After predicting the corona virus epidemic that swept the world, the digital currencies will come to life and new business areas will be created. Levent Sümer spoke about how the country’s economies will be affected after the virus.
Sumer said, ‘Nothing will be the same as before after corona virus. Perhaps this transformation will be the beginning of a new era in the world. Those who can get through this year will only be able to recover in a 1-2 year period. The big plazas will leave their places to virtual offices based on sharing. While all these processes will destroy some existing business areas, they will create new business areas.’
Pointing out that corona virus epidemic countries are caught off guard, Sümer said, “In fact, the debt spiral, which continued to increase in the world after the 2008 financial crisis and reached 278 trillion dollars (3 times the world economic size), signaled that there would be a major break in the financial system of the world. The IMF announced that on January 9, 2020, the world entered a recession not more than 2.5 months after revising its global economic growth expectation upwards from 2.9 percent to 3.3 percent. ‘
Sümer continued: «Nobody could predict that this pandemic, which started in China, would spread to the world so fast, despite the debt burden in the world, the increasing gap in income distribution and the lessons that should be taken from past crises.» Perhaps it was not in anyone’s mind that the financial breakdown likely to result in debt-based growth would begin with a virus reaching all over the world. The initial reactions, especially in the USA and the UK, were always very soft with the prediction that this virus would have a flu-like effect, and there was no preliminary preparation in terms of either social implications or economic effects. However, after China, this pandemic, which has hit Iran, Italy, Spain and France and the USA and has threatened our country with the rapid increase in recent years, caused a serious contraction in the world economies. Much worse for the EU and the USA. In terms of the sectors affected by the stock market, we see that the energy sector lost 48 percent, the aviation sector 44 percent, the insurance industry 33 percent, the automotive industry 32 percent, and the luxury consumer services 28 percent, according to McKinsey’s report.”
Predicting that those who can get through this year can only recover in a 1-2 year period, It should be said that the decrease in energy prices will not be able to recover with the reduction of supply because there will be a decrease in energy demand due to the slowing production in countries’ shrinking economies. On the other hand, the banning of food or even drug exports has already been on the agenda of some countries. Russia, Kazakhstan, Armenia, Belarus and Kyrgyzstan decided not to export food until the end of June. We can expect serious problems in the ongoing process in consumer and commercial loans, and it is highly probable that many companies will apply to either re-financing or additional loans by falling into default due to the shrinking household income. The automotive industry in the world will be seriously damaged, especially due to the supply chain dependent on China. Similarly, similar problems await the textile industry. It is possible to expect serious bankruptcies in the transportation and tourism sectors. The supply chain is broken in the world at the moment, logistics and international transportation have entered a very difficult period. It is possible to say that we have entered a misty period when unemployment rates will increase rapidly, the burdens of banks will increase, social concerns will grow and governments will have serious difficulties.
Stating that all countries will be affected by the economic crisis caused by the corona virus, Sümer said:
‘The world is connected with the advancement of technology. However, the basic needs of people in such crisis environments are; to maintain their health and to provide food needs. Countries that are self-sufficient in agriculture and animal husbandry, have advanced technology, established health systems, can apply social state understanding and have reserves that they can use in such crisis situations (such as the Norwegian Wealth Fund) are more fortunate than other countries. From this perspective, the USA, whose health system is constantly discussed, has to grow more than 6-7 percent every year in order to maintain and develop the welfare level of its population, China, the UK, which is in search of Brexit, Russia and the Gulf countries whose economy is dependent on oil and natural gas prices. , tourism revenue in the first row located in Spain, Italy, France, Turkey and Greece will be among the countries most affected. In fact, this will lead the European Union to question the unity in itself, as Italy does not receive the expected benefits. ‘
Regarding the policies that countries should follow, Professor Dr. Levent Sümer, ‘The process of finding vaccines, being produced and reaching to the masses, increasing the spread and decreasing the uncertainty of the general table by testing more people in a shorter time. After this process, the determination of the damage and the steps to be taken become clearer. However, at this stage, countries should take steps to keep their citizens both physically and moral and financially viable. In other words, the process should be carried out human-oriented. In order for the unemployment not to increase and production to continue, an internal consumption-oriented policy may be adopted in the products that are the primary need in the first place. In the medium and long term, the permanent solution is for both states and companies and individuals to abandon excessive borrowing, to observe the production-consumption balance, to value the sharing economy, to develop a sense of empathy, to bridge the gap between countries, societies and individuals’ distribution of income, not just as a social movement. it will also be possible by adopting it as a business and life culture and moving from consumer society to productive society.
Sümer pointed out that all these processes will create new business areas while destroying some existing business areas, ‘We have met with concepts such as online meetings, trainings, more shopping with contactless cards, managing the business from home, or our acquaintances took it a few steps ahead. Technology is actually the key to this transformation. In the near future, globalization will be reversed at least for a long time, while digital transformation will take place more quickly. Digital currencies, financial technologies, and many end-of-tech concepts will take up even more space in our lives. Capitalism began to be questioned, but its collapse is not so easy. In fact, if the effect of the virus disappears in the short term, our hope is that there will be no change in the current order, and it will cause even greater crises in the future.
Employees who used to spend the entire week in the office and perhaps an inefficient part of this period will move to a more productive work from distance. Large plazas will perhaps leave their places to virtual offices based on sharing, social distance perceptions will be reflected in the architecture and size of the houses where they will buy, holiday concepts, cleaning concepts, shopping cultures, online shopping will also increase seriously, it will be seen that defense industry is not only producing military weapons and against biological warfare medical devices will need to be further developed. «While all these processes are destroying some existing business areas, they will create new business areas. In summary, nothing after the coronavirus will be the same, perhaps this transformation will be the beginning of a new era in the world?» He predicted.