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Dominic Strauss-Kahn, among others, analyzes the risks and opportunities arising from the pandemic of the new crown, as well as its political and economic implications, denouncing the flaws in the architecture of the world economy and warning of a large immigration crisis scale.
Translated by Tryfonas Kaiserlidis
In a lengthy and lengthy article published in the Politique Internationale, the former head of the IMF and the former French finance minister points out that the crisis we are experiencing now is very different from previous pandemics, such as the Black Panolis of 1348 AD. or the so-called Spanish Influenza of 1918-1919 due to the globalization of the economy and the ease of travel. And it is, among other things, different due to the strict restrictive measures imposed on vast areas of the planet due to the high contagion of the crown and that “the” value “of human life has increased markedly in the collective subconscious of the most rich. ”
Shock in supply and demand
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As Dominique Strauss-Kahn points out, the economic crisis triggered by this pandemic is different from others on the planet because it impacts both supply and demand at the same time: “We will hardly avoid the effects of the supply shock, which results from restrictive measures , which by definition have necessarily been health-tested. With part of the workforce limited for an indefinite period of time, declining production is inevitable. Some companies will shrink, others will close. Jobs there, they will undoubtedly be lost for quite a long time. This is what happens in natural disasters, but they generally only affect part of the economy. And resorting to “temporary nationalizations” (.) It can save some, but not all, the companies.
The shock in demand is obviously due to various cumulative reasons. The incomes of a decreasing part of the population, the depletion of non-essential consumption, the markets that weaken due to restrictive measures, thus weakening the demand again. It is the well-known recession cycle.
Added to this is the depletion of financial assets. In a classic recession, the smartest management of financial assets is to wait for a return to normality if one is not forced to sell for one reason or another. Here, the return to normality will not be as before.
Some financial assets will drop to zero, as the companies they represent will close at higher rates than in previous crises. This discrepancy in financial assets suggests precautionary behavior, which further reduces overall demand. This “danger of destruction” by some savers had largely disappeared from the Great Depression and has now returned. And it is this synchronization of shocks in supply and demand that makes the current situation so different and so dangerous, “he said.
The collapse of economies that depend on raw materials and tourism.
Dominic Strauss-Kahn believes that The first consequence of the deadly crown crisis will be an economic collapse of countries economically dependent on raw material exports or the tourism industry.: “A certain number of exporters of raw materials and foreground oil-producing countries are going into crisis with insufficient foreign exchange reserves. The price of a barrel has fallen and those of copper, cocoa and palm oil have fallen Collapsed since the beginning of the year. For countries that benefit greatly from remittances from abroad, 2020 could bring a significant reduction in consumption and investment. As for tourist destinations, they will have to survive an almost total cessation of activity economic in the first half of the year.
East
economic flexthe threatens to
immerse millions of people
“Emerging middle class” in
extreme poverty More poverty,
however it also means more
deaths Populations in Africa
countries are younger but also more
fragile with the highest in the world
malnutrition rates, HIV infections
or even tuberculosis, something
can make it even more deadly
the crown furthermore where the
developed states can adopt
drastic restrictive measures, often this
impossible in densely populated areas
urban slums, wherever they are
difficult access to drinking water and
where residents don’t have the
luxury to stop working
or go shopping to buy
food The Ebola experience
has shown that closing them
schools – in which 180 countries have advanced
of the planet – often ends in a definite
student abandonment, unwanted
pregnancies and missed education
for a generation of students. ”
Will the Covid-19 pandemic trigger a new immigration crisis?
For these reasons, Strauss-Kahn expects a major new migration crisis as a result of the deadly crown pandemic. “Before the current crisis,” he wrote, “Europe was already facing the greatest difficulty in managing the flow of the hundreds of thousands of migrants who fill its doors.” What will happen when, driven by the collapse of the economies in their countries of origin, there are millions who will try to invade by force?
Even if
this scenario seems distant in
relationship to the current state of emergency,
even if the public has other
Concerns to deal with is a must
of detainees to predict crisis
that will come after the crisis. And to
Europeans are an absolute necessity
join forces to
expand efficiency
the monetary measures they take
for the same benefit for the emerging
countries, starting with Africa. ”
OR
Dominic Strauss-Kahn quote
analysis of a range of solutions for
dealing with the economic earthquake
triggered by his health crisis
lethal crown as “relief
debt for low-income countries
and the mass publication of specialists
Withdrawal rights [ ένα διεθνές
αποθεματικό περιουσιακό στοιχείο, που
δημιουργήθηκε από το ΔΝΤ το 1969, ως
εναλλακτική μορφή των υφιστάμενων
επίσημων συναλλαγματικών διαθεσίμων
των κρατών-μελών του] (which) are imposed
right now to contribute
in preventing an economic
disaster “.
The fragmentation of globalization.
At the same time, he says that we are witnessing “an organized coma and a sudden, but undoubtedly constant disintegration of supply chains,” caused by the coronavirus pandemic and restrictive measures. The actions of major central banks and governments “will only indirectly affect emerging economies,” he says.
He concludes: “It is therefore reasonable to expect a fragmentation of globalization and this may be an opportunity for Europe, if it knows how to take advantage of it … In order for the deck to be redistributed, the risk of a pandemic must be fulfilled. Profound , but above all, lasting global collective sensitivity. Wartime transport, which has been widely used, finds its application only in periods of mobilization. In the face of such a structural and at the same time global threat, we are likely to witness a change deep in collective preferences The first possible evolution of our collective preferences: the relationship with temporality When entering a world of infectious risks, it is necessary to correct our deficiencies and recognize our inability, especially in Europe, to give substance to the principle of prevention and cultivating a preventive approach: the embolism of health systems in developed countries is nothing but the yes It takes on a myopic political vision, which feels secure from any unforeseen event only due to the existence of interconnected and reactionary markets. Services Future decisions cannot be excluded from entry, especially in the long-term budget, or from a systematic strategic approach to the various priority areas of human life.
Beyond this first aspect, the risk of infection reminds us with the power of evidence of interdependence between individuals.
This is the whole paradox of restrictive measures: isolated in their homes, people have never before worked to restore the community. The health of all is no longer, as in the case of cardiovascular diseases and degenerative diseases, the consequence of the behavior of an individual: it depends on the responsibility of everyone towards the whole and vice versa on the capacity of the whole to assume responsibility for the health of the last member. of. The characteristic of viruses that this pandemic reminds us of is that they know no limits, socially or politically: no barrier, no wall will permanently protect societies from the risk of infection. In addition to the need to strengthen the role of the World Health Organization in the implementation of active prevention policies, the revival of this sense of interdependence must be strengthened so that a society of general mistrust does not emerge. ”
Translated by Tryfonas Kaiserlidis
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