Abstract
A global pandemic caused by a microscopic enemy, which outbroke in Wuhan, China, quickly spread throughout the modern world, bringing world’s largest economies to a halt. By March 2020, the whole world was impacted by the ripple effects of COVID-19 and was in the midst of battling this infectious disease. The pervasive economic consequences of the coronavirus are not a macroeconomic problem that can be solved or reduced. Instead, the world is seeing a fundamental change in the nature of the global economy. The immediate crisis is considered to have affected both supply and demand. Declining supply shall be considered as a short-term issue, that stimulus plans by various countries, including a massive plan by the US government, along with historic low interest rates, may remedy. In this article we examine different scenarios of the supply chain’s future and its separation from social trends. Moving nations toward self-sufficiency may deeply alter globalization, which requires the division of labor between different economies. Unless strong economic policy measures are taken to prevent social disintegration, this change may be an end to globalization. Hence, many global leaders have implemented stimulus packages in an effort to relieve the economic stress felt by businesses and families, as a short-term economic stress relief. This pandemic has demonstrated the fragile nature of the US and the global trade system, due to majority of products being manufactured in China. There is an urgent need to expand manufacturing industries to various countries rather than concentrate most of them in one location. This pandemic will result in a shift to self-sufficiency, in the short-term, within borders. However, in the long-run, it will re-define globalization to include more countries functioning as micro-hubs for production, which should be implemented to avoid the “all eggs in one basket” scenario. In addition, this system will enable smaller economies to participate in the global platform.
Highlights
A Brief History of PandemicsThe history of global trade may go back to about 130 BC when the Silk Road was initially established
First identified in Wuhan, China in December 2019, Coronavirus Disease 2019 or COVID-19 (Figure 1) is an infectious disease related to the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) strain (Hui et al, 2020; Ghebreyesus, 2020; WHO, 2020)
In this article we examine different scenarios of the supply chain’s future and its separation from social trends
Summary
The history of global trade may go back to about 130 BC when the Silk Road was initially established. It is widely thought that the route was one of the main ways that plague bacteria, responsible for the Black Death pandemic in Europe in the mid-14th century, moved westward from Asia (Gould, 1966). Diseases and illnesses have plagued humanity since the earliest days. According to Flightradar, a leading global flight tracking service that provides real-time aircraft information on a map, commercial aviation reached an all-time record high on 25 July 2019, with more than 230,000 flights in a single day (Flight Radar 24, 2008). Since the inception of the Silk Route, civilization has expanded involving exotic trade routes and increased contact with different people, animals, and ecosystems, leading to a likelihood of pandemics (LePan, 2020).
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