Spotlight: Econ Op-eds in Summary (Week ended 05th February'20)
1. Asia will have to brace for a tough year ahead
By: Dinesh Weerakkody
· The recent viral outbreak from China is bound to have global consequences, with the Asia Pacific region expected to be impacted heavily. China’s significant influence in retail trade, manufacturing, tourism and investment flows in the Asia-Pacific has increased the region’s vulnerability. Proactive measures the Chinese government implements could help to contain the outbreak.
· Today, the rise of emerging markets, the impact of technology and other trends have changed the business world. The biggest challenge for businesses now is how disruptive such trends will be for organisations and how they must change their model to deliver unique customer experiences where users have grown to expect the best.
· Thus, understanding the disruption and reinventing oneself is an absolute necessity. The speed of change caused by these crises is faster than what it was five years ago. While crisis isn’t a new concept, today it has become more significant and frequent, causing massive disruptions to the traditional economy and companies.
2. Coronomics – Plan your eggs and the basket!
By: Prof. Ajith de Alwis
· Despite the ability of the novel coronavirus to have significant impacts on the world economy, the impact of such pandemics on human lives has been contained due to technological advancements. Therefore, the direct impact might end up being limited.
· As China is deeply integrated with global supply chains, the Chinese economy will recover quickly once the situation has normalised. However, the lockdown on the region at the epicentre of the pandemic, which contributes 4.5% to China’s economy, will likely mean that other economies dependent on China are left worse off.
· This suggests that distributed production sources are better than a single source enjoying benefits of scale, since the ripple effects of a crisis will be severe and far reaching. Therefore, looking at integrating within such sources and expanding them will be helpful for countries.
(Compiled by: Chayu Damsinghe, Asel Hettiarachchi & Eshan de Mel)