Director-general of the World Trade Organisation Roberto Azevedo has made a statement on the world economy and how it may be impacted by the global pandemic of COVID-19 going forward.

Speaking from his own living room as he and other delegates resorted to working from home to halt the spread of the novel coronavirus, Mr Azevedo did not beat around the bush with his words, which were aimed at all nations.

Worse than 2008?

Indeed, he warned that the sharp decline in trade that has come as a result of factories and other workplaces being forced to cease operations could plunge the world into a financial crisis worse than the one seen in 2007-08.

"This pandemic will inevitably have an enormous impact on the global economy, on trade and consequently on jobs and people's wellbeing. Our economists are still crunching the numbers, but they foresee a very sharp decline in trade," the expert commented.

Mr Azevedo also said targeted fiscal policies such as those already being introduced across Europe will be necessary to support nations through the epidemic and keep global markets and economies ticking over.

According to a forecast made in early March by the Organisation for Economic Cooperation and Development, the global economy could have the potential to recover by 3.3 per cent by 2021 - but that relied upon the pandemic not getting worse in Asia, Europe and North America.

Counting the cost

Unfortunately, cases have continued to rise and a new United Nations Conference on Trade and Development report said last week that foreign direct investment flows are likely to drop by 30 to 40 per cent during 2020 and into next year, with untold consequences.

"Importantly, it will depend on the nature and scale of policy packages that most governments are now putting together to support their economies, which will determine the duration of the recession and the speed of the recovery," the document said.

Aside from the human tragedy of coronavirus, the UN believes it could also cost the economy as much as $1 trillion this year.

However, Mr Azevedo has urged countries across the world not to give up on their cross-border trade and investment flows, as keeping trade going will not only help to beat the pandemic directly, but also foster a stronger recovery from it afterwards.

"Trade allows for the efficient production and supply of basic goods and services, medical supplies and equipment, food and energy that we all need. Keeping trade open and investment flowing will be critical. International cooperation should never be an afterthought," he said.

Keeping borders open to goods

Oscar Guinea Iacopo Monterosa from the European Centre for International Political Economy agreed and said in an article for the organisation's blog that he believes governments should get rid of as many tariffs as they can on medical equipment to facilitate supplies.

"It will send a strong signal that governments consider foreign manufacturers an equal partner in their efforts to tackle this crisis," he explained.

Importantly, this is something some nations have already started doing, with the US even easing its trade war with China to ensure a seamless flow of medical equipment during the current crisis.

"Trade is not the problem but part of the solution," Mr Guinea Iacopo Monterosa concluded.

As to how long it might be before the world can start trading again in earnest to haul itself back off its knees, the UK has said this week that it may be six months before any sense of normalcy returns.

China's re-emergence and the global economy

However, many are looking unexpectedly to China for hope in these dark days, where the first green shoots of recovery are perhaps beginning to poke through the Asian nation's battered economy.

It implemented stringent measures to contain the virus and is reaping the rewards, with shops, restaurants and workplaces once again open for business and manufacturing picking up.

Even in Wuhan, where the novel strain of coronavirus eventually dubbed COVID-19 first emerged, the lockdown is expected to be lifted on April 8th 2020. China is planning to capitalise by ramping up production and calling for expansion in key sectors like 5G, artificial intelligence and high-speed rail abroad.

"China is addressing an issue every country and location in the world will eventually face: how to normalise and restore societal activities, while at the same time minimising disease-related dangers from the outbreak," epidemiologist Keiji Fukuda of the University of Hong Kong told Science Daily magazine.

Yet by picking themselves up, dusting themselves off and ploughing their efforts back into 'Made in China', the country is also likely to effectively demonstrate Mr Azevedo's assertion that trade will be the best way to recover from this virus, as well as to get through it while residents remain in lockdown.