With increasing waves of nationalism throughout the world, we had thought that globalisation was in
retreat. But the Corona virus threat has proved us wrong. In the new networked world of the social media, a virus, like all other intangibles, can sail past all physical walls. Apart from an epidemic, Coronavirus (Covid-19) is an ‘infodemic’. The world has seen deadlier viral attacks like SARS and Ebola, which killed many more people than Covid-19 has so far but those attacks happened before we were introduced to the social media.
Covid-19, armed with misinformation, is creating tremors in the stock market throughout the world. Travel and tourism industry is in a state of shock. Nevertheless, many investors, like Blackstone, see opportunities in this crisis. Its CEO, who is in India now on a business trip, describes this global viral attack as a “Black Swan” event. “It is completely unanticipated, but here you are. The assets you own will go down in value temporarily, but the opportunity to deploy capital, I think, will be greater than what people suspect,” says Stephen Schwarzman, Chairman CEO of the Blackstone Group.
The crisis in India is perhaps sinking deeper with the collapse of the Yes Bank. Though unrelated, the two events have been troubling industry – and society too – for some time now. They have created a kind of uncertainty which is unhealthy for any kind of growth. State Bank of India has however come to the rescue of Yes Bank, indicating
that the public sector, in spite of the inefficiencies, is still relevant today in India. But the depositors of Yes Bank
are still jittery and only hope that things will be normalised by April 1, as promised by the Reserve Bank.
In case of the virus, we are flooded with rumours especially through whatsapp messages which are coming up with suggestions of all kinds of remedies. There isn’t any vaccine, and the panic is palpable. China, where the
corona virus is supposed to have originated, has shut shop; and the country being the ‘factory’ of the world, has
become a different kind of a threat: supply of all spares, especially of electronic goods, may come to a standstill if things don’t improve soon. True, China is working hard to disinfect whole cities and building hospitals within ten days. But none seem to give us any hope as to when this chaos will stop.
The virus, surprisingly, goes beyond the health issues and is weakening the economy. The CEO of Blackstone Group, for example, thinks that the virus will ultimately pull down the world’s gross domestic product. One cannot
rule out quite a few hostile takeovers and acquisitions, when values of industrial units go down, however temporary it might be. While the banks are not in a position to encourage borrowers, risk taking has also reached an all-time low. These are times for distress sale and hyper-activity of takeover sharks.
The World Health Organisation (WHO) has now declared an ‘infodemic’ that is confusing people. Confusion spreads fear. The mortality rate of Covid-19 is 3.4 %, whereas for SARS it was 10% and for Ebola it was 34%.
The good news is that Covid-19, after the vigorous attempt to disinfect entire cities is subsiding in China and the factories are reopening. But its after-effects, especially in the worldʼs stock markets, are still disastrous. But the news spread by WhatsApp, for example, the latest one of Dr Francis Boyle who is described as the creator of BioWeapon Act in the US, and who has supposedly said that virus is a biological warfare weapon, is more dangerous than the virus itself.