The devastating impact of Covid-19 pandemic has shrunk the world economy by 4.4% and global trade by 5.3%; job losses have been estimated to be to the tune of 75 million. Around the world, countries have responded to pandemic-induced shortages with protectionist reactions and nationalist aspirations with the potential to disrupt complex cross-border supply chains. There are unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.
Building Back Economy
- The Second World War created sustainingmultilateral institutions; besides the United Nations, the Bretton Woods Institutions such as World Bank and International Monetary Fund (IMF) and International Trade Organisation (ITO) were created to help rebuild the shattered post-war economy.
- The General Agreement on Tariffs and Trade (GATT) was negotiated in 1947 as a meansto reduce barriers to international trade.
- The oil shocks of the 1970s led to the establishment of the International Energy Agency (IEA) in 1974 to manage oilsupply disruptions and went on to create awareness on the need for global energy security.
- The financial crisis of 2008 led to the G20 Leaders Summit, an elevation from the G20 Finance Ministers forum in 1999, in a bid to take cooperation beyond the G7 in a global quest to control inflation due to fiscal expansion.
- These developments had a consequential impact on global trade, with dramatic surges in volumes; from a mere USD 60.80 billion in 1950 to USD 19,014 billion in 2019.
- The patterns above leave much hope for optimism for global trade in the post Covid-19 crisis in the collective belief that international trade is vital for development and prosperity, while competition is central to generating competence.
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