can covid-19 influences the development of any country? if yes than explain
Answers
Explanation:
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I think we are going towards a new normal now. Much of what we saw in terms of global integration of trade and finance would suffer in the short run. If you recall, when the world was hit by economic recession in 2008, trade dipped by almost 10% in 2009 when there was a 3% decline in global GDP. That’s roughly the relation between trade and growth. When there’s a boom, trade grows much faster than GDP. The World Trade Organization (WTO) has now estimated that in a worst-case scenario, global trade could dip as much as 32%, indicating the kind of dislocation they expect in large economies. It’s going to be a very different ball game — the first thing that will happen is countries will try to build themselves up. In India, for instance, we can see the disruption that is taking place — almost 50% of our trade is directly linked with the micro, small and medium enterprises (MSMEs) sector as even large players have sub-contracted to the smaller producers. So it is anyone’s guess what the impact is going to be on trade because of the disruption in production. Going forward, most economies, with the exception of China, are going to see a very different kind of dynamic as they will try to build up from where they would be in a few months’ time and then think in terms of how to integrate themselves again with other countries. My expectation is that this will be a whole new normal that we haven’t seen — after the first round of global integration that we saw in the first decade of the 20th century.