Pandemic Crisis-Geo-Economic Risks: Public Debt, Food, Inequality and Comparisons with Post-War Crises

Economic risks do not always arise from economic activity, but in many cases are the consequence of ex ante events or situations not related to financial aspects.

Geo-Economic Risks

To identify the negative effects of an event and when they occur to be addressed, a weapon such as economic intelligence and a connected vigilant intelligence society is required.

Consequences of the Pandemic in the Short- and Long-Term Horizon

The pandemic has blindly overwhelmed the process of slow economic recovery since the 2008 financial crisis, making it the worst known peacetime crisis and the third worst in the last hundred and fifty years.

But the emergence of Covid-19 in the first months of 2020 has exacerbated the pre-existing difficulties and created new ones, which are difficult to deal with without passing the world economy through a comprehensive or almost complete resolution of the pandemic.

• Covid-19’s invasion of a clearly unequal world has also affected economies differently; it has damaged ageing societies (EU, Japan, USA), despite its universal health systems and vaccinations.

• Vaccines were produced in record time.

• A new social inequality is likely to be created: that of vaccinated global citizens and that of unvaccinated citizens.

• The immediate economic consequences of such inequality will immediately reflect economic growth. The GDP growth of “unvaccinated nations” would slow because of the economic paralysis caused by Covid-19.

• Very few countries are expected to be vaccinated by the end of 2021.

• Comparative development and technological advantage and lead for the economies and societies that their citizens will be rapidly vaccinated.

• Unvaccinated countries will have reduced production and if they control specific food productions and raw materials in general there will be an increase in demand for them from developed economies creating inflationary pressures on them (due to increased demand and reduced supply).

• Citizens of developed economies will see their disposable income fall drastically and given the increased unemployment and the labour institution of teleworking, the poorest citizens will suffer because of increased food prices and their reduced disposable income. 

• The gap between rich and poor countries will widen further, slowing the global economy.

• The dramatic increase in the public debt of developed economies due to the economic impact of the pandemic will not allow them to deal in the short term with any fiscal or other type of crisis making it vulnerable in the future.

The road is difficult and long for all citizens in both developed and developing societies. With the latter, without excluding the former, to experience social explosions that will affect governments and political systems.