International

CORONA VIRUS CAN CREATE EMPLOYMENT IN INDIA : FOX PETROLEUM CMD AJAY KUMAR

March 05, 2020 10:09 PM

 

By Dr . Manju Dagar

The new manmade disaster is the talk of town now, yes, I am talking about Covid-19 CORONA Virus, and the speed at which this virus is spreading in the world, had not been seen during the crisis of Ebola or Zika virus. It has started showing footprints in India and rapidly spreading in Asia. Death toll rising everyday due to Corona Virus across the Globe, starting first death from China. Due to rapid increase in the number of Corona Virus Patients, Indian Government issues a stunning warning by putting all airports including sea port on check with physical checking and also using thermal scanner on arrival. The medical warning has been issued by almost all Counties hitting the regular flow of Business. Hence, COVID 19 Corona virus, successful is making heavy impact on economy to host country, spreading all bull market to ‘RED’. 

Ajay Kumar chairman of Fox Petroleum Group of Companies . His main business region is in Gulf Countries but apart from this, Fox Petroleum already spread its wings worldwide more then 15 countries . So he is the right man to ask economic impact worldwide, He speaks to Our international journalist Dr . Manju Dagar. He has described how Corona COVID 19 Virus May Impact the global economy . 

?What is the geopolitical Impact of Covid-19 CORONA Virus to the world Business inc? What Coronavirus Could connote for the Global Economy?

Dr. Ajay : As such not so high fear in Business Inc amid that almost all Government is taking care of it, but internally there is fear of long term disruption of supply chain management may lead to serious recession. This will impact hard. This is the fear, as World Economy is interdependence to each others economy, due to globalization. Just one hit in China, means hit on 28 Countries in the same night. 

Death toll rising everyday due to Corona Virus across the Globe, starting first death from China. Due to rapid increase in the number of Corona Virus Patients, Indian Government issues a stunning warning by putting all airports including sea port on check with physical checking and also using thermal scanner on arrival. The medical warning has been issued by almost all Counties hitting the regular flow of Business. Hence, COVID 19 Corona virus, successful is making heavy impact on economy to host country, spreading all bull market to ‘RED’. 

 As I got sense from business leaders, they are asking whether the market drawdown truly signals a recession, and the fear is how bad a Covid-19 recession would be, what the circumstances are for growth and recovery, and whether there will be any lasting structural impact from the unfolding crisis. For them, I have a silent answer, already a Trillion dollar business is hit. It’s going to be worst, if it gets longer duration, there is an odd suspense of Countries may see recession, but mostly those are highly dependence on Chinese Market. 

?Dr. Kumar As you have used the word “Recession”? What Would a Covid-19- stimulated Recession Look Like? Is it going to hit China or the world market? 

Dr. Ajay Kumar : “Recession” is flaming world for market. Though market sentiment can be misleading, recessionary risk is real. The vulnerability is countries are now less able to absorb shocks due already slow down in the Global Economy. In fact, an exogenous shock hitting the U.S. economy at a time of vulnerability has been the most believable recessionary scenario for some time. Before the shock let me tell you categories of recession. Recessions typically fall into one of three categories; they can be understood by the following examples: 

Factual Recession. Naturally, this is a CapEx boom cycle that turns to bust and derails the expansion means it hits capital market. But severe exogenous demand and supply shocks — such as wars, disasters, or other disruptions — can also push the real economy into a contraction, and yes it is natural disaster and that to man made, and my source or information said even US needs minimum one year to make medicine for this flaming virus problem. It’s here that Covid-19 has the greatest chance to infect its host. The world will see recession for sure. And India is already going under distress. May Impact Indian economy hitting investments as well as manufacturing sector. Further hitting to Capital market, which is not a good sign for India. 

Other two kinds of recession will not be major cause to worry. Like – Strategy Recession or recession caused by wrong policy, and Economic Emergency Recession. Economic Recession differences tend to build up slowly and over long periods of time, before rapidly unwinding, disrupting financial intermediation and then the real economy. This recession depends on long term slow down. But the factors limit the systemic risk of a potential shakeout in credit, though this risk can’t be dismissed entirely. It’s difficult to see Covid-19 contributing to financial imbalances, but stress could arise from cash flow strains, particular in small and medium enterprises (SMEs). This is going globally, but happy to inform you, can be corrected very fastly with Global interference. 

?Dr. Now, you named India, my question is how badly, India is going to be impacted? Is the economic trouble serious? 

Chairman Fox Petroleum Ajay said : Indian economy is very fat, and realistic. Hence, it can overcome realistic situations too, but in case of CORONA it is more rumor centric less realistic and very less dependence on host County China. Rather it is an opportunity for Indian Market to take away business shares of China, if it as shows goes for longer period.

To understand this, we need to examine the transmission mechanism through which the health crisis infects the economy. If the taxonomy of recessions tells us where the virus likely attacks the economy, transmission channels tell us how the virus takes control of its host county i.e. China This is important since it implies different impacts and remedies. There are three plausible transmission channels to economy: 

Direct hit to Indian wealth market confidence (wealth effect): shocks to the real economy is via financial markets (and more broadly financial conditions) — they become part of the problem. But Indian wealth market is not so high, as real estate sector is now no where, due to Government has bad eye on that sector, so it is not going to hit in that zone. Not going to Impact on India. 

Direct hit to Indian consumer confidence: While Indian financial market performance and Indian consumer confidence correlate strongly, long-run data also shows that consumer confidence can drop even when markets are up. Covid-19 appears to be a potentially strong direct hit on confidence, keeping consumers at home, sleepy of flexible spending, and perhaps pessimistic about the longer term. This is a hit, and will hit Indian sentiments, not good for Government of India. 

Supply-side shock to Indian market: The above two channels are demand shocks and Indian can absorb, but there is additional transmission risk via supply disruption which Indian may not be able to sustain for long run. It will target manufacturing sector of India, which is already down. As the virus hit, Host county shuts down production and disables critical components of supply chains, gaps turn into problems, production could halt, lead to #unemployment and layoffs could occur, which major concern for Government of India and Prime Minister Modi, and healthy for opposition. There will be huge variability across economies and industries, but taking the Indian economy as an example, we think it would take quite a lengthened crisis for this to feed through in a significant way. Relative to the demand impact, we see this as secondary.

?Dr. Ajay it means – it is going to give setback to job holders? I mean – it will increase more further the unemployment in India? 

Dr. Ajay reply with smile, Not true. You can make this an opportunity. It will halt job crisis, if Government sees it as opportunity. I my view, it may halt the problem of unemployment blame on this Modi Government. 

?How, please suggest –How Corona Virus can create employment in India? 

Dr . Ajay some up his interview with my last question and said see Recessions are predominantly cyclical, not structural, events. And yet the boundary can be blurred. He smiled and said according to me what is good for China may be Good for America, but what is Bad for china is always an opportunity to Prime Minister Modi. It depends on how he takes it. For me, If given an opportunity, it will take 13 days to Counter the Unemployment Problem once for all. It may seems to you a “joke” but Yes ! I can do it. Thank You.

I convey my thankyou to Fox Petroleum chairman Dr . Ajay Kumar who share his valuable time with us on this very important global phenomena. If our govt . want to get benefit from this , they can generate new jobs for our people . I must say our govt. need to see this global phenomena with different vision . 

Rizwan ji can you high light n bold that portion which is I sent with bold . And also is it possible any last question regarding job creats wala come up with his last photo .(Dr . Manju Dagar is a senior International Journalist)

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