The new coronavirus could dampen emerging markets
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There are a lot of unknowns with COVID-19, but it definitely isn’t good for the global economy. On Monday, oil markets crashed more than 30%, 10-year Treasury yields dipped below 0.4% and the Stoxx Europe 600 Index fell the most since 2016.
Ian Bremmer, founder of the political risk consultancy Eurasia Group, said this upheaval could be especially challenging for less-industrialized countries.
“The global economy was already softening. A lot of big investors weren’t looking to put more cash in emerging markets. And now those countries look scarier,” Bremmer said in an interview with Marketplace’s David Brancaccio.
“Especially if this coronavirus plays out in their own countries with outbreaks — nevermind the problems of supply chain and global slowdown — they’re the ones that are going to get hurt the most.”
But there could be a silver lining for some countries as companies look to diversify their supply chain in the future.
“One thing that you are going to see is a tipping point towards globalization and regionalization. Suddenly companies are finding that having awful lots of labor in China makes them really vulnerable to disruption,” Bremmer said.
Click the audio player above to hear the full interview.
COVID-19 Economy FAQs
What’s the outlook for vaccine supply?
Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.
How has the pandemic changed scientific research?
Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.
What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?
Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”