Economic crisis caused by coronavirus

A devastating blow to the world's economy

The coronavirus epidemic has a significant economic impact, particularly for countries that have resorted to containment. It's not just a health crisis. Several other areas are also impacted. Hence the economic crisis caused by coronavirus.

According to the latest World Bank forecasts, published on Monday 8 June, global GDP is expected to contract by 5,2 % en 2020. It is in the euro area that the decline, expected to 9,1 %, will be the most marked in the world. Never before have so many countries experienced such a recession at the same time since 1870.

The President of the World Bank, David Malpass said that "This is a devastating blow to the global economy".

It is estimated that the recession in poor and emerging countries should not exceed 2,5 % en 2020, against the odds 7 % developed countries. But the crisis in these largely informal economies will be more difficult to combat. The lack of sufficient budgetary resources and the limited administrative capacity to distribute aid such as unemployment benefits are the causes. (The World – 09/06/20)

Situation in Madagascar

In the great island of the Indian Ocean, economic panic adds to the health crisis with a collapsing currency and worsening consequences.

Despite the Covid-Organics remedy, the virus continues to progress. There are currently more than a thousand two hundred cases coronavirus. According to the latest statistics (This 11 June 2020), Madagascar has a total of 1 203 cases of coronavirus. Among these 1 203 Case, There are 882 case in case of treatment, 312 Healings, 08 serious forms and 10 Death. And the number of tests carried out amounts to 14 857, since the 19 March to the 09 June 2020.

Good sanitary measures or ?

As soon as the existence of coronavirus is announced in China, Preparations have been launched, including the revision of the national emergency plan ; Strengthening control at all international ports of entry ; and the delivery of necessary medicines and supplies to these points. Flights to and from China have been suspended since 10 February 2020.

The total stoppage of air rotations since, containment measures have profound socio-economic consequences. And these consequences are becoming more and more apparent. The country's financial capacity is very limited to meet all the needs. 80% State's annual budget still comes from the budgetary support provided by the partners.

For example, the needs of the plague epidemic 2017 were just 13 million U.S. dollars, much of which was to be funded by partners. For the purposes of COVID-19 in particular, The budget for the immediate emergency response alone amounts to 132 $ million. And this figure does not yet include the financial need for social protection and recovery, which are being finalized as part of a socio-economic plan.

Economic crisis caused by coronavirus : the private sector in arreasing

The private sector has repeatedly challenged the Malagasy State in the face of the current economic crisis. But the recovery plan prepared by the Ministry of Industry, trade with employers and other technical and financial partners is slow to come. This plan aims, in particular, to address employee concerns through a formal and informal sector employment and income safeguarding approach..

The tourism sector is heavily affected by this crisis. Single-on-one, more than 44 000 direct jobs 300 000 indirect jobs are affected. But it's not just the formal sector. The informal sector is also hard hit as working conditions in this sector are difficult. Egregious income disparities and social protections do not help employees at all. That is, long-term containment is far from sustainable for them.

To find a solution “set”

A meeting between private sector entrepreneurs and the President of the Republic, Andry Rajoelina, will take place this Thursday, confirmed on Monday Thierry Rajaona, President of the Madagascar Entrepreneurs' Association (GEM).

This meeting will be to discuss the steps to be taken safeguarding the economy and for social protection, two interdependent areas particularly affected by the coronavirus epidemic.

The President of the GEM says that hundreds of thousands of employers have already lost their jobs in the country since this health crisis. But the Economic Development Board of Madagascar (EDBM) confirmed in its report to the Senate, Last week, that 10 600 jobs 60% in textiles, have been impacted by this crisis and that the rate of partial unemployment is estimated at 27% currently.

During this meeting with the President of the Republic, GEM would propose business credit facility with banks with a very low interest rate. To do this, it asks the state to vouch for these companies. Private sector entrepreneurs would also expect this meeting with the Head of State support for workers who have lost their jobs or are in difficulty due, among other things, to the crisis. For this, the groups of these private companies had already proposed the mobilization of the Social Security Fund for employees. (Madagascar Tribune – 11/06/20)

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