The Sociopolitical and Economic Impact of the Pandemic

Two years of the coronavirus pandemic have seriously changed the world around us economically and politically. The pandemic demonstrated that any mass epidemic is as much a generic challenge to society as war, a change in geological epochs, or economic stages. At this challenging time for everybody, all power structures and public institutions have faced the need to demonstrate they are still capable and have a future. Unfortunately, many such structures have not stood the test of time, losing credibility and authority.

For example, the European Commission and the European Parliament proved unable to consolidate the efforts of all EU members to develop and implement effective anti-epidemic measures. Moreover, especially in the initial period of the epidemic, Brussels demonstrated a complete paralysis of leadership and an outright unwillingness to take responsibility, thereby forcing national governments to seek salvation on their own, in a “every man for himself” mode. This is particularly evident in the sharp increase in competition between states for medicines, medical equipment, and essential consumables, such as medical masks and sanitary gloves.

As the European media outlets state, the pandemic has had a notable effect on Central and Eastern European countries, which faced a sharp rise in inflation and prices. Thus, according to the National Institutes of Statistics, in October, the consumer price index in Romania rose by 7.9% year on year, reaching its highest level in the last ten years. In the Czech Republic, inflation rose by 5.8%, in Hungary by 6.5%, and in Poland by 6.8% in the same month. Overall, according to Oxford Economics forecasts, inflation in Central and Eastern Europe is expected to rise by 7% this year. In comparison, its increase is forecast at only 3.7% throughout the eurozone.  As Liam Peach of the UK firm Capital Economics points out,  “This region has the greatest risk of sustained price increases over the next few years.”

The brain drain to the West aggravates this problem for Central and Eastern Europe, reducing the working-age population due to a low birth rate.

American-style democracy did not survive the public examination either, by demonstrating its selfishness under the slogan “America first,” Washington’s desire to use the pandemic crisis as a tool to regain world leadership on the international stage, including by influencing the market for the production and distribution of coronavirus vaccines. Although the United States continues to position itself as the world’s most developed, wealthy, and sustainable economy, the coronavirus epidemic has taken a heavy toll on it. According to Harvard economist David Cutler and former US Treasury Secretary Lawrence Summers, this damage has already surpassed any expected losses related to climate change on the planet in the next 10-15 years. Specifically, they note that considering the long-term effects, the US economy has lost about $16 trillion or 90% of annual GDP for 2019. Even with nearly $12 trillion in emergency financial injections under three crisis management programs, the US economy shrank by 3.5% by the end of 2020. The US unemployment rate jumped from 3.5% to 14.7%, affecting more than 25 million workers.

Covid has changed the way people in the USA think about work: despite rising prices, the US recorded a record 4.4 million layoffs in September, reports CNN. As the channel explains, people’s perception of work has changed because of the pandemic. Besides, companies are now desperately looking for people and filling all their vacancies. All this will only complicate economic restart, supply chains, and inflation in the short term.

As a consequence of the pandemic, there  has been an increase in school violence and vandalism throughout the United States. Some incidents have resulted in arrests and even the temporary closure of educational institutions. According to school authorities, the spike in violence is linked to the prolonged interruption of face-to-face schooling, the hardships of the pandemic, and bad examples from adults.

Losses to the world economy from the coronavirus pandemic range from $4 trillion to $10 trillion, said Alexei Kudrin, head of the Accounts Chamber of Russia, in a video address to participants at the Third BRICS International Municipal Forum.

Johns Hopkins University estimates that the total number of Covid-19 deaths worldwide now totals more than 5.3 million, comparable to the population of Rome and Paris combined. Most dead are registered in the USA, more than 640,000 people. In Brazil, more than 580,000 people. In India, more than 440,000 are dead. Remarkably, in the last five months alone, the number of Covid-19 deaths worldwide has increased by 1.5 million! As Russian President Vladimir Putin stressed at the 18th Annual Meeting of the Valdai Discussion Club, losses from the coronavirus pandemic surpass those from World War I.

The coronavirus pandemic has pushed 100 million children below the poverty line, the Swiss TV channel SRF notes. The pandemic has wiped out all the progress against child poverty in recent decades. Today, more than a billion children are without sufficient health care and nutrition, without full access to sanitation, clean water, and, most importantly, education. Child labor rates have also risen: today, 160 million minors have to work. UNICEF estimates that 9 million more children will need to feed their families by the end of next year.

Nor has the open market withstood the test of the coronavirus pandemic: border closures due to quarantine restrictions have collapsed entire industries and severed an intricate web of trade, production, and logistics links. Border closures have hit tourism particularly hard, forcing airline executives to reconsider plans for new aircraft purchases radically, causing a drop in aircraft manufacturers’ sales and a radical reduction in the portfolio of future orders.

An analysis of the impact of the pandemic in different countries has revealed and deepened many of the emerging problems. First, geopolitically the world has lost its monolithic unity. International organizations, including such leading ones as the UN, WHO, WTO, and major geopolitical blocs, particularly the European Union, in combating the negative factors have been inexcusably slow and frankly incapable of assuming the active coordinating role that was previously attributed to them. National governments have been forced to bail out their economies on their own, which created a significant policy rift in the world.

By Vladimir Danilov
Source: New Eastern Outlook

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