The Corona virus has made in four months what it last 30 years and two recessions (1997,2008) to build up as a global framework for trade, investment,production, supply chain, and jobs mobility. Besides,quite extraordinary is the fact that nobody expected the new rules of global links interaction to be written with the global economy in a sudden stop situation. Rather the issue was for how long the global economy GDP would be able to sustain the stress of the two largest world economies reviewing the trade,investment and production links, as well as the spillover effects in the others developed and under developed economies.-
The current situation has changed all the parameters to design economy policy other than the conventional approach to deal with usual crisis. However, this one it is not an usual crisis.It will take some time before the fundamentals are back again on track to speed up a fast recovery.
"Fast recovery" meaning to get back everything the way it was before March 1st 2020 .Instead it may turn out to be a step by step recovery based upon some guidelines to follow for firms, domestic economies and governments ,for the sake of public health requirements .In other words there is no choice and so the recovery will probably has a priority setting framework . How come?.
a.- Firms top priorities begin with its employees and their health, then its consumers target, next its suppliers and finally the communnity.None of this steps will show results quickly. Besides the way firms solve eacch one of this relationships, it will influence its long term pattern among key economic stakeholders. A Fundamental questions will arise. Will firms hire again their former labor force? what about technological solutions aimed to replace and relocated jobs?.What will be the situation of supply chain settings?.What about consumers and its net incomes disposal for spending?. Not to mention the financial situation of firms after months with no regular cash flow. Some firms will make it while others will not.
b.- Domestic economy will become more relevant. Its top priority will be to recover employment level supporting labor intensive firms.This means to support domestic production, with global trade links on hold while the new sanitary conditions are set in place post corona virus.It means the global pandemic is over.-
c.- Governments will also need to set priorities. Domestic jobs will be on top of the list after assuring the necessary sanitary condcitons in every public place possible . Thus fiscal policy will be an active support for infrastructure, and public investment,and labor intensive technologies(services) , very well complemented with monetary policies in charge of keeping the stability on the financial system and the payments chain.-
The international trade as a driver of global growth will probably be replace at leasts in the short run by domestic production, and proteccionism to make sure domestic production increases solve the unemployment quickly.
Thus where do all of these variables leads to?.It will take some time before the globalization will be back again the way it was known. Maybe that globalization will stay in history books. Whether it is so, the post globalization will require new rules.
Morepver, it could arise new dimensions of globalism such as glocalization which will become more relevant as cities,local economies and firms with good prospect for business expansion will need new opportunities to recover faster after the corona virus shock is over leading to higher demands for decentralization to explore on its own different chances of doing business abroad.-
