By Ricardo Evangelista
Speculating about what the post-COVID-19 world will be like, at a stage when we are all still experiencing the shock caused by the disease, could be compared, as someone said, with writing the review of a theatre play before the first act is over. The coronavirus presents itself as the greatest global challenge since World War II and crises of this dimension tend to leave deep marks, breaking long-established balances and laying the foundations for new eras.
The enormous costs of social confinement and consequent economic slowdown have forced public authorities to intervene decisively, through social action policies, subsidies and bailouts. In the West, and beyond, the last few decades had been of a neoliberal stance characterized by a discreet public sector, with the market being the main driver. The coronavirus pandemic changed this in just a few weeks and circumstances are not expected to return to what they were, any time soon.
One of the main differences between the pre and post-coronavirus world will be the renewed importance of the State, with obvious implications for taxation and public investment, among others.
The Western concept of individual freedom may also be tested; it is interesting to note entire societies have resigned themselves to social isolation, accepting all their steps are always to be controlled through apps developed to track the whereabouts of individuals. Now, this 'genie', once released, will not be easy to send back into the lamp. The political and cultural long-term impact of these new dynamics remains uncertain, but I foresee changes in the expectations and lifestyles of billions of people, happening within a context of prolonged economic recession.
As previously mentioned, we are still in the first act of this drama, however, after less than two months, patterns of change have emerged. If, on the one hand, the global economy has fallen into depression, oil consumption has declined sharply and tourism is in a deep coma; on the other hand, online shopping with home delivery has skyrocketed, as has the number of subscribers to video streaming services, while working from home is the new normal.
Companies with a solid financial situation, seen as the standard bearers of the respective industries, are recording huge stock value losses due to the pessimism of the markets regarding their future viability. Carnival, the largest cruise operator in the world, saw the price of its stock drop by more than 75 percent, while the oil giant Exxon Mobil's market capitalization is today practically the same as Netflix, which, conversely, appreciated more than 30 percent; Amazon, the giant of e-commerce, which was already the largest global company by market capitalisation, added an additional 25 percent to its value. All of this since the beginning of January.
The game rules are changing; the winners will not necessarily be the strongest, but the ones that best adapt. The coming years are likely to bring growth for the technology, renewable energy, home delivery and entertainment sectors. As for travel and tourism, oil and banking, there may be trouble ahead.
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