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February 2, 2021
The Impact of the Coronavirus Pandemic on the RA Economy and Recommendations to the Government

Center for Political and Economic

Strategic Studies (CSF ANP WG1)

For at least the last thirty years, the main trend in international relations has been the gradual decline of the role of nation-states in the global world order. International organizations, large transnational corporations, and the charities established by the richest people in the world, sometimes had a much greater impact than individual states. The economic cooperation had led to the free movement of goods and services, which became the basis of modern economic life. It seemed that nothing could stop the process of globalization, which was accelerated even more by the unprecedented development of information technology. There have been many publications in various international think tanks about the inevitable further reduction of the role of nation-states, and the possibility of their elimination in the long run.

The new coronavirus pandemic that began in China in December 2019 at first did not seem to pose a threat to the triumph of globalization. By the end of January 2020, the only concern of the world economy was to find new sources of production instead of closed factories in China. Some economists believed that this situation could accelerate the process of gradual reduction of China’s “world factory” function. It seemed that with the gradual cost increase of labor force in China, this process, conditioned by the US-China trade war, and from the beginning of 2020 also by the outbreak of the coronavirus, could seriously damage the Chinese economy, but it was not able to disrupt the triumph of globalization.

However, in the last ten months, almost the unbelievable happened in the world. In order to prevent the further spread of the pandemic, a number of countries not only closed their borders, but also in fact shut down their economic activities for a long time, making an exception only for the enterprises that provide for the livelihood of the people. The significant restriction on the free movement of goods and services, which plays the role of blood vessels for the world economy, is a serious blow to globalization, and at the same time a sign of “economic nationalism”.

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