CONTINUOUS INTERNAL ASSESSMENT–I

WORLD’S ECONOMIC PRIORITIES IN THE POST-PANDEMIC

RECOVERY SCENARIO

Submitted by:

Atharv Sharma

Roll No. 89

Semester – I, Section – B

B.A. LL.B.(Hons.)

Submitted to:

Priyanka Tomar

(Assistant Professor, Economics)

 Contents
INTRODUCTION......................................................................................................................2

SECTOR-WISE ANALYSIS OF THE ECONOMY DURING COVID-19..............................3

PRIMARY SECTOR..............................................................................................................4

SECONDARY SECTOR........................................................................................................4

TERTIARY SECTOR.............................................................................................................4

NAVIGATING THE ECONOMY THROUGH THE PANDEMIC...........................................5

GLOBAL REFORMS............................................................................................................5

UN POLICIES AFTER COVID-19.......................................................................................5

SPECIFIC REFORMS IN INDIA..........................................................................................6

CONCLUSION..........................................................................................................................7
INTRODUCTION

One of the most profound economic breakdowns witnessed by societies across the globe due
to pandemic, infamously known as Covid-19, had left them transfixed in stupefaction. All
countries worldwide witnessed nationwide lockdowns that endured for several weeks, far-
reaching impact of which reverberated across every imaginable aspect of human life. The
pandemic was a wake-up call that exposed the fragility and lacunae of modern economic set-
up. Even the most powerful and fastest-growing economies were not able to escape the
repercussions of the Covid-19 virus.

The pandemic set the economies of countries years back on an unprecedented scale. The
global GDP during the peak of the pandemic shrunk by 7.2% while India’s GDP itself shrunk
by about 7.3% which was the lowest since India’s independence. 1 The unemployment rate
worldwide soared, reaching 14.7% in the U.S. and 24% in India. The volume of global trade
plummeted due to travel restrictions and worldwide lockdowns due to which trade fell by
13% which was the highest since WW-II.2

The pandemic forced nations all across the globe to face a profound dilemma as they were
conflicted with saving lives and livelihoods as well as supporting a plummeting economy.

1
Niti Kiran, Global GDP shrinks 7.2% in Q2CY20; records worst fall since 1997, BUSINESS TODAY,
https://www.businesstoday.in/latest/world/story/global-gdp-shrinks-72-in-q2cy20-records-worst-fall-since-1997-
273930-2020-09-25.

2
Trade falls steeply in first half of 2020, WORLD TRADE ORGANIZATION,
https://www.wto.org/english/news_e/pres20_e/pr858_e.htm.
SECTOR-WISE ANALYSIS OF THE ECONOMY DURING COVID-19

Though the pandemic affected the entire world economy, its impact on different sectors was
incongruent.

PRIMARY SECTOR

The primary sector, which consists of endeavours related to farming, animal husbandry, etc.,
was relatively resilient. Food, being a necessity rather than a luxury, posed as an inelastic
good whose demand and supply remained somewhat consistent.

Though the output of the primary sector fell, the decrease was not as drastic as compared to
other sectors. The World Bank estimates that the agricultural output in developing countries
fell by 2.6% in 20203 and global mining output fell by 2.2% in 2020.5 Similarly, by UNFAO
estimates, global fish production fell by 3.1% in 2020.4

SECONDARY SECTOR

The secondary sector, which consists of Industries, Manufacturing endeavours, was critically
hit by the pandemic as nationwide lockdowns forced labour to sit at home, demand to fall and
industries to shut or scale down.

The International Monetary Fund estimates that global manufacturing output fell by 15.4% in
2020.6 In addition, the International-Labour-Organization estimates that global construction
employment fell by 9.6% in 2020.7

3
Quaglietti, L., Global Economic Prospects, June 2021, WORLD BANK,
https://documents.worldbank.org/en/publication/documents-reports/documentdetail/355381623224494651/
global-economic-prospects-june-2021.

4
THE STATE OF WORLD FISHERIES AND AQUACULTURE 2020, SUSTAINABILITY IN ACTION, Food and Agriculture
Organisation, https://doi.org/10.4060/ca9229en.
5
COMMODITY MARKETS OUTLOOK: URBANIZATION AND COMMODITY DEMAND, OCTOBER 2021, WORLD BANK,
https://openknowledge.worldbank.org/server/api/core/bitstreams/7b201a1b-fdef-5260-af55-
1d0aab9146ec/content.
6
WORLD ECONOMIC OUTLOOK: A LONG AND DIFFICULT ASCENT, INTERNATIONAL MONETARY FUND,
https://www.imf.org/en/publications/weo/issues/2020/09/30/world-economic-outlook-october-
2020.
7
WORLD EMPLOYMENT AND SOCIAL OUTLOOK – TRENDS 2021, INTERNATIONAL LABOUR
ORGANIZATION, https://www.ilo.org/global/research/global-reports/weso/trends2021/lang--en/
index.htm.
TERTIARY SECTOR

The tertiary sector, categorized by services such as transportation and retail has been the
hardest hit due to the pandemic as businesses have closed or scaled back operations. The
sector has also been affected by the decline in demand for services.

The impact of Covid on the sector’s output has been catastrophic with transportation hitting
rock bottom due to travel restrictions and supply chain disruptions. According to the
International Air Transport Association estimates, global air passenger traffic fell by 60.7% in
2020.58

NAVIGATING THE ECONOMY THROUGH THE PANDEMIC

As the world’s economy crumbled, certain reforms were necessary to ensure its resurrection.
These instances compel us to overhaul the economic set-up of our societies to ensure better
resilience towards these impediments of the global economy.

GLOBAL REFORMS

 Increased investment in infrastructure(healthcare,transportation,etc.) to spur economic

growth and create jobs.

 Increased cooperation: The pandemic has shown the importance of international

cooperation in responding to global challenges such as vaccine development,
economic recovery, supply chain rebuilding and climate change.

UN POLICIES AFTER COVID-19

 The ACT-Accelerator: Global initiative to accelerate the production, development and

equitable distribution of COVID-19 tests and vaccines.

 The UN Framework for the Immediate Socio-economic Response: It outlines a set of

policies to mitigate the social and economic impact of the pandemic.

 The Sustainable Recovery for All, a UN report that calls for a global recovery that is
equitable, inclusive and sustainable.

58
ANNUAL REVIEW 2020, INTERNATIONAL AIR TRANSPORT ASSOCIATION,
https://www.iata.org/contentassets/c81222d96c9a4e0bb4ff6ced0126f0bb/iata-annual-review-
2020.pdf.
SPECIFIC REFORMS IN INDIA

Financial sector reforms: Government announced various reforms, including increasing

capital requirements for banks, enhancing risk management practices, and bolstering
oversight of the financial sector. The government also announced plans to set up a ‘bad-bank’
to deal with the mounting pile of ‘non-performing-assets (NPAs)’ in the banking system.

Labour market reforms: To make the labour market more flexible and versatile, including
ebbing employment protection, making it easier to fire and hire workers, and increasing
training and retraining programs to improve skillsets. In addition, the government also
announced plans to implement a ‘national apprenticeship program’ to help youngsters get the
skills they require for the workforce.

Trade reforms: To schemes to make the economy more open to trade and investment,
including reducing tariffs and other trade barriers, and supplementing businesses to import
and export commodities. The government also signed free-trade agreements with
USA,EU,Japan,etc.

Tax reforms: To make the tax regime more efficient and equitable, including reducing the
number of taxes, simplifying the tax code, and increasing the progressivity of the tax system.

Apart from these, the government also introduced several schemes to improve market
outcomes, such as:

 Production Linked Incentive (PLI) scheme aims to attract investment by offering

incentives in high-tech manufacturing sectors such as electronics, pharmaceuticals,
and textiles.

 Ease of Doing Business reforms which made it easier for businesses to operate in
India by simplifying the regulatory environment, reducing the number of licenses and
permits required, and making it easier to access land and credit.

 Atmanirbhar Bharat Abhiyan, National monetisation pipeline and Skill India Mission
are more such examples.
CONCLUSION

This essay exhibits the economic priorities of the world in a post-pandemic recovery scenario
and the economic reforms implemented by nations to pursue those priorities. The detailed
explanation demonstrates the main focus of governments all across the globe i.e., on
healthcare, service sector, etc. It also zooms on a variety of schemes announced by the
government to supplement the economy and facilitate people suffering the most during the
crisis. Thus, the global priorities after covid can be easily extracted from the essay.