PANDEMIC Pummeled Polish economy

With over 11 million residents, Wuhan, a metropolis in the central Chinese province of Hubei, which in turn has more than 60 million inhabitants, has involuntarily become famous. It was in that city, where at the turn of November and December 2019 an epidemic broke out. Local authorities ordered doctors and experts to keep silent. China has been building a centralized system of citizens’ control over the years. Unfortunately, viruses are not afraid of repression. They cannot be deceived by propaganda. They are not at all concerned with the decisions of a politburo. Authoritarian measures were not able to keep the epidemic within China. Even though the quarantine in Wuhan was introduced on January 24, large numbers of people had already gotten out of the city. The quarantine range expanded with each passing day – 56 million people were quarantined just after four days since its introduction. In Wuhan – a business and industry center developing faster than the rest of China – factories, universities were closed and trade ceased.

Because of the coronavirus, the world economy is in a state of suspension in the first half of 2020. Over a hundred thousand have died and millions have been infected globally. Hospitals are not able to keep up with patients. International and domestic flights have been grounded or restricted. Sales of goods and services have slumped. Factories all over the world have been temporarily shut down. Many firms risk bankruptcy if their supWith over 11 million residents, Wuhan, a metropolis in the central Chinese province of Hubei, which in turn has more than 60 million inhabitants, has involuntarily become famous. It was in that city, where at the turn of November and December 2019 an epidemic broke out. Local authorities ordered doctors and experts to keep silent. China has been building a centralized system of citizens’ control over the years. Unfortunately, viruses are not afraid of repression. They cannot be deceived by propaganda. They are not at all concerned with the decisions of a politburo. Authoritarian measures were not able to keep the epidemic within China. Even though the quarantine in Wuhan was introduced on January 24, large numbers of people had already gotten out of the city. The quarantine range expanded with each passing day – 56 million people were quarantined just after four days since its introduction. In Wuhan – a business and industry center developing faster than the rest of China – factories, universities were closed and trade ceased.

Because of the coronavirus, the world economy is in a state of suspension in the first half of 2020. Over a hundred thousand have died and millions have been infected globally. Hospitals are not able to keep up with patients. International and domestic flights have been grounded or restricted. Sales of goods and services have slumped. Factories all over the world have been temporarily shut down. Many firms risk bankruptcy if their supply chains aren’t reinstated soon. Countries and territories have closed land, air and sea borders. According to a report published at the beginning of March by economists from Allianz, a Munich-headquartered multinational financial services giant, and Euler Hermes, a Paris-based credit insurance behemoth, coronavirus is estimated to cost at least $320 billion of trade losses every quarter.

FROM PANDEMIC EPICENTER TO POLAND

Where did the novel coronavirus come from? It is widely thought to have originated from bats, transmitted from animals to humans. The prime suspect has been identified as the local seafood market in Wuhan. The trick is that there are no bats there. Another disproved theory assumes a “human error” in safety management in a germ research center.

The coronavirus has already reached all continents except Antarctica and is spreading exponentially. The US, Italy, Spain, France, the UK, Belgium, Iran, Germany, China and the Netherlands have been particularly affected. The coronavirus reached Poland as well toward the beginning of March. Initially, Warsaw was calming the moods for weeks, saying that Poland was ready to stem the spread. It turned out that it was only on paper. There were no prescribed procedures or guidelines for doctors, the hospitals were not provided with appropriate equipment to receive and treat the infected. There was even a shortage of face masks – all stocks had already been sold and there weren’t more of them, because they came from … China. The World Health Organization website states the situations when a mask should be used including while caring for a suspected patient or while coughing and sneezing. Most beds in hospitals for communicable diseases remained occupied – there was no room for patients. There were also no procedures that in a justified case allowed transporting a patient to a communicable diseases’ hospital. No one knew how to do it. This mayhem led to a spiral of panic. At the same time, people stormed pharmacies and stores – leaving behind tens of thousands of empty shelves. Stores lacked disinfectants, soap and toilet paper. There was a shortage of beans, rice, oats and pasta in supermarkets.

OECD assumes a decline in growth in the eurozone after the development of the coronavirus epidemic. Countries that locked themselves down are expected to be the most affected, with zero or even negative growth. But there is also a worse scenario, that the virus turns the global economy into a big bust. Stock exchanges around the world have been reacting negatively. The WIG20 index of the Warsaw Stock Exchange has gone down to levels not seen since 2009. Insurers do not know how to treat potential claims in the time of the epidemic. Companies and universities have ordered employees who have been aborad to self-isolate. The Polish economy lost an estimated PLN 79.3 billion due to restrictions on economic and social activity from March 16 to April 20, according to Poland-based trade bodies Federation of Polish Entrepreneurs (FPP) and Lewiatan Confederation.

POLAND LOCKED DOWN

Polish authorities in the first days of March adopted a bill on preventing and combating the disease. What followed disconnected Poland from the rest of the world. Within the country, only takeaways and food deliveries were allowed for restaurants, all events were canceled or postponed. Events across the whole world were also canceled or postponed, such as Champions League final scheduled for May 30 in Istanbul, Euro 2020 and the Olympic Games in Japan. In Poland, schools, kindergartens, as well as universities were closed until further notice. The Polish prime minister’s orders, issued orally, by phone or e-mail, were made binding on all entities – including private firms with immediate execution. The orders would need no justification enabling restrictions on movement and access to areas, and the prohibition of the organization of events, among others. It seemed that the coronavirus spread was a great excuse to limit civil liberties and introduce power without control. Shutting down a country also has a long-term impact. After some time, governments will see decreasing VAT inflow. There will be giant budget holes that somehow have to be filled.

The psychological effect associated with the epidemic will be of significant importance for the global economy. Worldwide economic growth could plummet and shrink by more than $3 trillion if the coronavirus becomes a global economic pandemic despite concerted efforts – up to March 26, commitments from governments and central banks were close to $7 trillion and rising, considering the US, Europe, India, China and Japan unleashed government spending and newly created money in a desperate attempt to keep the global economy from sinking into depression – according to an analysis by CNN Business. The question is how much we know and how much we do not know. How much knowledge is hidden from the citizens and the media? This is not an epidemic that will wipe out half the global population, just like the plague that took an estimated 75-200 million human lives in Eurasia in the mid-14th century, killing almost half of Europe’s population. The coronavirus resembles the seasonal flu but is far more dangerous with a significant number of fatalities, especially among older people. Even more dangerous, however, is the disinformation-induced panic that escalates the fear. We panic while dealing with a strong fear. By design, the more we know, the more afraid we are.