The impact of the crown on the economy in general
Huge losses and large and temporary gains
Corona has entered the global economy recovery room
1- The supply side is affected due to production disruption due to the large number of infections with the virus, as well as measures to contain it.
2- The global demand side is affected, especially in the tourism sector of all kinds and the entertainment industry.
3- The spread of these effects globally as a result of the transmission of the virus through movement from one place to another, as well as as a result of the decline in global demand rates in the major industrialized countries. The Arab economies will be negatively affected through many channels, the most important of which is tourism, oil export revenues and other things. There are also some beneficiaries of the spread of the Coronavirus, as carbon dioxide emissions have decreased due to a decrease
Global industrial activity, as well as the possibility of benefiting many sectors
Such as: pharmaceuticals, telecom, and e-commerce companies. The institutions and economic countries will need some policies that will mitigate the negative economic impacts of the spread of the new virus.
The problem of Arab economies
It is not surprising that the global crisis of the spread of Corona virus casts its shadow over the Arab and international region, with its accompanying economic effects.
Although Iran is the country most affected by the virus in terms of the number of infections, many Arab countries, such as the Emirates, Iraq, Bahrain, Kuwait and Egypt have announced a number of injuries and deaths due to the spread of the epidemic in addition to the direct economic effects as a result of taking the necessary measures by some Arab governments. To reduce the spread of the virus among the population and its residents, it is possible that Arab economies will be negatively affected by the low rates of global economic growth for the reasons previously detailed in this report.
Arab countries are open economically, and are connected to the global economy through many channels such as tourism and oil revenues and exports.
This is at a time when some Arab countries suffer from political divisions and military conflicts, as is the case in Syria, Yemen, Libya and Iraq. What is happening in Palestine is not hidden from you, which casts a shadow not only on these countries, but also puts economic pressure on neighboring countries. As in the case of the refugee crisis in Jordan and Turkey. Likewise, levels of foreign direct investment in the region have fallen by about 4%, according to recent estimates by a study (10). Add to this the developments of the chronic oil price crisis since mid-2015, which appeared to be a price war led by the Kingdom of Saudi Arabia, which led to the decline in oil prices to unprecedented levels during the past three decades (less than 30 dollars per barrel) (11). In this context, we find that the outbreak of the Coronavirus is expected to make matters worse and raise the economic cost, in light of an area inflamed with geopolitical events, of course.
As for tourism, the movement of travel to the Arab region has stopped, as many Arab countries, such as Kuwait, have closed their air borders, while Saudi Arabia has suspended religious tourism for performing Umrah in an attempt to limit the spread of the virus. There are doubts about the ability of the United Arab Emirates to establish the international forum Expo 2020 Dubai, which is scheduled to be held in October – next October.
Oil is the main component of the exports of many Arab countries, especially the Arab Gulf states. In light of the decline in global demand rates, especially from China, as well as the failure of the OPEC group to adhere to the decision of low oil production in an attempt to control global oil markets, and to stop the decline in the price of oil to low levels, it is unlikely that oil prices will recover in the coming period, especially after Saudi Arabia announced its intention to increase Oil production during the next two months reaches 10 million barrels per day, and therefore, in a region that depends on oil revenues, the drop in the price of oil leads to a decrease in government revenues, which in one way or another directly affects the financial space available to these governments in the event of entering into economic corruption.
Revive the economy
In an attempt to reduce the negative economic effects of the spread of Corona, international organizations and various governments have sought to adopt a set of expansionary economic policies in the form of grants and loans, as well as increasing government spending, expanding tax exemptions and lower interest rates.
The International Monetary Fund announced the availability of $ 51 billion through financing facilities aimed at helping low-income countries and emerging markets in their efforts to contain the negative economic impacts resulting from the spread of the virus.
On the other hand, many governments and central banks in developed countries announced a set of different policies that would provide financial liquidity for companies and individuals affected by the spread of the virus.
for example? The British government has made available a financial package of 31 billion pounds plus a guarantee of 81% Corona
In the United States of America: President Donald Trump announced while in office a plan to stimulate the economy of the equivalent of a trillion US dollars, and to disburse cash to help American citizens during the global Corona crisis.