Impact of COVID-19 on World Political Economy

This report discusses the impact of COVID-19 on the world political economy, including resource distribution, globalization, de-globalization, change in economic policy, and socio-economic inequalities.

What impact has the pandemic
had on the world political
economy

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact has the pandemic had on the world political economy:...................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
COVID-19 pandemic had major impact over world economy, each nation have faced
critical situation managing their economy and trade relationship with other nation. Role of
political decision can be seen in which economic betterment is drive by government and its
decision, it is very clear that pandemic pressured government to take major decision brining
betterment in the economic outcome. Role of government strategic alliance can be seen, nations
with trade and political conflict faced critical situation during COVID-19 because there was no
aid available from these nations. This report will discuss what impact has the pandemic had on
the world political economy (Ciotti and et.al., 2020).
MAIN BODY
Impact has the pandemic had on the world political economy:
COVID-19 is one most common term in the world, this pandemic has impacted almost
every area including economy and political aspect, this global pandemic changed the world
forever and provided new concept of running economical and political system. COVID-19
pandemic impacted almost every nation which means there no possible solution for this
pandemic, nations have to bring major change in their political and economic system. There was
continuous development before COVID-19, economies were booming and reaching the required
goal, this pandemic pushed nation to bring change and improvement in the system. For example;
international trade was impacted, there was no supply of material to fulfil high demand, many
nations have brought changes in fiscal policy to over important area of the economy (Padhan and
Prabheesh, 2021).
World political and economic considerations likely affected with COVID-19 policy introduced
by every nation, China is one of those nations who appear as one of the largest global trader
dealing in production and manufacturing of material. Chinese politicians focus on carefully
listening on public health professionals, politician took decision shutdown national economy. In
response to US economic stability, China's economy was running at full operational phase
allowing them to restore their global footprint in supply chain. US politician aurged federal
government to bring major restriction on Chinese trade process, these politician think china did
major damage to federal economy.
It is very clear that global politics and economy work together to bring betterment in
society and nation, economic aspect may include key factors of economy including inflation rate,

stability, income and spending level and certain other area. Political decision play significant role
in bringing betterment to economic area, it completely depends on role of government to design
certain strategies accordingly. However, involvement of government over economic decision
allow nation to enjoy continuous growth and development. Even after global pandemic, many
nations is enjoying economic stability because they took those political decision which allowed
them to manage this pandemic. There are certain factors that denote impact on COVID-19 on
world political economy, these are:
Political factor: It is very clear that government play major role in bringing betterment to
the economy, political factor does matter when it comes to COVID-19 and its key measure. Due
to COVID-19, world political economy become unstable, competition between nation to nation
become critical. For example; in 1970-18 Japan was economic rival to US providing heavy
competition to US trade, economic stability and political security. Now china took over the title
to economic rival of US, this country have enjoyed sudden economic growth as politician took
decision to cut trade with US and other alliance. China's policy and resource distribution may
include balancing economic spending and capacity of people, distribution become challenging
when nation failed to take effective political decision, role of government can be seen in resource
distribution process in the nation. Resource distribution may include income distribution, but this
is not limited to wealth, nation deliver and distribute certain other type of resource including
energy resource. For example; Saudi Arabia is one of the best global distributor of hydrogen for
energy purposes, this nation has trade alliance with other nation allowing them to supply clean
energy source, due to COVID-19, global economy was impacted affecting supply and demand of
energy resource. However, Saudi Arabia made billions in profit during COVID-19 with the
supply of hydrogen and other clean energy resource, here strategic political played major role.
Economic factor: This is one of the most common but important term, this impact nation's
performance in global market, political decision of a country drive betterment to economy. For
example; US consider COVID-19 as 'China Virus' which impacted sentiment of Chinese
politician, these words of US president pushed China to take certain decision which impacted
political relationship between these two super power nation. Due to COVID-19, economy of
those countries was badly impacted but China was one of them who took certain effective
political decision to bring betterment to the economy. Even after tag of 'China Virus' China have
become initial place to cover up economy loss. Depending on type of political relationship,

nations try to connect with each other in terms of trade and other exchange between countries
(Madhok, 2021). Due to COVID-19, the process of globalization was impacted because of
complete ban on supply of material, workforce and money. This pandemic impact one of the
most important process of the nation, flow of financial and non financial products was impacted
due to sudden impact of COVID-19 over the nation. Political decision does matter when it comes
to globalization, government need to provide those policies which bring betterment even in
critical issue. During COVID-19, many nations have enjoyed globalization allowing them to
become stable in international market. For example; government of India took decision of
supplying anti material drug (Hydroxychloroquine) to maintain aid during COVID-19. This
helped India to continue globalization because with Hydroxychloroquine, India have supplied
certain other type of medicine and maintained their trade relationship with other nation.
De-globalization: De-globalization is process in which nation face decline in trade
relationship with other nation, this situation arrives due to unstable market condition and
development rate of nation. A poorer country will face de-globalization where other nation will
try to avoid performing any kind of trade with these nations. Due to COVID-19 impact, poorer
countries become poorer because trade relationship with other nation did not work in critical
situation. For example; Africa is one of those nations which was badly impacted by COVID-19,
this country was struggling with certain other factors. Sudden impact from COVID-19 impacted
their trade relationship with nearby countries keeping them all alone in critical situation, de-
globalization can be seen in the case of Africa where no natural resource was available to
continue trade with other nation (McNamara and Newman, 2020). The situation become critical
when there is no trade possible, nation have seek aid from strategic alliance, bringing changes in
economic and certain other area including trade did not work. De-globalization may push nation
to face extreme poverty. For example; Afghanistan is one of those nations who was facing issue
of internal conflict, due to COVID-19 impact, things went out of control and nation have to face
situation of emergency impacting their reputation and future of trade in international market.
Many poorer nations have faced de globalization due to sudden impact of COVID-19.
Social factor: Social factor simply means government took those decision which bring
betterment in public, here health measurement and restriction decision taken by nation to manage
COVID-19 cases in the country. For example; US faced the highest number of mortality rate in
the world, health policy of this nation was impacted due to COVID-19, comparing with Brazil's

health policy, this nation has high rate of fatalities. US political decision for COVID-19 was
powerful enough to impact important area of health measure. Government took decision like
Strict social distancing and PPE kit to stop the spread. Many nations brought major changes in
their economic policy including fiscal policy, employment policy, trade and free trade policy,
import/export policy and certain other type of policy which is connected with economy and
international political relationship. For example; Australia brought policy change and
modification in employment development process, the job mobility rate declined during
pandemic, government took decision to generate job in the nation by allowing international
brand to perform trade after situation gets stable. It was very important for a nation to bring
change in the economic policy to manage this pandemic, nations brought changes in fiscal and
trade policy allowing domestic and international brand to trade freely in the market place. Every
nation have brought policy modification during COVID-19 and after COVID-19, these nations
changed their policy structure according to the demand, when employment policy changed
during pandemic because nations want to generate job and employment opportunity in the
nation. After COVID-19, many nations offered easy trade policy to international brand, these
political decision were taken to bring betterment in the economy.
Technological factor: Technological factor was impacted after COVID-19, there was
advancement on both software and hardware which means nations with stable economy have
enjoyed growth. US and European countries have stable technology allowing nations to create
valuable global chain, the supply and demand chain of these nations was managed even in
critical situation of lock down. Global value chain was impacted due to pandemic, nations with
better trade relationship faced huge issue. It is very clear that political decision drive betterment
in the economy, COVID-19 pushed nations to change their trade policy, supply of material was
stopped which impacted industrial development. However, nations with own production unit
enjoyed stability, but nation who depend on global value chain faced huge issue. Supply of raw
material from critical nations like China was stopped impacting economic development of
alliance. Due to sudden stoppage at global supply chain, nations failed to deliver product, as a
result, there was intensive pressure on domestic supply chain impacting quality and quantity of
goods. The supply of material was badly impacted, nations depending on each other faced huge
issue because of supply chain challenges (Lipscy, 2020). For example; due to COVID-19, the
trade relationship of US and China become worst, China unable to supply their products across

the world because they have faced backlash in international market. Due to political decision, the
supply chain between these two nations was impacted and even affected other alliance.
Socio economic inequalities: This was one of the major challenge faced by almost every
nation, due to economic inequalities, many nations failed to manage trade relationship with each
other. Political conflict can be seen between nations impacting health measure and economic
sustainability. Socio economic inequalities impact relationship of two nations, due to political
agenda, many nations face critical issue because lack of supply and aid. For example; after
Brexit, both United Kingdom and European Union faced trade restriction and proper aid during
pandemic, due to political conflict and government involvement, both nations have to face
existing tension. COVID occurred just after Brexit which means both nations were not ready to
bring stability in the economic (Garnaut, 2021). Apart from this, United stated and China also
face political conflict and social economic inequalities, these nations try to avoid any kind of
trade with each other, these nations faced tension when COVID-19 impacted international trade
process and regional markets. Conflict between two nations does impact their economies, due to
socio-economic inequalities, many nations have face backlash in international market. Poorer
countries faced trade barrier during COVID-19 which impacted nations stability and image in
global economy. During COVID-19, even cultural difference were faced by many nations
impacting their economic stability.
CONCLUSION
This report has discussed pandemic and its impact over world political economy, this is
one of the major topic focusing on political involvement in betterment of economic sector,
government and its decision does matter when it comes to economic representation in
international market. Later this report has discussed key area and factors which provide clear
understanding of COVID-19 impact including resource distribution where nation faced issue of
distributing resource across the nation and impact on global value chain impacting supply chain
management of the nation, this may include role of government policy and decision. Later this
report has discussed certain other area including globalization and de-globalization in which
COVID-19 has impacted trade relationship of two nations and impacted their strategic alliance.
At last, this report has discussed certain other area including change in economic policy and
socio-economic inequalities which impact nations growth during COVID-19 pandemic.

REFERENCES
Books and journals
Ciotti and et.al., 2020. The COVID-19 pandemic. Critical reviews in clinical laboratory
sciences, 57(6), pp.365-388.
Padhan, R. and Prabheesh, K.P., 2021. The economics of COVID-19 pandemic: A
survey. Economic analysis and policy, 70, pp.220-237.
Boettke, P. and Powell, B., 2021. The political economy of the COVID‐19 pandemic. Southern
Economic Journal, 87(4), pp.1090-1106.
Lipscy, P.Y., 2020. COVID-19 and the Politics of Crisis. International Organization, 74(S1),
pp.E98-E127.
Madhok, A. (2021) ‘Globalization, de-globalization, and re-globalization: Some historical
context and the impact of the COVID pandemic’, BRQ Business Research Quarterly,
24(3), pp. 199–203. Available at: https://doi.org/10.1177/23409444211008904.
McNamara, K.R. and Newman, A.L. (2020) ‘The big reveal: COVID-19 and globalization’s
great transformations’, International Organization, 74(S1), pp. E59–E77. Available at:
https://doi.org/10.1017/S0020818320000387.
The Pandemic Isn’t a Black Swan but a Portent of a More Fragile Global System | The New
Yorker (no date). Available at: https://www.newyorker.com/news/daily-comment/the-
pandemic-isnt-a-black-swan-but-a-portent-of-a-more-fragile-global-system.
Garnaut, R. (2021) The reset to lift us out of the COVID recession has to be bold: Returning to
where we were is nowhere near good enough. The Conversation. Available at:
https://theconversation.com/the-reset-to-lift-us-out-of-the-covid-recession-has-to-be-
bold-returning-to-where-we-were-is-nowhere-near-good-enough-155565.
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