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Coronavirus – The Effects Beyond Healthcare

Coronavirus – The Effects Beyond Healthcare

China’s novel coronavirus, COVID-19, has killed and infected more people than officially reported.

Consider the latest numbers. In one day, total reported infections and deaths increased 44 percent and 23 percent, respectively. But not “because of any change in the shape of the outbreak,” which is nonetheless growing near-exponentially. Instead, it was merely because “the government changed the criteria by which it tracks confirmed cases.”

The official tally has been underestimated and is still catching up to reality. As of Saturday, more than 1,500 people had reportedly died of the virus, with more than 69,000 cases reported worldwide. About 99 percent of the cases have been reported in China.

These numbers could be a fraction of the total cases. China seems intent on slamming the door on the truth; they don’t wish to allow the outside to see how bad things indeed are. China has closed off much of their nation to outsiders, so the virus, in reality, is much worse than thought.

How The Global Economy Is Affected

Because of the global economy, everybody is affected; this is going to have ramifications worldwide. When something, like the coronavirus strikes, it can shut down whole areas of manufacturing.

A great example is the automobile manufacturing process, unlike in the early days of Ford, where they held their Iron-working plants, smelting, and casting, then went on to manufacture all parts needed for their vehicles, today manufacturing entails ordering parts from all over the world.

Today everything in manufacturing is more a complex set of steps, ones that start with detailed planning, ordering of goods from all over the world, these are then set in motion, in advance, to arrive at the needed time to assemble the vehicles.

Due to a desire to not hold more inventory then is needed, these parts arrive on time and are used in the manufacturing; this way, production moves forward like a performance on stage. But what happens when part of this is disrupted with something like the coronavirus.

China is the great hub of manufacturing, and they have cornered much of the market, and have done so on purpose. Our manufacturing base, while growing under Trump, is still just a fraction of the size it used to be; this then shrinks the number of available suppliers.

In an ideal world, you would spread out your supply chain with multiple sources; this way, if something happens that disrupts one, you can have the others pick up production and cover. This ensures that no stoppages happen, although, at times, they may slow down.

With China corning much of this, the problem comes in when we have a stoppage there; the whole machine has to be shut down due to a lack of parts. We no longer have the ability to draw off of others that are doing the same, asking them to pick up production to cover for the shortages, to fix this we have to build up from scratch, this is a huge problem.

If nothing else shows the wisdom in Trump’s calling for diversified manufacturing this does, we have become so dependent on China, when faced with such crises as we see now, shortages arise. One must wonder, how much worse would it be if a conflict arose with the two and all supply was cut off?

Coronavirus is a terrible thing, and when it is all done running its course; it could end up taking more lives than the influenza outbreak at the beginning of the last century. But how the economy will be affected will be much worse now than back then. We did not have a global economy then.

Image result for 1918 spanish flue

1918 Spanish Flu

As is shown by a research paper by Thomas A. Garrett in 2007:

The Spanish Flue of 1918 saw 1/3 of all humans infected with the virus, of those 20 – 50 million died (records were not as well kept back then). While I don’t think coronavirus will see as big of an infection rate, one has to remember, the world in 1918 held a population of under 2,000,000,000, if we see the same numbers, the coronavirus would still not be as bad as the Spanish Flu was.

To put these numbers in a better perspective, if this happened today with the Coronavirus, we would be looking at 2.5 billion people infected and a death rate of 100 – 250 million.

I am not implying that is what is coming our way, the reality is back then medical aid, while was vastly improved over what was known just 50 years prior, was still very primitive compared to what we have today.

But there are differences as well. In 1918 the primary form of intercontinental transportation was by ship. However, they did have planes back then; they were not able to travel the way we see now, with hundreds of thousands of people flying from country to country by jet. If this did grow to what the 1918 Flu was, this could be much larger.

The other problem shown in this study is that population density caused a more significant number of cases than in rural areas. Today our world is much more urbanized, unlike in 1918, where much of the nation and world were still very much in the country; very little of it is now. We can see the effect by looking at the cruise ship where they are quarantining vessels due to an outbreak; this is due to the close quarters of the passengers.

The World Bank estimates that a global influenza pandemic would cost the world economy $800 billion and kill tens-of-millions of people [1]. If this blows into a full pandemic, which signs are starting to show it could, researchers at the U.S. Centers for Disease Control and Prevention calculate that deaths in the United States could reach 207,000 and the initial cost to the economy could approach $166 billion, or roughly 1.5 percent of the GDP [2].

Image result for global economy

In Conclusion

To bring this back to the real world, let’s go back and look at the car. In today’s world, with a global supply chain, let’s say you get your electronics from China, you seating from Mexico, your steering wheel from Hong Kong, the rubber seals from Indonesia, so what happens when this whole supply chain is cut off or interrupted?

With all our eggs in one basket, when it’s tipped over, and the eggs are broken, and we only have one supplier, the whole business gets shut down until we can find another supplier, this is the Achilles heel of a global supply chain.

By cornering the market, China has enriched itself and controlled much of the market, but they also put the market at risk by making themselves, in many cases, the sole supplier.

This is why we need to bring businesses back home, even designate them as vital to our national security, if necessary to have the government aid in funding this, this way if such a thing happens again, or worse, a conflict arises, we are not in the same shape we are rapidly finding ourselves headed towards now.

Coronavirus is terrible; there is no wish to make light of the health ramifications of this, lessons need to be learned out of this, our need to break our dependence away from China is one of them. The best thing we can do is to learn from this, to make sure that another health pandemic in the future does not threaten to cripple us as this one could if it continues to grow.

  1. Brahmbhatt, Milan. (Sept. 23, 2005) “Avian Influenza: Economic and Social Impacts.” Speech. World Bank, Washington, D.C.
  2. Meltzer, M.; Cox, N.; and Fukunda, K. (1999). “The Economic Impact of Pan-demic Influenza in the United States: Priorities for Intervention.” Emerging Infectious Diseases, 5(5): 659-671.

About The Author

Timothy Benton

Student of history, a journalist for the last 2 years. Specialize in Middle East History, more specifically modern history with the Israeli Palestinian conflict. Also, a political commentator has been a lifetime fan of politics.

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