Despite the serious problems with the availability of COVID-19 vaccines, the vast majority of people in the United States and Europe will have been vaccinated by the summer, so the public health situation will be largely the same in these parts of the world. However, despite the homogenization of these areas, it remains uncertain how long it will take people and businesses to return to pre-pandemic conditions. Travel recovery, for example, will be slow. The European Union is likely to introduce quarantine-free cross-border crossings for those with vaccine passports, but restrictions on long-distance travel will remain in place for a long time to come.
Border controls between the vaccinated rich world and the unvaccinated poor world are likely to become stricter, especially if new mutations of the virus continue to appear. As a result, long-distance tourism will shrink, severely undermining some emerging economies. In addition, the globalized environment that has developed in recent decades will be adversely affected. This is because although personal contact is no longer required to ship a container, the same cannot be said of managing production networks or finding new customers. Thus, travel restrictions will ultimately reduce international trade and investment, and hence productivity and global growth.
A serious parameter that will concern us for a long time, is the mutations of the virus. Vaccines are currently doing an excellent job of treating mutations. But if this does not continue and eventually there is a mutation that is not treated by the existing vaccines, this will create a new wave of disruption. Mutations are the biggest risk that could shake the recovery of the world economy.
The size and manner of the effect of the pandemic are now difficult to estimate, as the relationship between public health and economic activity, in the context of the coronavirus pandemic, is constantly changing and therefore difficult to quantify. For example, today, we observe that societies and businesses, despite the high incidence of cases, seem after a year of a significant slowdown, willing to resume social and economic activity taking more easily the risk of losing human lives.
The fact is that we are now experiencing a new reality that creates new needs and rules. Masks will continue to be an integral accessory for people, businesses will continue to operate under the constraints of the new adaptation conditions. In this new environment, however, new opportunities are created. The transition to e-commerce is one of them. Online payment companies have grown significantly, and they are also helping businesses recover, even those most affected, such as restaurant businesses.
Markets in this new environment will not remain unaffected. If there is a mutation in the virus that cannot be treated with the existing vaccines, the upset that will occur will be painful. If this does not happen and vaccination continues, albeit with delays, then we will live a long period of redefining the economic, business, and social model. In this case, the continuous restructuring of investment and trading positions will be a process that will take a long time. This will result in the horizontal movement of the indices, but the volatility will remain high as individual products and stocks will develop a downward or upward trend due to the new conditions that have been created and will continue to be created.
The big bet in the near future will be the availability of the vaccine in every length and breadth of the earth where humans live. The longer the pandemic persists and affects humans, the greater the economic damage and the greater the risk of mutations that may not be treated with the existing vaccines.
Considering all the above, the innovation in new methods of dealing with the pandemic risks, but also the innovations in methods for people and businesses to benefit from the new situation that has been created and continues to be created will be the greatest of all challenges. So, once again, innovation in thinking and applying will be the most valuable key to the future prosperity of people and businesses.
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