It will come as no surprise that the ongoing global pandemic continues to have a major effect on almost every industry and sector in existence. As soon as the world realised the true extent of the potential of Covid-19 in late February and early March of 2020, a blanket of uncertainty fell over the earth. While it is clear that the pandemic is, first and foremost, a health crisis, the impact it has had on international trade patterns is unquestionable.
The implementation of lockdowns around the world in order to contain the spread of the virus also meant that the level of global activity of all kinds plummeted. Furthermore, the World Health Organisation’s (WHO) announcement that the pandemic met the credentials to be classified as an emergency situation as well as the sudden hit on the supply and demand for products around the world resulted in a drastic decline in global trade. To put this into context, the second quarter of 2020 brought with it the largest one-period decline recorded in global merchandise trade.
One Surprise After Another
To say that 2020 was a year jam-packed with surprises would be the understatement of the century. And while many of the results of the surprises could be understood and predicted, the economic reaction to the global pandemic has thrown yet another spanner in the works. Yes, the second quarter of 2020 saw economic activity hit unforeseeable lows, however, the overall bounceback has come about both stronger and quicker than many experts initially predicted. But before we get too far ahead of ourselves, we must remember that the global pandemic has led to much weaker international and investment activity and global economies face a host of challenges as they continue in their attempt to return to pre-crisis levels of activity.
What Previous Recessions Can Teach Us About the Covid-19 Crisis
It appears the world has avoided another Great Depression, the severe worldwide economic depression that took place during the 1930s, however, the coronavirus has crippled the world economy. The global pandemic has left millions of people either unemployed or furloughed with governments around the world injecting trillions of dollars into their economies in an attempt to alleviate the damages. So while things could be worse, the pandemic has been a synchronised global economic shock on a scale that has not been seen since the second world war.
If we narrow our view from a global perspective to a more focused approach, it is likely to be how local governments react that will determine how soon individual country’s economies can recover. The current pandemic could be said to be the fourth economic shock of the 21st century and many will hope that governments choose to respond differently to how they did to the 2008 global financial crisis. On this occasion, many governments, especially in Europe, decided to tighten the belts, rather than spend. Fiscal austerity resulted in slow economic recovery, a decision which has drawn much criticism in the years since.
The Road Back
Instead, many experts are directing our eyes to the crisis of the Great Depression, which forced governments around the world to change their policies in order to create better opportunities for growth. These same experts state that the same must be done in response to the ongoing pandemic. While the situation differs from country to country and continent to continent, it appears that governments have learnt their lesson.
Despite the enormous debt that has been run up across the word in order to finance household income payments, furlough millions of workers and bail out businesses, interest rates remain low, which means that the costs of servicing the debt are not high, leaving space for governments to support their local economy. While interest rates will likely rise in the future, it appears necessary to spend now and save later in order to breathe life back into the world economy. It is often said that disruption is what ultimately creates the push to improve living standards and if you are looking at this from a half glass full perspective, this is the silver lining you should be holding on to.
The important thing here is for governments to make decisions that are motivated by solutions rather than base their actions on a feeling of fear. It is time to embrace change and make bold choices. So with all this said, what can actually be done on the ground level? For the final part of this article, we are going to take a look at one particular program in Australia that is already helping Queensland businesses break into new markets as part of the state’s economic recovery!
How Queensland Export Businesses Are Going Global
There are two types of people in the world, people who talk about doing things and people who take action. Annastacia Palaszczuk, the Premier of Queensland since 2015, is most definitely one of the latter. As part of the Go Global Export Program, she has recently announced the latest round of $500,000 funding grants available to help businesses overcome exporting barriers. The program’s aim is to help export-ready businesses to break into new markets and it has already helped upwards of 35 businesses receive business funding in Queensland.
It is initiatives like this and many others, including online business loans in Brisbane, that are allowing Queensland companies to respond to the ongoing challenges they face on a daily basis. These are the opportunities that help Australian businesses to take their products to the world and, in turn, helps the Australian economy to return to normal.
It is true that 2020 was a tough year for the economy and it is also true that many things remain uncertain. It is clear from the aforementioned initiatives that Queensland has decided to take this challenge head on and we can only hope that this serves as inspiration to any exporter who needs that extra push in taking on the world!