updated - October 21, 2021 Thursday EDT
Within the space of months, the world has been crippled by the sudden surge of COVID-19, leaving countries to find proactive ways to handle the economic impact. In Australia, this has meant the rapid introduction of economic stimulus policies, such as the JobKeeper scheme.
In April the head of the International Monetary Fund (IMF) stated that they anticipated "the worst economic fallout since the Great Depression," with only partial recovery to be seen in 2021, and the United Nations has predicted a global economic shrinkage of 3.2% for 2020. In this stark reality, how does Australia's economic response compare with others around the globe?
Economies have frozen around the world as governments keep workers home and shut down industries such as travel and hospitality. There are a few notable exceptions: Sweden, for example, chose not to lock down and close businesses, which led to less economic shrinkage but more than three times more deaths per 100,000 people than its locked-down neighbouring countries.
For those countries which have completely locked down, economic relief for local industries and workers has been a major policy issue. Australia has set out three economic stimulus packages totalling $194 billion, focused on subsidising wages, supporting cash flow for businesses, and stimulating investment and growth in local areas.
Broadly, this follows measures introduced by other nations. China has dedicated 2.5% of its GDP to COVID-19 relief measures including unemployment support and banking stimulus, though their stimulus response has been seen as 'softer' than others in their history. Major Western economies have also introduced sweeping economic stimulus policies.
These responses do vary, of course: Australia has introduced the JobKeeper payments for workers impacted by COVID-19, while subsidies for individuals in other countries have varied. In the United States, every individual is eligible for a cheque of up to US$1200, similar to another universal handout scheme in Japan.
Regardless of targeted stimulus packages in each country, unemployment has become a major factor of the international COVID-19 fallout. Unemployment in the US has hit 30 million people, 600,000 in Australia, and the UN warns that hundreds of millions of people worldwide could be put out of work due to the virus.
Income support policies are the interim measure to cope with this job loss worldwide, but the return back to "normal" will be through reopening economies. So how is this being handled worldwide?
After swift and forceful lockdown measures when the virus first emerged there in December, China saw a 6.8% drop in GDP, but as the economy now begins to reopen some are saying that the country is well on its way to recovery, perhaps even emerging stronger than before.
Some US states are reopening even amidst rising virus figures in an attempt to recoup economic losses, meaning that an estimated 54% of the economy will have reopened by mid-May, perhaps leading to a shorter-than-expected recession.
Indeed regardless of the level of infections, each affected country has begun to develop plans for reopening in the wake of shutdowns - including Australia's three-step plan for reopening businesses and travel. The UK, too, is beginning to introduce phased reopening to restart their crippled economy, though details are still scarce.
Even though most major economies have had to introduce unprecedented stimulus packages, many are also contributing to global recovery. The virus has disproportionately affected developing countries, which require support from the international community and NGOs. But experts say not to look to China to come to the rescue when it comes to global recovery, as their response has been muted.
As we see businesses begin to reopen in Australia at the end of "phase one" of the pandemic, no doubt the nation will be closely watching similar responses and outcomes in countries around the world. New waves of infections will mean a potential double economic downturn.
Though regardless of the progression of the virus, one thing many commentators agree on is that Australia is still only at the start of the COVID-19 economic crisis.
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