Why is the Corona crisis in India hindering the growth of the global economy? | Hind

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The second wave of the Corona epidemic hit India with a devastating impact, as more than 300,000 new infections and 3,000 deaths were recorded daily across the country at the present time, and the total number of deaths exceeded 200,000 cases; But it is also clear that these statistics do not reflect reality.

at report Published by the Australian site The Conversation, writer Uma S. Campbati said that the ferocity of the second wave in India is linked to a set of factors, most notably the government’s complacency pushed by poor data collection, denial of the truth of data, a new mutated strain highly contagious, and some religious and political events Large and unorganized.

India, with a population of 1.4 billion people and one sixth of the world’s population, is experiencing a multidimensional humanitarian crisis that will also affect the global economy in several ways.

Growth declines

India is the fifth largest economy in the world, and a major contributor to global economic growth, and with relatively high growth rates ranging between 4% and 8%, it has a major impact on the global economy.

In early 2020, ahead of the pandemic, the International Monetary Fund warned that India’s indifference was the main reason behind stagnant global growth numbers in 2018 and 2019. The International Monetary Fund has lowered its forecast for global growth for 2020 to 5.8% partially. Because of expectations of a decline in growth in the Indian subcontinent, and now it appears that global growth for 2020 has decreased to about 4%, with India’s economic growth declining by 10%.

A major recovery is expected in 2021 in both India and the world; Today, however, it is becoming increasingly doubtful that, in addition to the major problems associated with the new mutated strains in Brazil and South Africa, the impact on global growth could be significant, even before any indirect effects are taken into account.

International restrictions

Regarding the indirect effects, the crisis in India is likely to cause international restrictions to last longer than expected, for example, on a recent flight from New Delhi to Hong Kong, 52 passengers tested positive for Covid-19, and requires preventing the spread of the virus from India. Strict quarantine measures and travel restrictions are imposed, and this is bad news for airlines, airports and the companies that depend on them, which will curb global economic growth.

India currently produces 70% of the world’s vaccines (Getty Images)

Pharmaceutical industry problems

The pharmaceutical industry in India is the third largest in the world in terms of size, and ranks 11th in terms of value, and also contributes 3.5% of the total medicines and medicines exported globally, and accounts for about 20% of global exports of equivalent medicine, and if these exports are damaged, Healthcare will be affected worldwide, which in turn will again affect global growth.

India currently produces 70% of the vaccines in the world, as the “Serum India” Institute was granted the rights to produce the “AstraZeneca” vaccine for 64 low-income countries under the “COVAX” program of the World Health Organization, in addition to 5 million doses allocated to the Kingdom United.

The crisis in India has already postponed or canceled vaccine exports; This has made many countries vulnerable to new waves of the virus that may delay the possibility of their economic activity returning to normal.

If India is unable to provide vaccine supplies to the rest of the world, this is expected to have indirect effects in the form of frequent closures, an emphasis on the importance of following social distancing measures, and a significant reduction in economic activity.

Decline in the service sector

India provides back office personnel (non-client-facing management and support personnel) for many activities in Western Europe and the United States, especially in the health and financial sectors, and with these services at risk today, the American Chamber of Commerce is concerned that the Indian economy could create a drag for the economy. Global, moreover, for the United Kingdom, trade ties with India are of great importance, especially in the aftermath of Brexit.

Given all these issues and the humanitarian crisis, it has become imperative for the world to move quickly to help India, whether it seeks help or not. We are witnessing signs that this is happening, albeit after a delay, as the United Kingdom provided oxygen concentrators and ventilators, while the United States supplied them with materials. Initial vaccines, drugs, rapid tests and ventilators, Germany provided oxygen and medical aid.

The attempts of the Indian government may be ineffective in dealing with the current crisis; But a failure to realize how it is affecting the world would be another degree of complacency with the crisis. If the major powers fail to do everything in their power to help, India’s crisis will become a global crisis in a short time, not just in the area of ​​health. It is in the economic field as well.

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