Analyzing the Global Economy in the Post-Pandemic Recovery: Is the Recovery Near or Not?

Analyzing the Global Economy in the Post-Pandemic Recovery: Is the Recovery Near or Not?

Özlem Özsoy, Metin Gürler
DOI: 10.4018/978-1-6684-3749-0.ch009
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More than two years have passed since the new type of coronavirus began in Wuhan, China. In addition, it has been more than 22 months since the World Health Organization (WHO) declared a pandemic, and the world continues to struggle with new variants of the virus and cannot return to the old normal. Closures, lockdowns, and restrictions on foreign trade of goods and services have decreased global economic activity. It is seen that two important challenges have emerged due to the pandemic. First, the countries with limited health services capacity in the face of the increasing number of cases and deaths in the world had trouble to combat with the pandemic. Second, low-income countries which have difficulty in accessing medicines and vaccines having an important role in combating the pandemic are more distressed than other countries and need global support. It is seen that the inequality in income distribution between countries in the world also manifests itself in accessing drugs and vaccines.
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At the end of 2019, a novel coronavirus emerged and spread very fast worldwide. COVID-19 (coronavirus disease 2019) has not only become a global epidemic, but the World Health Organization also (WHO) declared it as a pandemic on March 11, 2020 (Gürler & Özsoy 2020). Closures, lockdowns, and restrictions on mobility and foreign trade of goods and services have decreased economic activities in the countries. COVID-19 not only shook up the health systems in countries and tested their capabilities by pushing their limits, but also caused a decline in economic growth, foreign direct investment (FDI), employment, foreign trade, social life and an increase in price levels, unemployment, external debt, poverty, and loss in working hours.

The global economy has faced the deepest recession since World War II due to the pandemic. Gross Domestic Product (GDP) per capita has experienced the highest decline since 1870 and fell in more than 90% of countries by 2020 (World Bank, 2020). The pandemic may leave lasting damage to human capital and economies, causing declines in investment, disruptions in global trade, global supply and value chains, and an increase in unemployment and loss of schooling. These effects can also reduce productivity and limit the ability of economies to increase real incomes in the long run. Developing a resilient supply chain strategy can help the Micro Small and Medium Enterprises (MSMEs) which plays a crucial role contributing to GDP and foreign trade of the countries can handle any kind of disruption such as pandemic (Mukherjee, Baral, & Venkataiah, 2022).

Declining economic activities have further deteriorated the inequality of income distribution both among citizens within the country and between countries. The negative effects of the pandemic have further affected the fragile parts of the society, especially the elder population who need care. It is also noteworthy that deaths from the pandemic are higher among the elderly population who are more in need of care and often have chronic diseases. One of the main areas of interest of social states is public health. States aim to ensure that every member of the society is healthy by trying to provide health services to their citizens, especially to the elderly population who need support. Facing lower physical and mental capacity otherwise causes older people to live more negatively in additional life years (Özsoy & Gürler, 2021a).

Inequality in income distribution also manifested itself in access to vaccines, and high-income countries transitioned to the new normal more quickly than low-income countries, with the increase in vaccination rate. With the COVID-19 pandemic, inequalities have emerged in the response of countries to the pandemic, thus necessitating countries to take global cooperation and concerted action together to better respond to global health threats.

Main Focus of the Chapter

This chapter aims to investigate the COVID-19 effects on health systems and economies. The study also aims to analyze COVID-19 related health indicators such cases, deaths, Case Fatality Rate (CFR), vaccination and health system infrastructure with the negative effects of the pandemic on global economy, FDI, foreign trade, external debt, poverty, tourism, unemployment, interest rates, and inflation.


Methods And Materials

In the study, some basic pandemic indicators such as confirmed global COVID-19 related cases, deaths, Case Fatality Rate (CFR) and fully vaccinated people data were taken into consideration to analyze the pandemic effect on health systems in the countries. Global data were analyzed for regional both for geographical and WHO classification and the World Bank’s income classification. For the analysis of the health system capacity, data for hospital beds, number of nurses, and medical doctors were examined.

Key Terms in this Chapter

Imports: All goods and/or services physically brought into the country from other countries. Imports measure the total physical arrivals of merchandise goods and/or services into the country from the foreign countries (US Census Bureau, 2022 AU87: The in-text citation "US Census Bureau, 2022" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

FOB: The FOB (free on board) value of exports and imports of goods is the value of the goods at the exporter's customs frontier. Foreign transport and insurance services between the exporter's and importer's frontiers are not included in the value (but are recorded under services) (Eurostat, 2022 AU86: The in-text citation "Eurostat, 2022" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

Export: To send or transport goods and/or services out of a country to the other countries. Exports measure the total physical movement of merchandise goods and/or services out of the country to the foreign countries (US Census Bureau 2022 AU83: The in-text citation "US Census Bureau 2022" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ). An export of a good or service occurs when there is a change of ownership from a resident to a non-resident (Eurostat, 2022b AU84: The in-text citation "Eurostat, 2022b" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

Pandemic: A pandemic is defined as “an epidemic occurring worldwide, or over a very wide area, crossing international boundaries and usually affecting a large number of people”. The classical definition includes nothing about population immunity, virology, or disease severity ( WHO, 2022d ).

GDP: GDP measures the monetary value of final goods and services—that is, those that are bought by the final user—produced in a country in a given period of time (say a quarter or a year). It counts all output generated within the borders of a country (IMF, 2020).

FDI: Foreign direct investment (FDI) are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor (World Bank, 2022c AU85: The in-text citation "World Bank, 2022c" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

Excess Mortality: Excess mortality is defined as the difference between the total number of deaths estimated for a specific place and given time period due to a crisis or pandemic as COVID-19 and the number that would have been expected in the absence of the crisis and pandemic (no-COVID-19 scenario) ( WHO, 2021c ).

Life Expectancy at Birth (Years): The average number of years that a new-born could expect to live, if he or she were to pass through life exposed to the sex- and age-specific death rates prevailing at the time of his or her birth, for a specific year, in a given country, territory, or geographic area ( WHO, 2022d ).

Inflation (CPI): Inflation measured by consumer price index (CPI) is defined as the change in the prices of a basket of goods and services that are typically purchased by specific groups of households ( OECD, 2022d ).

Current Health Expenditure (CHE) per Capita in US$: This indicator calculates the average expenditure on health per person. It contributes to understand the health expenditure relative to the population size facilitating international comparison. Per capita current expenditures on health expressed in respective currency - US dollar ( WHO, 2022d ).

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