No one would have thought even in their dreams that, a single virus is going to change their lives forever. Coronavirus is a pandemic that has changed the world order. It has put the world upside down. Many people are losing the battle with the virus, with the toll increasing day by day.
It is not just the death toll and the fear of the virus we are gripped in. The way it is taking the economy, jobs, market, automobile, retail sector among others, is a cause of concern too. The world has seen such kind of similar situation before in the Great Recession of 2008. But this pandemic digs deep its similarity to the horrendous World War II.
Why is the slowdown linked to the recession?
A slowdown in an economy is the general fall in the prices, clubbed with the drowning demand. But once the slowdown gets into the whole of other sectors, it can be termed as a recession. If it is the slowdown in most of the sectors of the economy, ranging for a longer time, we consider it a recession.
The Coronavirus recession has already engulfed in the whole of the economy over the world. The sectors it has taken over by storms include the oil, shale and gas exploration, the automobile sector, the mining sector, the stock markets, and the banking sectors as a whole.
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The virus has created a situation never seen before. People are losing their jobs, lenders are unable to get the credit, the banks are facing high NPAs, the tourism sector has taken a hit. With this entire situation prevailing across the world, it would not be an exaggeration to compare the present situation with World War II.
How is it similar to World War II?
World War II is the last of the two deadly world wars fought in the twentieth century. It was one of the most devastating wars ever fought in this world in its history. It not only hit the strength of the countries, but it also affected the world order in a great way.
The economy was hit badly at that time. With the banks going bankrupt, the factories firing out the workers, the increased attention to more and more deadly weapons, the war got more dangerous with time. It is the ambit of the war and its impact that shook many empires across the world.
Now, most of the same conditions are propping up now this time around. The different sectors are affected by the virus, people are losing their jobs, and the world order is set to change now.
Some of the similarities can be analyzed under different heads as follows.
#1. Plummeting Demand
If you are to ask me, what is the first and the common aspect of the two? It is the slide in demand. Whenever any kind of warlike situation or a pandemic struck a region, there is an increase in savings. And with the increase in savings, no one is interested in putting their money in banks. This calls for the situation of a lack of demand in the economy. Here people refrain from buying, which in turn slows the economy.
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Another aspect this time is the oil demand. Even before the pandemic has struck the word, the oil companies were reeling under the stress. The oil prices have now gone down to a historic low. And with the pandemic, the demand has further stricken. Even during World War II, the oil demand had plummeted.
#2. International Disputes
After the slide in the demand across the world over, it gets a cue. The whole of the world war was based on the disputes associated with the declarations imposed on Germany and others. They found it to be very harsh, and it leads to the tensions between the Axes and the Allies. And this further fuelled up the casualty in the war.
A similar kind of scenario is the world seeing now. With the World Health Organization (WHO) losing its credibility in the initial crucial times, it started a chain. The chain then went on with the territorial claims of China across the South China Sea, and, also the role of Iran in the middle-east.
#3. Loss of Jobs
With the international disputes taking over the seat, the very first they hit is the jobs. Increasing tensions between the countries in South Asia and Europe, the rival countries are firing the migrant workers in the name of national appeasement. Such scenes are now open in Saudi Arabia, UAE, and other middle-east countries.
Well, this is not a new thing. The similar phenomena of firing the non-locals were seen the World War II. With the war gaining ground, the hiring of locals in factories was most common in Germany. The factories were mostly focused on the intention of the war. All this created a hue for the nationalism trend which finally led to the independence of nations in South Asia and Africa.
#4. Surge in productions
Another impact of the local participation in the jobs was the focus on mass production. With world war upping, there was now a changed stance for mass production of weapons like guns, bombs, and also, there was a surge in the productions of medicines for the soldiers injured in the war. This created boom in pharmaceutical and research production.
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Similar kinds of instances are seeing in the present era. Now with the pandemic, no viable option to fight the pandemic, there is now started a mass production of the PPE Kits, of medicines like Remdesiver, HCQ, of masks, hand sanitisers, among others. Some countries are using it as an opportunity to boost the economy through increased exports of the following commodities. Also it has led to a nationalist trend, as some countries are refraining from exports in order to hold the stocks for their own citizens first.
All these conditions clearly indicate that there are a lot of similarities with the World War II with this Coronavirus recession.