Supervisor Elham AbolFateh
Editor in Chief Mohamed Wadie

Is it Possible to Survive Global Economic Recession? Op-ed


Fri 23 Oct 2020 | 12:29 PM
Yassmine Elsayed

The outbreak of the novel Coronavirus resulted in huge losses in the tourism sector in all countries of the world during the first half of the year, according to the World Tourism Organization. The losses were estimated at  $460 billion, which is five times greater than those recorded during the financial crisis in 2009, as the Madrid-based UN organization said in an official statement. 

The closure of borders and lockdown in several countries caused the number of tourists in the world to decline by 65 percent in the first half of this year amid restrictions on travelers. The organization believes that the return to the pre-pandemic level, in terms of the arrival of tourists, will take between two years and four years.

It is not a secret for every observer, as the Secretary-General of the World Tourism Organization, Zurab Pololikashvili, said that the tourism sector is an income source of millions of inpiduals for their livelihood. 

The organization stated that the development of tourism in August predicts a "decline in demand of nearly seventy percent" over the year 2020, while some regions of the world such as Europe have been witnessing, since this summer, a new outbreak of the Covid-19 pandemic that leads to the imposition of new restrictions on travelers and to more economic stagnation, uncertainty and unpredictability of the future ...

If we take, for example, a major tourist, industrial and commercial country like Britain, we find that the country saw a "record" decline in its economy estimated at 20.4 percent, facing its worst recession since recording quarterly numbers began in 1955. Any country enters a recession after recording a decline in its GDP for two successive quarters.

The Office for National Statistics, which has recently published these figures, indicated that this is the first technical recession in Britain since 2009. The Office explained that the bulk of this decline, whose effects began to appear in March, was recorded in April when the country started the lockdown, reducing production by 20 percent. The recession has caused enormous social damage, as the number of people working between March and July decreased by 730,000, according to recent official figures.

With the announcement of these figures, the United Kingdom recorded the worst economic performance in the second quarter in Europe, ahead of Spain (-18.5 percent) and much worse than France (-13.8 percent).

Moreover, whether in the field of tourism or the economy in general, countries will experience difficult times, and today's figures confirm this ... We find that hundreds of millions of people have lost their jobs in the world, and more people will lose their jobs ... Most countries will weather the storm of the pandemic and the forced suspension of tourism and economic activities. This is via unprecedented support measures and hundreds of billions of dollars pumped by governments through loans or aid to maintain jobs, or through banks that buy assets and grant interest rates that reach their lowest historical level ...

The major problem here is that this recession is not due to the disruption of the economy of one country or a specific geographic region, but because of the global economic recession that does not differentiate between an industrial or non-industrial country .. Therefore, we find Japanese Minister of Finance and Minister of State for Financial Services and Economic and Fiscal Policy Kaoru Yosano saying that the Japanese economy is currently passing through the worst crisis since the end of World War II. "

"It is the worst crisis since the end of the war. There is no doubt about this," he said during a press conference, adding that "the Japanese economy, in which development depends largely on the export of cars, machinery and electronic equipment, has been greatly affected by the crisis." He stressed that "Japan will be unable to get out of the crisis alone. There are no limits in the economy. Our economy will resume its rise at the same time with the economy of other countries." 

As some successful businessmen told me, the economic future looks like a ship sailing in the middle of the ocean, with good wind, until waves came from everywhere, and fierce winds came as well, while its passengers were surrounded by these all and they did not know whether or not they will survive this, and God is the command before and after ...