Economic Collapse

Global Economic Collapse and Distress of Nations: Global financial leaders vow ‘action’ to stem virus impact

Global Economic Collapse and Distress of Nations: Global financial leaders vow ‘action’ to stem virus impact

Heather SCOTT, with AFP•March 3, 2020

Global financial leaders vowed to ward off a widespread financial crisis threatened by the coronavirus Tuesday, after the UN health agency said the world has entered “uncharted territory” with the outbreak’s rapid spread.

The deadly virus has marched well beyond China’s borders, spreading across Asia and Europe and into Latin America, Africa and the United States, where the number of deaths rose Monday.

More than 90,000 people have been infected and 3,100 killed since the virus first emerged in China’s Hubei province late last year.

The vast majority of cases have been in China, but South Korea, Italy and Iran have all emerged as hotspots. There are now nine times as many new cases recorded outside China as inside, according to the World Health Organization.

Global bourses have seen dramatic swings over the past week as concerns mount that the outbreak could threaten global growth and drive some countries in to a recession.

Leaders from Group of Seven countries — Britain, Canada, France, Germany, Italy, Japan and the United States — held emergency talks with central bank chiefs Tuesday, vowing to stem the outbreak’s impact.

“G7 finance ministers are ready to take actions, including fiscal measures where appropriate, to aid in the response to the virus and support the economy during this phase,” the group said after the conference call.

The US Federal Reserve announced a surprise rate cut Tuesday after the G7 talks — which did not include specific measures to boost growth — sending US and European markets surging.

The market swings come after the Organization for Economic Cooperation and Development (OECD) on Monday dropped its global GDP forecast to 2.4 percent, the lowest rate since the 2008-09 financial crisis.

– Uncharted territory –

Financial jitters followed a dire warning from the World Health Organization as the virus continued to expand its reach.

“We are in uncharted territory,” WHO chief Tedros Adhanom Ghebreyesus said Monday.

“We have never before seen a respiratory pathogen that is capable of community transmission, but which can also be contained with the right measures.”

Community transmission means infections within a population are not imported from another virus-hit area.

Countries across the world have imposed extraordinary measures in a bid to contain the virus, with millions of people across large swathes of China forced into quarantine.

Italy has also locked in entire regions, while countries across the world have imposed travel restrictions on visitors from badly hit nations.

Sports events, concerts and large gatherings of people have been cancelled or banned from France to Qatar and South Korea as governments scramble to beat back the outbreak.

The International Olympic Committee said Tuesday it was pushing ahead with plans for the Tokyo Olympics kicking off in July, ensuring it was “fully committed to” the event despite virus fears.

The virus has infected at least 230 people across Japan and been linked to five deaths.

– ‘At war’ –

South Korea remains the biggest infection cluster outside China, confirming 851 new cases on Tuesday, its biggest daily increase.

It has clocked a total of more than 5,000 cases, with 28 deaths. “The entire country has entered a war with the infectious disease,” South Korean President Moon Jae-in said.

By contrast, China reported 125 new cases Tuesday — its lowest daily increase in six weeks — with all but 11 infections in Hubei province, of which Wuhan is the capital.

The nationwide death toll rose to 2,943 with 31 more deaths, with some 80,000 total cases.

As China’s cases steady, the US now faces a potential epidemic, with six people dying in the northwestern state of Washington, where officials warned residents the battle against the disease was shifting from containment to mitigation.

The White House, which has been accused of downplaying the threat from the virus, struck a bullish tone.

Vice President Mike Pence declared that a treatment “could literally be available by this summer, or early fall”.

In Europe, attention turned to containment in several countries, including Switzerland where all soldiers were confined to their bases after a case of the virus was discovered in their ranks.

France, which has more than 200 cases and four deaths, closed dozens of schools on Tuesday in several virus-stricken regions.

President Emmanuel Macron said Tuesday authorities would requisition all face mask stocks and production in the coming months in response to the outbreak.

The announcement was followed by news that 2,000 surgical masks were stolen from a hospital in Marseille in France’s southeast.

The WHO also issued a warning Tuesday that supplies of protective gear to fight virus were “rapidly depleting” around the world.

Iran — which at 77 deaths has the second most fatalities outside China — saw a further rise in cases Tuesday as it confirmed its emergency services chief was infected.

Iran’s deputy health minister was diagnosed with the virus last week.

UN medical experts arrived in Iran on Monday to help tackle the outbreak after the country was accused of under-reporting deaths.

Senegal confirmed a case on Monday — the second in Sub Saharan Africa after Nigeria — while Brazil, Mexico, Ecuador and the Dominican Republic all have infections as well.

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