ADOPTING GREEN ECONOMY- A MUST FOR WORLD ECONOMIC RECOVERY

IMAGE SOURCE:- <intelligentliving.co>

Now that the countries have started relaxing lockdown rules amid corona virus scare that put almost entire earth in lockdown mode and confine people to their homes for more than two months, the countries have started opening up their economy gradually which is at the verge of underperforming or even critical. According to various economists and financial experts, almost all the countries will likely to see shrink in their GDP and economic performance on global level. So what is the solution for better job boosting economy?

The simple answer is ‘GREEN ECONOMY’, one which is being continuously put forward by various economists and world environmentalists as the only solution to conserve non- renewable resources present on earth while also ensuring that economy achieves its maximum objectives. Especially now in times of world crisis, countries have a chance to introduce green economy policies including green economic infrastructure. There is no general definition except one which is provided by United Nations Environment Programme. It defines “Green Economy” as an economy that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. There are numerous benefits of implementing green economy like:-

1. Upon implementation of green economic recovery policies, there will be drastic reduction in pollution which has been primary cause of more than 7 million deaths around the world annually.
2. It will certainly bring climate threat under control which many countries have started facing with abnormal weather conditions, large scale bushfires, global snow melting, rise of sea level on earth, shrinking of water resources, deforestation etc.
3. Investing hugely on renewable resources like wind energy, solar energy etc. will put less risk on earth limited non-renewable resources hence conservation of it for future generation will be beneficial and this pandemic situation in our only chance before things go out of our hands for worst.
4. It will result in creating jobs especially in energy sector and nature based sectors. Recently, Adani Green group won prestigious $6 Billion solar power plants project in India which will likely to create 4 lakh jobs over the span of five years.

This is the first time when not only environmentalist are urging governments to introduce green economy recovery path, but also similar sentiments is being echoed by world investors, financial institutions, business leaders, job creators . On World Environment Day, global institutions working on developing labour and environment have united around key actions for spurring a green, just and transformative recovery.[1] They have identified ten policy options that will guide towards green recovery:-

1. The green economy principles of well- being, justice, sufficiency, efficiency,
2. Advance green deals, economy plans, industrial strategies to built long  term prosperity
3. Financial stimulus package must be structured in a way that it will accelerate towards green economy
4. Recognize the role of nature in reducing systematic risk
5. Invest in sustainable infrastructure and stronger environmental protection.
6. Strengthen and broaden inclusive social protection mechanisms
7. Accelerate energy transition and tackle fossil fuel subsidy
8. Apply gender responsive approach
9. Give priority to small and informal enterprise to accelerate the power sector
10. Improve global cooperation and coordination to effectively respond to pandemic crisis.

However, in immediate run, the governments are not reluctant to formulate and execute green policies because their focus is on creating better facilities and resources in health sector, attract investments to ease the burden of debt, job creation.

The ball is now in governments hands as to how fast and effectively they introduce green policies which are the need of the hour. The sooner they introduce policies be it of corporate, industrial or investment nature that also promotes and protects nature, the sooner the state will be on the path of  eco-sustainability and hence will be in a position to avoid any future pandemic. UK, The European Union and Australia are the ones that are racing ahead in executing green economic policies while countries like USA, India and China have yet to act prudently. This is our only chance to act in sync with nature before another pandemic like situation hits us.

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[1] <https://www.undp.org/content/undp/en/home/news-centre/news/2020/global-institutions-unite-around-key-actions-for-green-and-fair-.html>

IT’S A VICTORY FOR NEW ZEALAND – FIRST SOUTH PACIFIC NATION TO BE FREE FROM NOVEL CORONAVIRUS

IMAGE CREDIT- <newzealand.com>

It became eighth nation to declare itself free of any active coronavirus case? So what it did successfully that many developed nations could not?

On Sunday at a news briefing in New Zealand, Prime Minister Jacinda Arden declared that New Zealand has successfully eliminated transmission of novel COVID19 and is ready to open its economy and day to day life without any restrictions. This wonderful news came at a time when still more than half of the world is still grappling with active cases of this pandemic disease including in nations like USA,UK, India, China, UAE etc. So what a small nation like New Zealand did which even giant economies could not able to do to contain this virus disease?

New Zealand is a country of Five million people. Although population is not large as to other countries including Australia yet the course of action its health ministry did is definitely commendable. It pursued an ‘Elimination Strategy’ to beat deadly coronavirus which means it eliminated ‘chains of transmission’ of virus among people successfully for 28 days since June 15.

Health experts are of the view that due to its isolated location in the South- Pacific region, New Zealand had ample amount of time to notice the outbreak of this disease in other countries and for seven weeks, it went on complete lockdown with movements allowed only for essential workers. During seven week lockdown there was no news of people violating any government restrictions that were put in place. All these factors successfully averted any chain reaction of virus among its people. Due to strict government action and active participation by its citizens, only 1500 people contracted the virus including 22 death.

However, New Zealand Prime Minister took note of the situation that from Tuesday all restrictions will be lifted except border closure restriction and that there is a possibility that incoming cases of coronavirus may be found in people entering into New Zealand via airways.

New Zealand became eighth country to join exclusive group of nations successfully ending active COVID19 cases according to Johns Hopkins University. Besides New Zealand, Montenegro, Eritrea, Papua New Guinea, Seychelles, Holy See, Saint Kitts and Nevis, Fiji, East Timor have either have successfully eliminated any active cases.

Developed and Developing economies must consider the policies adopted by these nations’s government in containing growing active cases in their countries and must implement it in their policies. These 8 countries can now look forward to accelerate their economy without any restriction and loss of life due to coronavirus whereas other nations who have lifted restrictions partially or completely are still at huge risk of losing lives and more spread of this pandemic disease.

“It’s time for big nation to learn from so called small nations”

BRACE FOR THE IMPACT OF COVID-19 ON ECONOMY

IMAGE CREDIT- nature.com

The world economy was facing the implications of US-China trade war over the last two years or more when recently it was hit with another historical event that has not only put human survival at risk but also global market in the form of COVID-19 also known as ‘Corona virus’ of which initially China was epicenter and it wasn’t spread beyond the territories of China till mid-January, 2020 and so was not a concern at international level. It all change in February when more people outside China contracted this disease. It spread like a fire in rest of the world with more than 140 nations affected by it. As a result, World Health Organization (WHO) declared it as ‘Pandemic’. As of now, more than 90000 people have been tested positive and more than 3500(at the time of writing) people died. As a result of surge in global spread of this disease of which cure is not yet known, it is badly affecting economy all around the world.

 Internationally, stock exchanges are crashing each day leading to suspension of trading on it in various countries like UK,USA, Phillipines ;global market has become volatile and is in panic mode as evident in bonds, gold and commodities; investors are suffering huge loss not just in India but globally too same thing is happening; international trade has come to a halt for indefinite period of time and it is badly affecting the free flow trade among countries with many nations have closed their borders and air services in order to control the pandemic situation. In light of the ongoing situation, people are being forced to work from home which has further created another economic challenge. Many people are facing either job cuts or wage and income cuts due to non-operational of business sector. Among the sectors of economy, the one which is facing maximum hardship is the manufacturing sector due to non-availability of not just raw material due to limited import- export services but also non-availability of labour.

Various corporations be it huge or small scale business houses, startups, firms have closed their offices until further orders from their governments. There is also panic in not just international market but also domestic market. People are anxiously stocking up essential goods and as a result, there is either shortage of products or they are available at high prices which not all sections of society able to afford.

 In such testing time, the world economy is certainly brazing itself to face and survive in COVID-19 hit economy. Many market experts believe the existing market situation will get worse as time progresses and it may result in financial inequality, economic pressure.

IMPLICATIONS ON  WORLD ECONOMY

Under government instruction to control the situation, business firms and shops are taking precautionary measure and are not operating. This has certainly disrupted normal business flow both domestically as well as internationally, so now one question which everyone is concerned about is how this pandemic disease going to impact economy, its various sectors, market forces and for how long?

While at this point of time, economist and market pundits cannot predict for how long such market disturbance is going to continue and within how much period of time, situation in market returns to normal, yet they definitely has answers as to how COVID-19 will affect global economy and they have serious concerns. Some economists are of the view that the world is going through recession similar to events occur in 2009 and there is very limited scope of economic expansion. According to ETAuto.com, the USA, EU region is likely to witness negative growth and China is likely to grow at scant rate of 1.5%. India too will face similar growth cut and its GDP is expected to grow at the rate of 5.3% instead of 5.4% by one of the leading global ratings agency Moody. Among the sectors that are worst hit by the pandemic is travel and tourism industry. Many people are on the verge of losing their jobs or salary cut. Unemployment was already high in 2019 and this shutdown has made the situation far worse. Similar situation is happening in USA where reports suggest that unemployment rate is highest since 1929-30 and there entertainment industry is worst hit due to shutdown of movie theaters, productions.

HOW THE GOVERNMENTS HANDLING IT?

However, governments around the world have declared or in the process of declaring ‘economy booster packages’. In USA, President Trump has announced to purchase corporate bonds worth $1 trillion and has speed up the plans to deposit $1000 directly to American citizen’s bank accounts to give them emergency financial aid. UK, Spain and France have also announced emergency financial packages for payment to employees and providing loans and guarantees to companies to survive economic blow it is facing due to corona virus.  India has set up ‘Covid-19 Economic Response Task Force’ to decide on relief packages for sectors hit by pandemic outbreak as soon as possible.

In this dark economic time, there is little hope of economic recovery as much depends on how soon medical professionals and researchers come up with a ‘cure’ that is effective in trimming the hazardous effects of virus on human race. One ray of hope is that in the last 2-3 days , China has reported zero locally transmitted cases and if the same trend continues will benefit China on path to economic recovery soon. But until then, we have to brace the impact of the impact of this pandemic disaster with the hope for a ‘Better and Prosperous economic future’.