HOW TO CITE THIS ARTICLE: Evans O. (2020). Socio-economic impacts of novel coronavirus: The policy solutions, BizEcons Quarterly, 7, 3–12.
is fundamental to a prosperous productive society, whereas panic and illness
can stifle production, consumption, recreation, travel, and overall well-being
(Marin, 2017; Adeola & Evans, 2018; Lawanson & Evans, 2019;
Nwaogwugwu & Evans, 2019; Fourie, 2020).
Health disasters such as the Ebola virus in West Africa, the Middle East
Respiratory Syndrome (MERS) outbreak in the Republic of Korea, and the rise of
COVID-19 not only have global health impacts but also wide-ranging
socioeconomic disruptions. For example, during the Ebola virus in West Africa from
2013 to 2014, “government revenues declined across the board, including direct
taxes on companies, VAT receipts, and indirect taxes; Additionally, decline in
private and foreign investors’ confidence led to financing gaps of more than US
$600 million over the two years. These impacts cut across many sectors and
undoubtedly have long-term consequences” in Guinea, Liberia and Sierra Leone (Smith
et al, 2019). In addition, after killing at least 800 people and infecting more
than 8000, the total global economic loss due to SARS was estimated to $40
billion. Much of this impact was due to consumer fears given the ease of
transmissibility of the virus in public settings. Also, the wider economic
impact of the 1998 Nipah outbreak in Malaysia was estimated at US $582 million
(Dimmock, Easton & Leppard, 2016).
the same fashion, the incidence of the COVID-19 is growing at a disturbing rate
with significant impacts on global economies and public health. According to
Bloomberg, China’s first‐quarter GDP growth may drop to 4.5%; the global GDP is
also expected to decline by roughly 0.42% in the first quarter of 2020.
Economists have estimated that, without urgent global actions to curtail the
virus in time, China is expected to lose up to $62 billion in the first quarter
of 2020, while the world will lose over $280 billion. Ayittey et al (2020) compared these values to the World Banks
estimate that even a weaker flu pandemic, such as the 2009 H1N1 viruses, would
still wipe 0.5% off global GDP, which is approximately $300 billion.
During the 2003 SARS outbreak, tourist arrivals in Hong Kong dropped 68% just two months. In South Korea, where an introduction of MERS caused a brief 2015 outbreak, the number of international visitors dropped by 41% in mid-summer. The public’s contagion fear and governmental overreaction closed down many public events and stifled daily activities (Lee & Ki, 2015). The H1N1 influenza resulted in a US $2.8 billion hit to Mexico’s tourism industry, with a loss of one million tourists over a five-month period due to contagion fears. In a similar fashion, in a report on the COVID-19 outbreak, the United Nations World Tourism Organization [UNWTO] (2020) has emphasized a decline in international arrivals and receipts in 2020, revising its 2020 prospects for international tourist arrivals to a negative growth of 1% to 3%, meaning an estimated loss of US$ 30 to 50 billion in international tourism receipts. In fact, the impacts are estimated to be felt across the whole tourism value chain. For example, according to Global News (2020), bookings are down from China to Canada by about 70 per cent between October 2019 and March 2020 as many airlines have restricted the number of flights to the country, and several Canadian tourism marketing agencies have pulled out all their ad money from China.
and mortality values may indicate severity of COVID-19 impact, but may not allow
appreciation of the full consequence of impaired productivity from illness for
a person, their household or their community. Impacts may involve
psychological, educational, or professional losses on the individual and
household. The high death toll during the West Africa Ebola outbreak trigger
expanded social and household economic impacts, stifled growth rates, and lost
wages due to inability to work or contagion fear, increased poverty and food
insecurity, lost education and lost jobs.
a similar fashion, if the age group of 15–44 years, those engaged in the labor force
and parents of young children, account for majority of COVID-19 infections,
the impact on economic activity, poverty and food security could be
substantial. Incomes could drop significantly during the outbreak; consumption
by households could decrease and the prevalence of undernutrition rise. Closure
of schools, resulting in weeks
of lost education, could expose children to several types of child abuse
(including sexual exploitation and violence against girls) with long-term
effects such as emotional trauma and unwanted pregnancies. Economic
implications of the COVID-19
can be detrimental not only to public health systems but to
trade and travel, food and agriculture industries, various market types and
retail chains, among others. These sectors are not traditionally linked to
disease impact assessments, yet they are confronted with the threat of the virus
wherein consumers are too fearful to access their services because of supply
chain or their workforce is compromised.
There are many ramifications of the direct and indirect economic effects of the COVID-19: preparedness and prevention (practices that mitigate risk), the event itself (e.g., business continuity, supply chain disruption, public contagion avoidance behavior, trade and travel bans), and the event aftermath (e.g., permanently closed markets, long-term employment loss, impacts of lost education or being orphaned, etc.). There are increasing numbers of confirmed deaths. These numbers are expected to surge when indirect costs due to lost productivity and comorbidities are taken into consideration. The escalating pandemic has the potential to overwhelm healthcare systems and threatens to reverse the gains of economic development in many emerging markets. Considering the grave human, societal, and economic consequences, there is a critical need for health professionals and policy makers to recognize the magnitude of the COVID-19 epidemic and the potential devastation it may inflict, particularly in the developing world.
To read the full article, click PDF.