Close Encounters

Pakistan has had to pump in money to prop up a system in which
too many people were hanging by their fingertips.

By Saira Baig | July 2020

The financial markets think the worst is over and done with (no, not with the over-4.3-million Covid-19 cases worldwide, for sure). Share prices have largely been rising for the past few months because some nations, most notably European and Japanese, are starting to lift the lockdown restrictions imposed to limit the Covid-19 pandemic. Amid sighs of relief all round on Wall Street, the hope is that it will soon be business as usual.

In a sense, it’s not an unreasonable thought after all, because the virulence of this particular strain of the coronavirus could not have been predicted. It was what economists call ‘an exogenous shock’: something that has a big impact, but comes from outside the system itself.

So, the argument goes. The global economy is going to suffer its worst year — to be honest, the world economy this year is predicted to shrink by 3.2 percent, racking up some $8.5 trillion in overall losses and wiping out nearly four years of output gains — since the Great Depression. But Covid-19 does not mean the end of globalisation: it is a freak of nature, that’s all.

The Third World’s fears are mushrooming already: the Covid-19 crisis could extend further than anyone could imagine. It could:
• increase the number of people battling acute hunger
• overshadow climate change policies as fighting converges on the virus
• worsen income losses for informal economy workers
• result in 7 million unintended pregnancies
• halt many mass job campaigns

Yet, the view that nothing fundamental will change as a result of the twin health and economic emergencies may be right. There was, after all, much talk of how global capitalism was going to be fundamentally reformed after the banking crisis of 2008, but that’s all it turned out to be: talk.

Read More

The writer is a freelance writer focusing on politics in Asia, the Middle East and Latin America. Her subjects cover feminism, fashion, cinema and sport. She can be reached at

Cover Story
Special Editorial Feature
News Buzz

Leave a Reply