Coronavirus may trigger new global economic crisis as fears grow - LEVENT YILMAZ

Coronavirus may trigger new global economic crisis as fears grow

Late last month, I shared my prediction that the coronavirus could reach a level that would threaten global economic security, and I stated that not getting the disease under control by mid-February will further increase the economical risks. As things stand now, the virus has not been brought under control and it has even begun to cause trouble for other countries.

Coronavirus continues to spread

The novel coronavirus, which originated in China and has been dominating the world agenda for some time, has now become a full-fledged global problem. As the number of people affected by the virus is increasing with every passing day, cases reported in Iran and Italy has plunged the world into global panic.

The global economy, which has not yet recovered, started to have problems this time due to illness. The detection of new cases in different parts of the world deepens the current economic concerns. Obviously, it is unlikely that many economies, including China, will manage the costs that the disease will face. On the other hand, we do not have clear information about the speed of the disease and how many people it affects. Because right from the beginning, China seems to be keeping real figures on this issue from the public. In addition, it is thought that Iran does not take timely measures to counter the disease and also is not being forthright with regards to the issue.

India is mum for the time being. However, it is impossible for India to remain unaffected when the virus has already reached Iran. It is not difficult to guess how bad it would gradually get, especially when taking into account the state of hygiene in India.

Virus impact on economies

While coronavirus threatens global health, it also affects economies. Issues such as restrictions on countries where the virus has originated, flight suspensions, canceling fairs and tours, halting import orders, and shutting down border gates will further increase economic costs.

Can these economies shoulder this burden? Let's answer this bluntly: no. It is not possible for economies such as China, Iran and India to withstand the impact and costs that the coronavirus will unleash on their economies. Even in the case of Germany, Berlin had to cancel certain exhibitions so we can safely assume it will be a headache for other countries. It is possible to examine individual countries, but we must stress that the risk for some countries' foreign trade coming to a halt in the coming period and its percentage of the global trade volume exponentially increases the risk of triggering a new global economic crisis.

Obviously, even when talking about the possibility of the next global economic crisis emanating from a virus is an indication of how fragile the factors we refer to as "non-economic” can impact economies.

‘Biological weapon theory’

Since coronavirus first appeared, certain conspiracy theories began to circulate. The most interesting of these is that the U.S used this virus as a biological weapon against China in its trade war with Beijing.

According to this theory, the Chinese economy will be negatively impacted, Chinese goods will be replaced by U.S.-manufactured ones and finally the trade balance between China and the U.S. will evolve in favor of the U.S..

Thus, the U.S. would prevent China from becoming a hegemonic force.

Of course, it is impossible to comment on this issue with any certainty. But at the end of the day, we can not deny that the virus serves American interests, be it a biological attack or not.

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