World on Edge as Cornavirus Panic Escalates
Updated: Mar 9, 2020
The open window through which a global pandemic of the coronavirus can be prevented is rapidly closing. As outbreaks in Italy, Iran and South Korea are reported and more lives are lost, stock markets slump and the Chinese economy experiences prolonged frustration.
Director General of the World Health Organisation, Tedros Adhanom Ghebreyesus, believes the world's ability to contain the virus is "narrowing". This is in light of more authoritarian methods in several countries to combat the virus. Like the Black Death, the coronavirus seems to have claimed Italy as its first major European victim, where several northern regions are currently on lock after its death toll reached five today. At least 200 people there are infected with COVID-19. In total, in excess of 2,500 people have died from the virus worldwide, with well over 11,000 current critical cases and rising.
As a precaution, authorities are calling for all unnecessary travel to affected areas to be called off.
The economic impact of the epidemic is materialising. FTSE 100 is down 3.22%, with airline companies hit hard. Unsurprisingly, Italian stocks have dropped by 4% as the country faces one of the biggest challenges of the year head on. Tourism is down from China to France, with the latter country struck by a 30% to 40% fall in tourism overall since the outbreak. The former country is also saddled with closed factories and consumer uncertainty inside and outside of the country. Forecasters are starting to revise projections of economic growth for the first half of the year to zero as the increased risk of a pandemic is raising the chances of a recession.
The status of the virus is now volatile, making it ever more difficult to find a successful global response. In a 'safety first' approach, countries around the world are likely to up their quarantine practice and may face pressure to implement stricter border controls. In Britain, those infected have been transferred to special NHS centres, with the Prime Minister reassured that the country is well-equipped to tackle the crisis. However, a pandemic will be a mighty challenge and one that will require all organisations implementing immediate action to prevent spread of the disease. If the outbreak is prolonged, such action will slow the economy and subsequently funding for the NHS and those most at risk of disease - hardly positive conditions for post-Brexit Britain. On the other hand, media clicks are in a frenzy amidst the novelty of a scent of threat in the spread of the mysterious disease. It is important that the outbreak is not dramatised in the pursuit of sexy journalism. Such exaggeration will deter investors, consumers and tourists unnecessarily. But the frightening situation in Italy is great cause for concern in the West as the virus comes our way and potentially to countries like the US, where markets may slump in a country without free healthcare.
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