Effects of Political & Social Unrest on Global Business
The scale of the COVID-19 pandemic has no historical precedent. No country or region has been left unscathed. We are living through an unparalleled global health crisis and a resultant economic disaster, precipitated by the arguably necessary mitigation measures governments have taken, worldwide. Unfortunately, crises like this tend to exacerbate ongoing political and social unrest; something all countries should diligently work to avoid
As the pandemic emerged, countries have had to take on unprecedented amounts of debt to temper short-term economic shocks. This, along with a combination of record lows in spending, investment, trade and employment have conspired to send economies across the world and across the socioeconomic spectrum, reeling.
It does appear however, at least on the face of it, that Q3 of 2020 will be somewhat better than Q2 and that a global recovery is slowly underway. But restrictions on travel and disruptions in the supply chain will continue to affect the global economy, possibly for years to come. It is safe to assume that a full economic recovery is several years away.
The Social Challenges
Globally, the world is facing many social challenges. In the USA, it is racial tensions and election fever. In Latin America, we are seeing socio-political turmoil and socialist policies wreaking havoc on societies and economies. In Europe, there is unrest over government spending and the stability of the EU. Africa’s social challenges are too diverse to effectively caption, but the pandemic has not been too harsh on the continent yet. In Asia, while social unrest is presently not severe and countries seem to be relatively effectively handling the pandemic, draconian lockdowns and other measures may lead to long-term economic woes and possibly social upheaval.
The Path ForwardThe Path Forward
If countries are to skilfully navigate through this crisis, they will need to strike a delicate balance between mitigating the health crisis and providing sufficient room for resumption of normal life and economic activity. The pandemic will end, like all other crises. And, like all crises, it will open up new opportunities. However, full resumption and recovery of economic activity will require relative social and political stability. Thus, ensuring this should be the primary focus of governments worldwide.