It also sowed the seeds of World War II, which then ended in 1945 with an even worse calamity that humanity has ever seen. The American forces dropped two atomic bombs on Japan, first in Hiroshima on 6 August 1945, and then in Nagasaki on 9 August 1945. Finally, the treacherous war came to an end, but at a brutal cost to all humanity.
With global economy in absolute decline by the end of World War II, people across the world faced food shortages, and total lack of other essential commodities such as fuel and medicines. Global leaders were compelled to sit under one roof at the “Bretton Woods Conference” in the United States to have serious discussions on rebuilding global economies. The World Bank and IMF were born out of these discussions and as a result global solutions in the aftermath of the world war were able to rebuild depressed economies.
These efforts still took ten years before the world was able to regain a growth momentum. By increasing production, pushing for an open economy and minimizing risks, economies, trade and investments began to flourish again. However, lessons were ill learnt as in 2008, the world economy again went into a recession, and this again took close to ten years to revive. The collapse of big banks like Bear Stearns, and then the Lehman Brothers ended the American myth that it is a country too big to fall.
The present Covid-19 crisis seems to be worse and even more scary as no one knows what we are dealing with. A microscopic creature, that is not visible to the naked eye, is causing havoc across the entire world. This phase could easily be termed as “The Great Lockdown”, and seemingly is more brutal than “The Great Depression”. Looking at the present scenario, the IMF thinks the global economy will sink into recession at a negative 3%, if things do not improve by the second quarter.
The current Covid-19 Pandemic has clearly become a serious problem at a global scale. Economic concerns are becoming severe by the day and need to be addressed globally. The whole world is awaiting a vaccine with abated breath, and this is without doubt the first and most important issue to resolve. This has to be closely followed by ways to recover the economies that have either slowed or are on the verge of complete collapse. Countries need to work together on many fronts, but also resolve their own national growth. Developing countries cannot emulate developed countries as they do not have the same resources to support growth with costly economic packages in the long-term.
Therefore, while waiting for radical solutions, it is necessary to be more alert and realistic and understand that economic rescue and support packages should now be considered just symbolic to meet immediate requirements only. Just like a doctor receives a patient with an incurable disease and prescribes a painkiller for temporary relief. Businesses now need to understand that salvation does not lie in rescue packages but long term solutions need to be adopted, keeping in mind a long period of a depressed global scenario.
