,” Canadian Journal of Agricultural Economics, 69(2), pp. 261–267. doi: 10.1111/cjag.12274.
Mahmud, A., Ding, D. and Hasan, M. M. (2021) “Corporate social responsibility: business responses to coronavirus (COVID-19) pandemic,” SAGE Open, 11(1), pp. 1–17. doi: 10.1177/2158244020988710.
O’Neill, A. (2021) Global GDP 2014-2024, Statista.
Sharma, G. D., Thomas, A. and Paul, J. (2021) “Reviving tourism industry post-covid-19: a resilience-based framework,” Tourism Management Perspectives, 37, pp. 1–11. doi: 10.1016/j.tmp.2020.100786.
Wang, D., Hubacek, K., Liang, X., Coffman, D. M., Hallegatte, S. and Guan, D. (2021) “Reply to: observed impacts of the COVID-19 pandemic on Global Trade,” Nature Human Behaviour, 5(3), pp. 308–309. doi: 10.1038/s41562-021-01061-4.
WHO coronavirus (COVID-19) dashboard (no date). World Health Organization.