The global COVID-19 pandemic is now expected to take a far worse toll on foreign direct investments worldwide than feared just a few weeks ago, UN economists said on March 26.
A fresh report from the UN Conference on Trade, Investment and Development (UNCTAD) warned that the rapid spread of the coronavirus would cause a "dramatic drop" in global foreign direct investment, which is a measure of cross-border private sector investment.
The agency said it now believed that global FDI could be as much as 40 percent lower than its projections in January, when it had expected to see up to 5 percent growth this year and next.
That compares to a forecast it issued just two weeks ago, in which it said that FDI would be up to 15 percent lower than its January projections, in a worst-case scenario.
Efforts to halt the spread of the new coronavirus, which has killed nearly 22,000 people worldwide and infected more than 500,000, have wreaked havoc on international business and are rapidly pushing the world into a global recession.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
"Projections of the economic impact of COVID-19 are becoming more serious by the day," Thursday's report said.
It said "early expectations that the impact would be felt first and foremost through the ripple effects caused by production stoppages and supply chain disruptions in East Asia... and felt especially in economies that are closely integrated in global value chains are being overtaken by events."
"It is now evident that pandemic mitigation efforts and lockdowns around the world will have devastating effects on all economies, independent of their links to global supply networks," UNCTAD said.