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CORONA VIRUS INFECTS GLOBAL ECONOMY AS NEVER BEFORE

 

Amitabh Roy

Today it is the morning of May 2, 2020. The world continues to suffer under the humongous threat of COVID-19 and the mighty US appears to be the worst sufferer in terms of human lives. God has caged mankind- and how.

The new world ran on energy, or at least that’s what was the norm till Corona struck. Industrialization and computerization ran arm in arm and the technological advancement over just the past two odd decades can be termed as amazing. The climate change threat had forced a global rethink on burning hydrocarbons and there was a gradual shift to ‘cleaner’ energy options such as solar power and EV’s. Impressive ground was covered here but it was a tough ask. The world was still losing to the climate change monster and the transformation was too little too late, according to experts. Then suddenly the Corona threat forced industry to fold up almost simultaneously worldwide. The flip side of this catastrophe has been that the climate change monster has also been severely injured by COVID-19. The chirping of birds, the sniff of fresh air, the clearing up of the waters of the oceans and the repair to the Ozone layer can all be termed side effects of one of the worst ever threat to mankind since the world wars.

But let us now look at the state of business and industry as it stands today and the kind of imprint this Corona threat is poised to leave on industry as well as geo political global relations once the lockdown is lifted.

From the business perspective, China as a manufacturer and exporter has earned a bad reputation. It is quite possible that in the post-Corona scenario many countries who have business ties with China will be forced to look at other options-if only because they will not be able to forgive Beijing for the coffins lined up in their backyard.

The latest spat started after Australia called for an independent inquiry into the origin of the novel coronavirus. "I think it's incumbent upon China to answer those questions and provide the information so people can have clarity about exactly what happened because we don't want it to be repeated," Australia's home affairs minister Peter Dutton said on April 17.
 

THE INDIA PERSPECTIVE- POSITIVES AND NEGATIVES

  • COVID-19 cases in India cross 37,000, death toll at 1,218.
  • The Indian government has extended the world's biggest coronavirus lockdown by two weeks starting May 4, but with some easing of restrictions.India's Ministry of Home Affairs on Friday said in a statement in view of "significant gains in the COVID-19 situation," areas with few or no cases would see "considerable relaxations".

 

  • India's March crude oil imports rose at the slowest pace this year, while refined product exports also rose but at a lower rate as some refineries cut back crude processing as the coronavirus outbreak crushed demand for fuel.

 

  • Oil products imports rose more than 7 per cent to 3.92 million tonnes year-on-year, which was the lowest year-on-year percentage rise since January 2019. Oil product exports rose 7.4 per cent to 5.93 million tonnes, sharply down from a 21.4 per cent rise in February.

 

  • Exports of diesel were also affected by the coronavirus crisis and rose only 11.7 per cent in March, the lowest year-on-year increase since August. Petrol exports declined 5.2 per cent in March as the virus hit economic activity and fuel demand for transportation globally.

 

  • India’s eight infrastructure sectors contracted by a record 6.5% in March after touching an 11-month high in February, hit by a nationwide lockdown to contain the spread of covid-19.

 

  • Indian automakers for the first time reported zero local sales in April as factories and dealerships across the country remained shut to comply with a stringent lockdown. For comparison, nearly 250,000 vehicles were sold in the domestic market in April 2019. Indian automakers count the dispatch of vehicles from factories to dealers as sales. However, as ports resumed operations, some manufacturers managed to restart exports.

 

  • Even as coal production by Coal India hit its highest in 60 months in March, coal dispatches declined 10.3 per cent year-on-year to 53.5 million tonnes during the same month. The decline came due to a sharp fall in power demand on account of a nationwide lock down.