While the number of cases in the coronavirus pandemic has reached 1 million in the United States, the number of Americans who have lost their lives has exceeded 56,000. The pandemic sounds a serious alarm, not only in social and cultural fields but also in the economic field. Approximately 26 million Americans have applied for unemployment benefits in the past five weeks, and new unemployment claims are expected with the latest figures to be announced this Thursday.
According to a new survey conducted by The Associated Press (AP) and the NORC Center for Public Relations Research, 63% of Americans think that the country’s economy is “weak.” When we look at the reasons for the negative trend, loss of income is due to low wages, unpaid leave, reduced working hours or job loss. Around 23% of adults who had jobs when the outbreak first started claimed that they or a member of their household was fired.
Traders who have been avoiding oil sent U.S. crude futures into negative territory for the first time in history, revealing that the demand for oil has decreased and that there is not even any room to store the extracted oil due to the COVID-19 outbreak. President Donald Trump says that despite the rumors that the fall in oil prices is short term, the Wall Street experts with whom he’s interviewed have stated that it will take time for the American economy to recover. Some well-known financial analysts are now widely predicting the COVID-19 recession will present the U.S. with its most outstanding economic adversity since the Great Depression of the 1930s.
International financial institutions based in New York have announced that many countries are facing multilayered crises involving health care, local economics, the fall in foreign demand and capital movements and the collapse of commodity prices, making it difficult to see ahead, as these various problems interact with each other. The World Trade Organization (WHO) has also announced that global trade volume is predicted to fall between 13% and 32% this year as a result of the economic effects of the pandemic.
Facing a $7.4 billion loss in revenue, New York City mayor Bill De Blasio is asking for federal assistance to meet the basic needs of New Yorkers, while detailing what he called necessary budget cuts. Senate majority leader Mitch McConnell said that he would certainly be in favor of allowing states to use the bankruptcy route. Can you imagine California or Texas filing a bankruptcy claim after the COVID-19 pandemic?
Stimulus package not enough
Although it has been only two weeks since the largest economic aid package in U.S. history began to be distributed to American families and small and large businesses alike, President Trump signed an additional $484 billion stimulus last Friday. As far as we can see, these additional economic packages will be continual as the Federal Reserve tries to support the market. Both packages include critical items, including billions of dollars in aid to the bankrupt health care system.
While the Fed is taking new steps to ease markets, it has also started to eliminate the bottlenecks in the global credit markets by lending money to the central banks of other countries in exchange for treasury bills.
The global effects of the coronavirus show that the world order will not be the same after the pandemic. As a result, the COVID-19 fallout has started to profoundly affect individuals, groups and countries.
I especially believe that the changed attitude of the United States toward China and its search for a new industrial trading partner can be an opportunity for Turkey. Following the phone call between President Erdoğan and Trump last week, the United States received medical aid from Turkey on Tuesday. This was an important Turkish magnanimity toward the U.S., providing 500,000 surgical masks, 4,000 hazmat suits, 2,000 liters of disinfectants,1,500 goggles, 400 N95 masks and 500 face shields.
From now on, the countries that engage with the correct information before adopting narrow policies, manage it transparently, work with the right partners and invest in their people will prevail.
*President of the Turkish Heritage Organization and a 2019 Ellis Island Medal of Honor recipient
