The economic cost of Covid-19. Opinion

Covid 19 was one of the greatest disasters in history and it will be a long time before we will be able to recover from it from every point of view because its effects were in all spheres of society and economy.

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It is true that the greatest effect of the pandemic was on human life because of the number of people who lost their lives, those who suffered from the disease, those who have been left with sequelae and the psychological effect caused.

However, this publication aims to analyze this problem from the point of view of its economic cost and by making an assessment of three of the most affected areas that caused and have caused the greatest impact on a global scale.

Beforehand, the author clarifies that he is not an economic expert and that the criteria expressed here are the result of his analysis as a professor and common citizen. Having made this clarification, I leave you with this publication, which has no other pretension than to try to clarify an aspect that has not been very well treated and which will be complemented with the criteria and analysis of experts and lovers of these topics.

One of the advantages of teaching is to be able to analyze processes and phenomena in the most complete way possible. In my case, as a professor of Geography, I have been able to analyze the causes that have affected humanity from the physical point of view, with earthquakes, cyclones, volcanoes or droughts, and from the economic point of view with crises, bankruptcies of banks or states.

This has allowed me to write some articles related to these phenomena and their impact on the economy.

However, since a few days ago I have had this idea in mind, to expose the cost to humanity of Covid 19, but from the economic point of view. For this reason, here is my assessment of three essential aspects of the world economy.

Financial markets

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This is one of the areas that suffered the most in this pandemic stage and its effects are still visible. Its recovery has gone through attempts of revival, but again and again there is a downward process that shakes the international market.

Before 2019 there was a boom in the issue of cryptocurrencies and countries like El Salvador, with its president Nayib Bukele assumed this currency as the legal tender to carry out their operations and commercial transactions. Similarly, traditional currencies showed a stable performance with a period of sustained rise.

However, the loss of millions of jobs, the closure of numerous businesses, the lack of investment in important areas of the economy and the temporary closure of many services caused the international financial market to plummet or decline.

Minerals market

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The main mineral resources of the planet suffered a decrease in their production and consequently their income was significantly reduced. This is explained by the fact that the main mineral-producing countries were seriously affected by the Covid-19 pandemic, which affected all countries to a greater or lesser extent.

Leading minerals such as oil, natural gas, iron, copper, nickel, lead and zinc suffered a considerable drop and actions have had to be taken in the main production centers of these minerals to launch strategies to increase the prices of these products.

Food market

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If there was one market that suffered considerable damage, it was the food market and its effect was even more devastating because the economic profit of some countries depended on its production and, in the case of others, its production is the main source of income. In this sense, products such as rice, wheat and cereals were greatly affected because their main producers and exporters were among the most affected countries on a global scale.

Countries such as China, Russia, the United States and India were very affected in the production and export of these resources because they were among the most affected by the effects of the Covid 19 pandemic.

In general, it can be concluded that:

• The decrease in the number of commercial operations, job losses, business closures, decrease in services resulted in a considerable decrease in international commercial transactions and a reduction in the financial market, including conventional and cryptocurrencies.
• The paralyzation or closure of mines, oil wells and mineral industries brought negative consequences in the market of the producing and exporting countries of these items, which significantly affected the economies of these countries and had an impact on finances and the global economy.
• The lack of labor in agriculture, the paralysis of numerous companies and factories dedicated to the production and commercialization of food and the lack of labor in many places brought negative consequences that deprived many countries of food or raw materials for its production.
• For these reasons, the cost to the world economy of the pandemic amounts to billions of dollars and its consequences will be felt for years to come because recovery will be slow and will take time to achieve.

A final comment

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The World Health Organization has declared that, although there are cases of Covid in the world, this disease is no longer a pandemic. Nevertheless, the world economy is still not recovering. In none of the markets analyzed can we speak of an absolute recovery, although it is fair to say that other elements have had an impact on the non-recovery of the financial, mineral and food markets.

Note: I took the images from Pixabay and used the translator DeepL Translate.