Influence of the Pandemic on the Socio-economic Situation in the

World

Razet Sayd-Emievna Yushaeva

, Madina Huseynovna Vakhabova

and Dzhamilya Saidulayevna Saralinova

Chechen State Pedagogical University, Grozny, Russia

Kadyrov Chechen State University, Grozny, Russia

Keywords: Pandemic, COVID 19, Coronavirus, Financial Times Stock Exchange Index, Post-pandemic Economy,

Business Digitalization.

Abstract: The article examines the state of the modern post-pandemic economy. The consequences of the COVID-19

pandemic and its impact on the socio-economic situation in the world are described. It was revealed that the

distinguishing feature of the COVID-19 pandemic from other pandemics in history is that its consequence

will be the modernization of the economy and taxation. Also, a distinctive feature is the acceleration of the

process of digitalization of the economy. A number of consequences of the pandemic in the global economy

are presented, as well as data on damages in various sectors of the economy. The analysis of the scientific

discussion of the authors, who directed all their research to the study of the consequences of the pandemic

and the formation of the post-pandemic economy as a driver of the modern economic crisis. Revealed the

need to develop effective measures of post form state policy to restore the domestic economy and improve

the level and quality of life of people.

1 INTRODUCTION

Currently, the problem facing all countries of the

world, COVID-19, is considered an unpredictable

threat. But let's think, is it really so? Over the past

decades, people have experienced many different

types of epidemics, and the current one is no

exception. Today, the pandemic poses a threat not

only to the health of the country's citizens, but also to

its economic environment (Vakhabova and

Saralinova, 2020).

The COVID-19 pandemic has accelerated the

technological order and marked the beginning of a

new economic cycle. All this means future

transformation in the global socio-economic space.

The pandemic has far-reaching consequences,

because it has caused severe damage not only to the

health of a huge number of people, but also to the

socio-economic sphere. Although the pandemic

began in China, it quickly expanded globally in terms

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of open borders and free movement (Andronova et

al., 2020.). The media have given a definition of the

impact and consequences of coronavirus infection -

"coronavirus crisis".

Nevertheless, pandemics have been characteristic

of the entire history of mankind, and the peculiarities

of COVID 19 are that the consequence of the so-

called "coronacrisis", like the previous deadly

infections, will be the modernization of the economy

and taxation (Pogorletsky, 2020). Due to the

pandemic, incomes of the population have decreased,

and some citizens have completely lost their jobs.

This negatively affected the retail, aviation and

restaurant business. The pandemic has had this

impact on the service sector in most countries,

including Russia and the United States. Without

exaggeration, the current situation in the world

community is still threatened by the new COVID-19

virus, and the unpredictable financial and economic

crisis has alarmed all countries and caused many

322

Yushaeva, R., Vakhabova, M. and Saralinova, D.

Inﬂuence of the Pandemic on the Socio-economic Situation in the World.

DOI: 10.5220/0011120000003439

In Proceedings of the 2nd International Scientiﬁc and Practical Conference "COVID-19: Implementation of the Sustainable Development Goals" (RTCOV 2021), pages 322-326

ISBN: 978-989-758-617-0

social problems (Saidov and Nazar, 2021). The

tourism industry has entered a crisis due to the Global

Coronavirus Panic, the duration and extent of which

is still unknown (Yushaeva, Edilkhanova, Saralinova,

2020). In conditions of uncertainty about the further

development of the tourism industry in world

practice, it is difficult to determine the vector of its

development (Oshkordina and Chikurova, 2020).

International trade, small and medium-sized

enterprises have faced a number of difficulties after

the closure of borders, the collapse of global supply

chains of goods, an increase in the percentage of

unemployed, as well as inefficient use of human

resources (Gributskaya, 2020).

In the first stage of its emergence, the pandemic

had a local impact on Chinese exchanges, where

trading volumes began to decline from 01.21.

According to the analysis over the past year, there

was a decrease in the level of GDP by 4-7% in most

countries. The announcement of the pandemic has

accelerated the process of the global economic crisis,

which has affected the value of shares and assets of

many companies.

Here are some of the consequences of the

pandemic in the global economy:

1. Decrease in forecast indicators - a decrease in

forecasts of world banks and financial organizations

regarding the growth of the world economy.

2. Decrease in production assets - production

activity has declined at a record, for example, in

China, this figure was 40.3. It had the same impact on

Vietnam, Singapore and South Korea. It is worth

noting that scores less than 50 indicate a reduction.

3. A shrinking service sector - a decline in

household incomes and an active rise in

unemployment had a negative impact on retail trade,

aviation and the restaurant business.

4. Decrease in the cost of oil - the demand for oil

and oil products decreased, which, as a result, led to

a decrease in prices for it. It should be noted that the

decline in oil prices began even before the pandemic,

but under its influence the indicators became

negative.

5. Decline in prices in the stock market - problems

in the stock market appeared against the background

of investors' fears related to the pandemic, as a result

of which there was a sharp decline in the prices of

shares of large companies. The influence on the stock

market is expressed in 3 main directions: decrease in

business activity; decreased activity in the local

market; stress in financial markets.

6. Decrease in bond yields - for example, in

America, bond yields fell less than 1% in 7 days and

amounted to 0.3% on 10-year securities.

7. Reduction of world tourism - about 10% of the

working-age population is involved in the field of

recreation and tourism, and it is this sector that has

suffered the greatest losses in connection with the

development of the COVID-19 coronavirus

pandemic. A significant decrease was observed

against the backdrop of transport restrictions and

travel cancellations. Also, there were cancellations of

all types of public events, business conferences. As a

result, service consumers were withdrawing

reservations from hotels and all types of tickets. At

this level, not only travel companies were affected,

but also transport companies.

According to experts' forecasts, the global

economy is expected to decline by $ 5 trillion in the

coming years. Analysts agree that the recession will

happen rather quickly, but it will take a long time to

recover.

In modern conditions, the national economy is

undergoing a shock transformation of all socio-

economic processes caused by the coronavirus

pandemic. She made it clear that changes are taking

place at all levels of social development, both

nationally and globally. The pandemic has led the

world community to the need to format the methods

and principles of socio-economic policy at the long-

term level. After all, no one can say for sure when the

pandemic will end and all spheres of society will

return to their previous mode of operation

(Manyakhina, 2021).

2 METHODS

In carrying out this study, we used systemic,

institutional and functional approaches, statistical and

econometric methods for analyzing economic

information. Methods of comparison, summary and

grouping and analysis of information were used. In

the course of the study, the works of Semenkov V.E.,

Chernoivanova A.S. were analyzed. "Ideological

reflections in Russia in the context of the coronavirus

infection pandemic"; Asalieva A.M., Stepanova

A.A., Oborina M.S., Gordeeva E.V. "Anti-crisis

measures to support the Russian economy in a

pandemic: compromises between government and

business"; Balashova N.A. Experience in applying

the principles of unconditional basic income before

and during the COVID-19 pandemic. The

information base for the study was also used

information posted on the official websites of the UN

and Rosstat.

A significant number of foreign publications are

mainly devoted to the impact of COVID-19 on the

Inﬂuence of the Pandemic on the Socio-economic Situation in the World

323

socio-economic development of national economies,

which are divided into a number of groups:

1. Risks and uncertainty in the economy,

negatively affecting the adoption of effective

decisions;

2. Prompt response of the authorities and effective

mechanisms to support business and the population;

3. Analysis of the state of labor markets and the

prospects for remote management in various sectors

of the economy.

3 RESULTS AND DISCUSSION.

The massive spread of the Covid-19 coronavirus

infection in the world has become a challenge for the

authorities, measures to counter the disease have

created serious problems for business (Dakaev and

Yushaeva, 2020). All modern research, both domestic

and foreign, is aimed at studying the consequences of

a pandemic and the emergence of a post-pandemic

economy as a driver of the modern economic crisis as

a new great depression.

Russian practice already has problems of ensuring

economic security in the context of a long-term viral

pandemic. State policy is aimed at minimizing the

negative consequences of the pandemic, its impact on

the digitalization process.

It should be noted that in the course of the “self-

isolation” of the economy, a wide range of non-

market processes emerged, which had a negative

impact on the rates of economic development of the

regions. In the context of the “second wave” and the

projected duration of the pandemic, there is a need for

methodological substantiation of the transformation

of institutions of socio-economic policy, which

requires both scientific and practical justification to

identify the vector of the correct development of the

economy and regions, and the state, and on the world

stage.

The modern stage of scientific and technological

progress is characterized by the emergence of

completely new areas and technologies that are

developing so rapidly that they set the success of the

state as a whole. At the present stage of technology

development, e-commerce, unmanned vehicles, big

data technologies are the realities of our time.

The main positions that give us an understanding

of some kind of vulnerability during a pandemic and

post-pandemic period:

1. The accelerated development of digital

processes and the potential for online work in a

certain range of areas have shown the unpreparedness

of others, for example, the sphere of consumer

services, transport, leisure and tourism, for this kind

of transformation;

2. The increase in unemployment in a number of

familiar areas of activity and the formation of new

online professions have led to a resonance in the labor

market;

3. Global unemployment and insolvency of the

population have led to a narrowing of the small

business segment in a number of areas that are not

vital.

These and other factors have led to the need for

enhanced government regulation, control and support

for socio-economic responses. However, there are a

number of problems for regulation at this level.

The research problem is due to the

underdevelopment of the process of functioning of

small business and entrepreneurship in the context of

the digitalization of the economy, the lack of a unified

regulatory and legal framework, the lack of a unified

platform for the functioning of small businesses in the

regions and in the country as a whole (Vakhabova,

and Yushaeva, 2019).

In the process of globalization, a characteristic

feature is the formation of value chains, which is

primarily associated with the deepening of the

international division of labor and the development of

trade and economic relations. There are a number of

conditions necessary for the sustainable functioning

and inclusive economic development of value chains:

1. Accelerating trade and investment reforms and

improving interconnection between states;

2. Conducting an open and predictable economic

policy;

3. Strengthening social protection and

environmental protection, guaranteeing the sharing

and conservation of benefits.

The challenge of the century for the economy is

the coronavirus pandemic, which affects value chains

along three main channels:

1. The pandemic has a huge impact on transport

systems, and in some cases completely overlaps the

logistics of supplies. A large number of multinational

companies have moved parts of their production

processes to different industry locations in order to

maximize profits.

2. The pandemic affects production processes in a

negative way due to the closure of jobs and the

transition to a remote service system.

3. The pandemic has severely affected demand. It

is worth noting that in January and February 2020,

when only China was the epicenter, this point was not

so clear. However, the growth of the pandemic in the

world played a large and not positive role, the number

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of orders decreased, there was a temporary

cancellation or refusal on an ongoing basis.

The epidemiological situation in the world has

transformed the work of value chains in three main

directions: globalization, migration and localization.

Experts note that in the post-pandemic period,

automation and digitalization will become vectors of

restoration of global value chains for the following

reasons:

1. Digital technologies have played a large role in

the global fight against COVID-19. During this

period, a large number of new types of services

appeared, existing ones disappeared, there was a

partial transformation of the service sector: remote

tracking, robotic cleaning in hospitals, the sphere of

all kinds of deliveries, the active development of e-

commerce, online education, online entertainment,

etc. Technology has changed our way of life,

including but not limited to food, education,

communication, transportation, entertainment, and

healthcare (Mentsiev et al., 2020).

2. New promising industries have emerged in

global value chains due to the high demand during a

pandemic of various services and their rapid

adaptation in the post-pandemic period.

3. The fallout from the pandemic and the trade war

has pushed the business environment towards more

productive systems and supply chains.

It should be noted that the domestic economy

experienced the deepest recession since the default.

The Russian oil market is currently experiencing the

largest drop in demand in all modern history,

affecting the world markets that are places for the

export of Russian goods. Another problem is social

distancing, both forced and voluntary. Thus, the

Russian market faced such challenges as the

deterioration of foreign trade relations and the

contraction of business activity along with

restrictions aimed at preventing the spread of

coronavirus infection.

4 CONCLUSION

Global restrictive measures, reduced business

activity, shocks in the markets and disruption of

global chains have had a strong impact on both the

domestic economy and the global one. However, a

number of directions have been identified in which

one needs to work to maintain it:

1. Within the framework of information assistance

of the state, it is necessary to diversify sales and

supply markets by establishing new international

cooperation ties.

2. Improving the quality of products in the context

of a pandemic as a tool to increase demand for

domestic goods, and, consequently, export them in

large quantities.

3. Development of platform solutions for

companies and business digitalization.

4. Formation and development of industries with

a short business cycle.

5. Optimization of the control system of

production stocks of parts and components.

6. Expanding sales markets for goods, including

export industries, by introducing new products to the

markets.

7. Increasing the saturation of the grocery basket.

8. Development of competitive and export-

oriented small and medium-sized businesses.

In Russian practice, it is necessary to develop

effective measures of post-image state policy to

restore the domestic economy, taking into account the

above directions.

In 2020, amid a pandemic, the world economy

contracted by 4.3%, which is 2.5 times more than

during the 2009 global financial crisis. The released

United Nations World Report says the moderate

recovery of 4.7% barely compensates for the previous

year's losses. The report also noted that recovery from

the pandemic should focus not only on stimulating

package volumes, but also on the quality and

effectiveness of measures to make the world economy

more resilient to future shocks. United Nations

Secretary-General António Guterres at the World

Economic Forum in Davos, held online due to global

restrictions, noted that “we are now experiencing the

worst crisis in the world health and economy in the

last 90 years. Despite the sorrow for those who left

this world, we must remember that the choices we

make today will determine our common future

tomorrow. Investments now need to be directed to

health and a sustainable future, where a person will

become the center of the entire socio-economic

paradigm of the modern world ".

The United Nations Department of Economic and

Social Affairs reported in its report that an additional

131 million people were below the poverty line amid

the pandemic, most of them women, children and the

most vulnerable. Women make up about 50% of the

labor force in volatile sectors of the economy, such as

the hotel and restaurant business, retail trade, which

have been hit hardest during the global restraint. The

Great Depression, according to United Nations

experts, was averted by $ 12.7 trillion, which was

directed to emergency measures to stimulate the

world economy. At the same time, they note that the

difference in the amount of economic assistance in

Inﬂuence of the Pandemic on the Socio-economic Situation in the World

325

developed and developing economies will put them

on different recovery paths.

It is worth noting that the 2020 crisis saw the

deepest recession in the economy since the default.

However, Christine Lagarde, Director of the

International Monetary Fund, noted that today's

economy is ready for a crisis and is able to cope with

it. Christine Lagarde believes that the main method of

combating coronavirus infection is to limit its spread,

and the large-scale development and level of

employment of the working-age population will help

to cope with the situation on the world stage.

The unprecedented crisis that has killed more than

two million people, which has doomed the world

community to poverty, income inequality, disrupted

international trade and paralyzed the global economy,

requires the world to take emergency recovery

measures, and tomorrow and the standard of living

depend on these measures future generations.

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