IS SRI LANKA READY FOR COVID-19 EFFECT?

This analysis focuses not on the COVID 19, but on its effect, the author wishes to address a significant thinking gap that is emerging whilst policymakers locally and globally are battling the virus and its immediate aftereffects. COVID19 will eventually peak at a certain point and the virus will recede yet the enormous disruption it has caused at a mega-scale will not.

- Dr. Harinda Vidanage

Thus, the world is heading to a point of a total reset, what will be the shape of world trade, finances, geopolitics has become a major concern among strategic thinkers. This article explores these concerns and solutions briefly while focusing on challenges and opportunities that rise for a small power such as Sri Lanka.

COVID-19 EFFECT

First and foremost, from an economic perspective, the world has hit a tipping point, as we have entered a new condition that is named as the pandemic economy. In this situation the relationship between supply and demand, the fundamental pillars of the modern economic system is in a crisis. Irrespective of people’s capability or desire to spend consumers cannot do so, sellers despite their best efforts are finding it even hard to sell, thus creating a fundamental disjuncture in the economy.

In a pandemic economy, regardless of their desire to spend, consumers are unable to do so, because they have been urged or ordered to stay home. Despite their willingness to sell, stores cannot reach their customers, and many are cut off from their suppliers. Thus, the global economic circuit has become short-circuited and to make things worse, measures such as social distancing and quarantine are creating havoc among economic systems and markets reliant on connectivity, interaction, and networks.