Since more than eight months, I have written on this site, that the health Tsunami that is storming the world now, has started gross consequences on man's life and economies of the world. Many political, economic. Social, ethical, and medical things have started changing.
Inflating expense in the fields of health and social care becomes a priority to all countries. Inter-relations between the countries have also started to change as well as relations of inpiduals with societies and nature in addition to relations inside the field of politics.
In spite of what is traded about the recovery of some economies in some sectors, the restrictions and the ongoing confusion in chains of production and delivery will disturb any real economic recovery. The international debt will hit dangerous levels.
I would like if I were wrong, but these facts are shown by the recent reports released by the Institute of International Finance (IIF) that indicated the rising of the international debt to a level record at $ 281 trillion in 2020 because governments borrowed widely to cope with the consequences of the Coronavirus.
The international debt equals 355% of the total Gross Domestic Product (GDP) at the end of 2020. This increase in the international debt equals multiples of the increase resulting of the world financial crisis in 2008 which sprang of collapse in the market of real estate in the United States of America (USA).
Fallouts of that crisis extended to all parts of the world. In the same context, the World Bank, warned over a report released days ago, of the public debt of the countries in the Middle East and North Africa inflated to equal 54% of GDP of these countries in 2019 due to expenditures related to COVID-19.
The World Bank indicated that the countries in the Middle East and North Africa witnessed a big increase in their debts because they compelled to huge borrowings to finance basic care and measurements of social protections. Debts of the oil-importing countries represent 93 percent of the total GDP in 2021.
The report of the World Bank warns that these countries in the Middle East and North Africa have no other option than to continue borrowing to fund health care and social protection as long as the pandemic stays. The region that comprises twenty countries witnessed a shrinking in their economies by 3.8% last year.
The World Bank (WB) estimates the accumulative retreat in economic activity by the end of this year by $227 billion. But the WB expects a partial recovery this year provided a just distribution of the anti-Corona vaccines.
The Middle Eastern countries do not suffer from this dilemma alone, but all other countries in the world. A country such as France records a big recession due to the pandemic of COVID-19. France's GDP diminished by 8.3% according to statistics published by the National Institute of Statistics (NIS).
The NIS assured that during the second lockdown in France, economic activity retreated at a moderate pace compared with the first lockdown from March to May 2020. In the fourth quarter of 2020, France's GDP diminished by 5% year on year. In 2019, France's GDP grew by 1.5% which was among the highest levels in the Eurozone.
In 2020 France witnessed the worst record recession since the Second World War (WWII). The COVID-19 pushed the French government and most other European and Western governments to suspend or reduce the economic activity to slash the number of infections.
For example, the economic consequences of the Coronavirus led to record losses at Renault Auto Group that estimated at 8 billion euro in 2020. The French group also lost 4.9 billion euro due to its Japanese partner, Nissan, that Renault took over 43% of its capital.
The truth that there is huge uncertainty shrouds the way that the world economy can pay the debts in the future without complicated fallouts on the economic activity. The current world economic conditions urge all countries to expense to handle the health crisis.
This means the countries will continue borrowing and expense as an overriding necessity to ensure stability in the countries.
Translated by Ahmed Moamar
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